My Financial Healthcheck

Homebuilder’s were given a big fat Holiday present from Washington when Congress passed a piece of legislation in November that allowed these companies the right to apply losses incurred in 2008 and 2009 to income earned in any five years through 2007.  Previously, losses could be counted against profits over just two previous years.  In other words you and I just paid for this tax break, so much for all the rhetoric about no pork (since bill was put into the legislation expanding unemployment benefits), and lobbyists not being allowed to influence lawmakers, all campaign hype and Washington acting the same as it ever has.  New home construction remains slow as builders keep an eye on a growing foreclosure pipeline.  The year 2009 ended will rates jumping up from a low of 4.75%ish for a 30 year fixed in November to back in the low 5%’s.  Refinancing plunged at the end of December by over 30%. The reasons for this are the chance for inflation and the Federal Reserve stopping their purchase of mortgage –backed securities.  Most are predicting that rates will head up towards 6% mid 2010.  A record 3 million households were hit with a foreclosure notice in 2009, 21% higher than in 2008 and more than double 2007’s total.  The dramatic increases occurred despite President’s Obama’s Home Affordable Modification Program promise to reduce foreclosure filings.  July was the peak month with more than 361,00 homes receiving a notice.  Some 680,000 borrowers had received temporary workouts, a far cry from the 3 million Obama preached when the program was announced in early 2009.  Nevada had the highest rate of foreclosures at 10%, California had the most filings at 632,573.