By James McKee
Due to economic upheaval and the expiration of a government tax credit the price of homes has fallen to epic lows recently. While this is great news for investors looking to purchase real estate while the price is right ultimately it is a sign that banks are experiencing a tremendous deal of pressure. This pressure has resulted in an increased (almost desperate) desire to sell property as quickly as possible. While home prices are falling most Americans do not find them selves in a position to purchase property at the moment due to economic difficulty.
In an effort to bait potential homeowners into a purchasing mindset banks have lowered prices on foreclosed properties. Whether this tactic will prove fruitful or not is anyone’s guess, but I would guess that in light of all the mortgage controversy lately your average potential homeowner will keep their distance. Loans that were “robo-signed”, and countless other calamities are at the front of many people’s minds right now and they are anything but interested in participating in such a flawed system. When you have judges coming out of retirement to handle civil litigation that is mortgage-specific you know there is a problem.
A home is a very significant investment for so many reasons, and the fact that banks have erred so severely where people’s entire livelihoods are concerned is flat-out unforgivable. Bearing this in mind it is no surprise that people extremely hesitant to enter into a contract with a bank at the moment. If this strategy does not prove successful it could spell out serious trouble for not only banks in America but the USD as well. Falling home prices are a sign of desperation on the part of the banks and if this strategy does not yield gains confidence in the banks is sure to fall further.
The single largest cause for the United States current economic debacle is the faulty home loans that were pushed on to consumers. This has lead to a complete lack of trust and confidence in the banks on behalf of the public. If consumer confidence in banks and lending institutions continues to erode so will the value of the US Dollar.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.