The Way Out of the Housing Crises

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Federal Open Market Committee, lowered its target for the federal funds rate, which regulates overnight loans between banks, to 3.5 percent, from 4.25 percent

Federal Open Market Committee, lowered its target for the federal funds rate, which regulates overnight loans between banks, to 3.5 percent, from 4.25 percent

This extraordinary move hasnt happened since 1984...almost a generation has passed. This should help the markets which are beginning to panic and seriously sell off, further adding to negate psychology. These things can be self fulfilling and so the Fed stepped in with a huge rate reduction and before the meeting, no doubt tied to the MLK holiday sell off in Europe and Asia, quite drastic for such a conservative organization.

My opinion is that only the banks and lenders can really save the day. We have 450 Billion in ARM's due to reset between now and 2011. Since many of these loans will increase monthly costs by 30-50% just as the value of this asset declines, Im sure we will find too many homes, a drag on prices and recovery, as they dump onto the market.

If the lenders insist on being paid, they will force this on all of us. Some lenders are beginning to renegotiate loans and others are attempting to allow people to stay in their homes by accepting some of the debt as a lien on the property, hopefully to be repaid during better times.

This is the way out of the problem that doesnt rely on bail outs or hand outs that will never come. Let the lenders join us in the pain and help us wait it out. We can settle up when this crisis has passed.

Thanks for Reading
Howard Bell
www.yourpropertypath.com