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Trust us. Would we lie to you?

Written By Brian Hicks

Posted December 10, 2007

Bridge for Sale: Only used once by an older lady for grocery food shopping and dry cleaning…

124 years young, this spacious, four-lane bridge with walking lane, is perfect for family car trips through New York. Take advantage of the bridge’s aerial view of New York’s East River as you drive, or walk, along the 1,595-foot bridge For more information, call “Homebuyers of Uber Housing,” or “HUH” today…

Before we get into what Countrywide or the NAR had to say, let me say this.

Housing will not improve until 2010, the earliest. A trillion dollars worth of ARMs will reset between October 2007 and 2008, resulting in crippling delinquencies and foreclosures. If you want to watch value disappear, buy a home in today’s market. And never, ever, ever believe a word from Countrywide, Mozilo or the NAR.

And if you believe what the National Association of Realtors or Countrywide is trying to force feed, I’ve got a bridge to sell you.

The National Association of Realtors… Wrong Again.

The NAR would have us believe existing home sales will trend up in 2008 because pending home sales showed a slight rise. But pending home sales mean nothing. They refer to the number of contracts that have been signed. They don’t account for the number of contracts that fall through because people can’t get financing together.

NAR chief economist Lawrence Yun would have us believe that the “worst part of the credit crunch has already worked its way through the data” and “The unusual mortgage disruptions that peaked in August were clearly seen in lower home sales that were finalized in September and October, so the market was underperforming. Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels.”

Fortunately, “Numerous other economists, however, are far less optimistic than the trade group. They predict weak sales and falling prices through next year and beyond and emphasize that those problems could worsen if the economy sinks into a recession.

Patrick Newport, an economist at Global Insight, forecasts that home sales will drop from 5.66 million this year to 4.7 million in 2008 — 1 million fewer home sales than the real estate group’s forecast. ‘With the economy and job growth slowing…it is hard to believe that we have hit bottom,’ Newport said in a note to clients Monday. ‘Our view is that prices need to drop further, and that housing activity will hit bottom about the middle of 2008.’

Joel Naroff, chief economist for Commerce Bank, said the U.S. is 12 to 18 months away from a ‘normal housing market’ in which sales are growing and prices are rising or stable. Furthermore, he said the trade group’s 0.2 percent revision to its sales forecast should be taken with a grain of salt, given the difficulty of projecting with any certainty.”

Countrywide Financial… Trust us. Would we lie to you?

Here’s what Countrywide has to say about housing.

“FACT: Now may be a great time to shop.

Most people buy a home when the time is right for them. And, now may be a great time to shop given the available home inventory and buyer bargaining power. Whether you’re looking for a newly built home or a re-sell — deals abound. Just as important as getting the best deal on your new home is choosing the right home financing solution to close the transaction.

FACT: Most buyers still have a number of mortgage options available to them.

While access to money for funding home loans has been reduced over the last few months, and some loan options have gone away, most home buyers are still able to qualify for a wide array of choices. Those buyers can leverage the current home buyer’s market to get a good deal and then choose a mortgage they can comfortably manage.

If you’re a first time buyer looking to move up into a larger home or even a buyer with a credit score that is not perfect, explore your options. The fact is there are still financing options available. For starters, jumbo loans (loans greater than $417,000) are still available. Additionally, low down payment options remain available, meaning buyers don’t necessarily need 20 percent down. Those with credit scores that are not perfect may well find that FHA and VA loans can be good alternatives.

FACT: Owning a home offers advantages v. renting.

Aside from pride of homeownership, the fact is there are many financial advantages to owning a home over renting. Homeowners with fixed-rate loans have the same mortgage payment for the entire life of their loan and avoid the periodic rent increases experienced by many renters. Homeowners may also experience income tax advantages that are not available to renters. The interest paid on a mortgage can be up to 100 percent tax deductible. After assessing the impact of potential tax deductions, some people may find that homeownership is ultimately less expensive than renting. Prospective homeowners should consult with a tax specialist for more details.

Also unlike renting, which offers no return on the monthly outlay, mortgage payments for many types of home loans pay down a portion of the principal balance of the loan each month. In doing so, the homeowner can build equity in the home, which may eventually be borrowed against for other expenses like home improvements or college educations, if desired.”