March 4, 2009
March 4, 2009 by admin
The stock market is trying to regroup following a streak of losses that have seen over a 20% decline in 2009. The market is desperate for some good news, today ADP reported that the private sector lost nearly 700,000 jobs in the month of February. The market is bracing for Fridays report on non farm payrolls which could is likely to show another staggering loss of jobs in the United States. The stock market has now moved into a twelve year low as investors are agressively pulling money out of equity positions and moving into government bonds or cash positions. The government today released futher details on the planned loan modification program that is projected to help up to nine million home owners who could be facing foreclosure during 2009. Lenders are scrambling for solutions to try slow the rate of home foreclosures as an estimated one in five households in the United States value is lower than the outstanding balance on the mortgage. The housing market will continue to create challenges for the economy until there is a solution in place to help homeowners stay in their homes and have their mortgages restructured to lower the principal balance of their mortgage to a level equal to their homes new value.
The housing market has not seen much of a lift following despite historically low interest rates. The larger challenge facing consumers is that lenders are requiring higher loan fees to offset credit and loan to value guidelines from agency lenders (Fannie Mae & Freddie Mac). These changes are extending the breakeven period on refinances and causing consumers to delay moving forward with locking into lower mortgage rates.