MORTGAGE, PLUS HOME EQUITY LOAN EQUALS:

05.29.08

...a value amount that may exceed a home's current appraisable value.

This could be a real problem for owners of some properties around our area. Hopefully there are not many owners in this predicament around here, but it is proving to be quite a problem elsewhere in the country, and it is causing problems far beyond the real estate industry, as equity credit lines are suspended, and even canceled for many who have been relying on them to pay other expenses.

One industry experiencing fallout over this problem is the auto industry. Sales are down because the credit sources have "dried" up, or credit scores for customers are way down; repossessions are going up as the ability to "fund" a car loan or lease, through a home-equity loan is no longer an option.

As auto sales go down, sales of components to the car industry drop, and well, you can guess the rest.

Of course it started with the real estate industry, mainly in the speculative home building business, rampant everywhere but around our area. When those sales plummeted, construction stopped, and component purchases stopped as well.

There is always a silver lining, but it mostly benefits those who are financially "fit". Many others will suffer, probably for some time to come.

It was a pleasure to see such a wonderful turnout for our local towns' Memorial Day parades. And what a perfect weekend it was for everything that went on this last weekend. Can a better real estate market be far behind? I, and many of my colleagues are ready for a "new" boom, but that may be elusive for a while.

©2008, R. Leech features.