Stock market traders have always eagerly waited for the monthly unemployment report for indications on the direction of the economy, interest rates, and business prospects. The real estate industry has never quite had the urgency of those traders; until now. Sure, unemployment numbers affect mortgage rates as the market adjusts interest to current news and expectations but it’s not like the people in the industry would wake up early to see the report as it was announced.
That’s starting to change now as the prices of residential real estate, the mortgages behind it, and the fortunes of the homeowners paying those mortgages appear now to be totally dependent on what happens in the in the job market. According to the statistics released in the recent OCC and OTS “Mortgage Metrics Summary for First Quarter 2009”, the biggest percentage gains in delinquencies and foreclosures are migrating away from the risky subprime loans that got the mortgage meltdown rolling to the biggest category of the mortgage sector; prime mortgage loans. Those loans, traditionally the venue of choice for borrowers with solid credit and employment prospects are defaulting at a faster rate than the subprimes as unemployment and a contracting economy subtract jobs, available works hours, and income from homeowners.
Of the seven recessions in the U.S since 1960, the housing sector has led the economy back toward recovery every time. Industry watchers, seeing the deterioration in the real estate market continue to accelerate, are now assuming that the economy will have to lead the housing sector, at lease toward some sort of stability, if not a full blown recovery. Hence, the newly found importance of the unemployment report.
If market watchers got up early today to see if there are any signs of recovery in the June unemployment report, they probably went right back to bed after seeing it. The U.S Bureau of Labor Statistics dropped a bomb on any hopes for signs of a bounce in the economy when they reported “that non-farm payrolls lost 467,000 jobs, which beats estimates varying from 367,000 to 400,000, as the unemployment rate rose to 9.5%. The dip was substantially larger than May’s 322,000 loss, boosting the number of those out of work to 14.7 million Americans.”
The other problem noted in the report was that the people that stayed at their jobs worked fewer hours, on average, in June than they did in May. This is exactly the opposite of what should be happening at the start of a rebound where employers push remaining employees to work longer hours as production starts to increase.
Without an economic recovery on the horizon with current stimulus packages in place, it appears that more priming of the pump is going to be a necessity. In recent commentary, administration officials said they were willing to take a wait and see attitude before adding any additional stimulus to the economy but it’s becoming apparent that a recovery isn’t going to start anytime soon, of its own accord.
What that means for struggling homeowners is that defensive measures, including home loan modifications, should be taken sooner rather than later. As the saying goes, “It’s always easier to find a job when you already have one”, so it goes with getting approval for a home loan modification. If you are currently having difficulties making your mortgage payments, getting a loan modification approved is going to be much easier if you are currently employed.
As lenders are being swamped with applications, getting your current mortgage modified as quickly as possible has to be a priority. To accomplish that you’ll need an experienced law firm that knows how to navigate the process as efficiently as possible. The Feldman Law Center has executed over 600 loan modifications. By knowing how each lender processes home loan modifications they can get you through the obstacle course to an approval. Call Feldman Law Center today at (800) 527 8497.