This year, home prices are targeted to experience their first yearly gain since 2006. That performance could accelerate the real estate rebound, even in this challenging economy.
It’s been a tumultuous and brutal seven years or so. Those who never thought they’d consider bankruptcy, face foreclosure or learn about short sales may have experienced one, two or all three. “Loan modification” entered our collective vocabulary.
As home values leveled off and dropped dramatically, some owners faced mortgages they couldn’t or wouldn’t pay.
Some looked at their numbers strategically and bailed on homes with severely underwater mortgages. Others faced heartbreaking home losses they didn’t want.
But understanding the mortgage crisis, and how to move forward, can get you back in the real estate game.
In the early 2000s, the dream of homeownership was attainable for many, as mortgage interest rates were low and payments were reasonable. With home prices escalating, real estate seemed to be a great investment.
For homeowners, increasing equity strengthened their financial portfolio and may have led to refinancing for an influx of cash. The cash-out refinance assisted with debt, expenses and purchases that provided an enhanced lifestyle.
Banks marketed easier access to loans. Some borrowers entered into higher-risk loans that let them state their income without verification or that had adjustable interest rates.
Unfortunately, home prices abruptly stopped increasing, and the mortgage crisis began.
But many who experienced this crisis now may be on the road to recovery.