3-26-08

Speaking about the economy in general today it was not long before Paulson mentioned the current credit crunch and the housing market, stating that home prices according to the Case-Shiller index are expected to decease another 13% in 2008. Paulson makes a good point and states that we do not have a national housing market – that it is regional. Which is very accurate since some areas are hit harder and others just stagnate. He goes on to state that the American economy is very resilient and while there is a lot going on in the housing market and other sectors this correction is needed to bring the economy back on its feet.

He goes on to state that the Bush administration's FHAsecure plan has helped 130,000 homeowners and is expected to help another 300,000 this yet – he does acknowledge that more can be done and urged Congress to pass the FHA modernization bill when it returns from recess next week. It is estimated that modernizing the FHA could help an additional 250,000 homeowners and is essential this legislation get past the Congress swiftly.

Paulson goes further to explain that the hardest hit are those homeowners in subprime ARMs. This group more then any other has the highest foreclosure rates – about 40% of subprime ARMs are in some state of foreclosure. He went on to further state that private sector and government aid should be part of the solution and further urged that the FHA reform bill be passed by Congress.

Also as a reminder he stated that if you currently have negative equity in your home that you should still keep making your payments and that this correction is temporary and home prices will once again be on the rise. Further stating that they are looking into FHA options to help with these negam homeowners as well.

Discuss this News