Mortgage during the financial crisis: an overview and trends

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Despite the fact that the history of mortgage lending by foreign banks has many decades, the global financial crisis has not bypassed, and this segment of the banking sector. The problem of the subprime mortgage crisis has swept literally leading the country in the world.

Global analysts argue that today the U.S. has depreciated nearly one in five mortgage loans. One in five U.S. mortgage borrowers, banks should amount to much more expensive homes on the market. In such a situation was more than 7 million Americans, representing 18 percent of the people of this country. Those same analysts paint a not too bright prospects, if the value of American real estate has dropped at least 5 percent, then it is fraught with the increasing number of these borrowers to 25%.

The probability of such a development is very large – experts say, and predict that next year prices could fall by 10 percent. The maximum depreciation of mortgage loans have experienced such states as California, Florida, Arizona, Nevada, Michigan and Georgia. Learn more about car insurance rates!

For example, today more than 400 000 customers of one of the leading mortgage banks JPMorgan Chase & Co could lose your home. In connection with this threat, the bank plans in the coming days to review the terms of loans to borrowers who have already been issued to reduce the number of cases of alienation of buildings for mortgage debts. The total amount of loans is no more nor less – than $ 70 billion.

Why does the U.S. stand on the threshold of mass non-return mortgages? Mainly because ceased to grow real estate prices. In the past, investors have poured money into buying a home, which after some time, re-sold. After payment of credit interest income they receive. Today the situation has changed.

European mortgage during the financial crisis is also more expensive. For example, the European Bank for refinancing rate – 4 percent, and rates of bank loans on mortgages increased by half a percentage point. European borrowers found themselves in very difficult circumstances, some even try to get rid of their property – according to experts of the European property market. For example, the earlier inhabitants of Spain’s banks are offering mortgages with low interest rates. Now the purchase of new housing loans in the Spanish did not even dream of. Although even in such a difficult time banks in Spain offer a mortgage loan in the amount of 50 to 70 percent of the value of a house under 5,7-6% per annum.

Crisis in the housing market and concerned residents of Great Britain. Only in England at the moment there are about 70 thousand people that need credit to pay a much larger sum than the cost of housing. And this ugly situation is only getting worse every month. In order to do something to help the owners of housing, the Bank of England may lower interest rates on loans.

Analysts say that over the past 60 years the world economy had not experienced such a strong financial crisis. And it will last, according to conservative estimates, more than one year.