Members of the real estate industry recently received mixed news. First, the number of underwater mortgages in the US are going down. This is good news for homeowners that want to get loans based on the amount of equity that they have in their property. When a mortgage is underwater, essentially the homeowner is paying an inflated amount for a house that has lowered in value. This can have an especially negative impact on those that have invested in home improvements.
Although the change is slight, any improvement in the property market is a good sign. However, the news was offset by a report that indicates that foreclosures have begun to pickup. For over a year, several major mortgage companies have been working with homeowners that are unable to make their payments. Bank of America even stopped foreclosure proceedings voluntarily in a number of states. This trend has come to an end, and banks have a record number of foreclosure and REO property on the books.
Foreclosed properties may be good for investors, but they can reek havoc on the US economy. Because the federal government has backed a good number of the properties that are soon to be foreclosed on, the federal deficit may go up substantially. For what its worth, real estate experts still believe that the market will soon bottom out. When home shoppers see that home values have hit their lowest level, they may begin to buy, however, banks are also looking to tighten their lending criteria once again.
