When looking at how the housing market performed in 2007, total home sales fell to an all-time low last year, with some areas of the state’s housing market faring better than others.

This disaster was triggered by a chain reaction of other events, with real estate investors deep in cash but not enough common sense to forecast the future, and mortgage brokers and other lending agencies or companies all too eager to Give more money to potential home buyers. than they have the ability to give back.

The crisis also intensified in large part because many homebuyers were too eager to borrow and didn’t care to read the fine print, which spelled out the terms of their mortgage. Florida and a handful of other states were unlucky enough to find themselves at the center of this housing storm. In October, the Florida Association of Realtors monthly sales report reported that year-over-year home sales numbers fell about 29%, even though home prices were only down about 8 %.

Expectations of the mortgage policy for this year

Many mortgage lenders in the state, and in other markets as well, thought their risks were only limited due to rising home values. These lending firms thought it was okay if a homeowner didn’t put up any money because if he lost his home to foreclosure, the banks could recoup their investments and possibly earn more if the home’s value went up.

However, the mortgage lender’s risks shot up further when home prices began to fall, even on mortgages that were issued under the old rules. It was said that during the heyday of the seller’s market, home lending was out of control, hence the increased number of foreclosures we see today. For this year, the prospects on the mortgage front are still mixed, and these are the forecasts for 2008:

– Homeowners are not the only ones facing bankruptcy, as there is also a list of lenders that are also in deep trouble. Once established lenders like Countrywide and Washington Mutual are also significantly cutting their mortgage exposures. The H&R Block lending firms withdrew; and Citigroup also noted numerous problems.

With that scenario looming, institutions and regulators may have to toughen lending standards:. In August, most industry insiders were shocked when the subprime crash peaked, so most lenders raised their credit standards, resulting in mortgages getting tougher. to get. However, industry watchers say creditworthy borrowers should see brighter prospects this year.

– Since subprime mortgages are so hard to take advantage of these days, the US federal government is also planning to expand mortgage programs under the FHA, and many pending related bills are on the discussion block and make their way in the halls of Congress.

Housing industry analysts are hopeful that 2008 can bring generous inventory for buyers to choose from and that demand is there; however, many of these buyers fear that prices will drop a bit more, so they would prefer to wait before making any decisions.

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