We are all anxiously awaiting a housing recovery so that home values and sales will increase and this turnaround will, hopefully, help pull us out of the current recession. The government is offering an $8,000 incentive to new homebuyers (and those who have not owned a home for three years) and, yet, people are still unsure if they want to take the risk. Everyone knows someone who has been through a foreclosure on their home, and no one else wants to go through this heartbreak and major financial setback. The Real Estate Industry and a number of homebuilders and developers are offering a solution to those people who are hesitating to commit to a home for fear of losing their jobs.

One major national real estate chain has developed a job loss protection plan for buyers. The seller of the home purchases the protection for a flat fee of $500 and includes it with the sale of their property. If the buyers lose their jobs within the first two years after they purchase the home, the plan will pay up to $1,800 per month for six months towards their mortgage payments. So many people are living in fear of losing their jobs that this extra insurance may be the extra incentive necessary to help them decide to purchase their new home.

A local builder is offering a similar program but his pays up to $1,500 per month and it is included in the price of the home.

I am certain that many real estate offices and builders will begin offering plans of this type to potential buyers in the hope of removing the stress and worry of job loss while instilling confidence in them to move ahead with the purchase of homes being offered at very competitive prices with low interest rates.

Some homes are vacant because families could not afford to pay the mortgage and should never have qualified for it in the first place. Others are a result of job loss, while still others defaulted due to marriage problems, which left only one person with a low income in the home.

In many cases, squatters are moving into vacant properties and signs are attracting vandals and thieves. Homes are being destroyed and many items are stolen for profit.

Some neighborhoods are fighting back. Residents are actually taking turns cleaning up specific properties in an attempt to keep their area looking good. It is upsetting to them to see their locality falling apart because the large mortgage companies who hold title to these properties are not acting responsibly. New laws are being introduced and attempts to increase enforcement are being worked on. But as of today, the neighbors are still working together as a team to maintain the beauty of their neighborhoods and the value of their homes. They are all hoping that these new laws will help alleviate the negative impact these homes are having on their community.

Many homeowners are very upset over the falling home prices we have been experiencing for the past two years. The home is the largest asset most people have and watching the value slipping down regularly is making them nervous.

When you have money invested in the stock market, there are ways to adjust your portfolio to the current pace of the market. You can maintain a diversified portfolio to balance risk, continue saving money, and invest wisely after thorough investigations.

To begin with, do not let the current value of your home upset you unnecessarily. Despite headlines, most homeowners still have reasonable gains even after the recent declines. Homes were artificially inflated for quite some time and they have now settled into prices more in tune with their actual value. Chances are very good that the housing market will continue with some ups and downs, but the end result should leave most homeowners with reasonable gains in the value of their property.

Today we are living with a buyer’s market and we just have to mentally adjust to the current home values. Homes take some time to sell and many are sold in response to offers from potential buyers. Do not become discouraged as it may cause marriage problems if you and your spouse are always upset. As long as you do not have to sell your home quickly, you will most likely profit on the sale. If, however, you are pressured to sell as soon as possible, then a loss should be expected.

Remember that the housing market works both ways. If you sell your home at a lower value, you will also be able to replace it with a purchase that will be a very good deal. Shop around and make sound decisions and everything most likely will work out very well.

It seemed ridiculous when we first read about them and apparently they were. I am referring to the undocumented loans that were being offered by banks and mortgage companies a few years ago. These were loans with no income verification. The mortgage industry named them “liar loans” since they required no proof of income or existing assets. Some of these people were not even employed when these loans were approved. Obviously, the people granting and approving these loans were motivated solely by their own greed.

Just as we believed the housing market was possibly starting to improve, many of the “liar loans” are defaulting in record numbers. Most of these mortgaged properties are located in states where home prices have decreased the most, such as California, Nevada, Arizona and Florida. The homeowners with these loans are unable to refinance because they paid record prices at purchase and the homes have since sharply devalued. This leaves only foreclosure as an option.

Many of the lenders who provided “liar loans” are now defunct and others may soon be following. Brokers who provided borrowers with this type of loan earned greatly inflated commissions, as the loans themselves carried substantially higher fees and interest rates. A broker who might earn between $2,000 and $4,000 on a normal mortgage loan was earning close to $15,000 on a “liar loan”. Unfortunately, we, the taxpayers, are picking up the cost and dealing with the problems generated by this unseemly business practice.

The housing market has been in trouble for some time. However, recently, the number of foreclosures has been increasing rapidly and may be causing confusion as to the current availability of homes for sale.

The combination of lower home values, decreased volume of sales, less credit availability, and a slowing economy is placing financially strapped homeowners in a very difficult bind. Some have no other choice then to let their homes go to foreclosure.

Since many foreclosed homes are in the hands of the banks at this time, frequently they are not recorded as “homes for sale” on real estate listings such as MLS (Multiple Listing Service). Foreclosed homes also often sell for less money and, therefore, they will lower the prices of homes in the area.

The possible result of this information is that the housing market may be in more trouble than originally believed. The hope has been for sometime that the market has bottomed-out, but this may not be completely true. If many foreclosure sales are not included in the current calculations, we may have even more trouble ahead before this market can return to normal.

Meanwhile, our government is introducing a program, Housing and Economic Recovery Act of 2008, which will allow homeowners who qualify to cancel their old home loans and refinance with 30-year fixed-rate loans for up to 90 percent of the home’s current value. This may help many struggling families but can only apply to foreclosed properties if the bank agrees to take a loss on an existing loan in exchange for avoiding the high expense of processing a foreclosure.

If you are purchasing your first home, the government is providing assistance. This help from our government also applies to anyone purchasing a home who has not owned a house during the past 3 years. If someone was renting or living with family during this three year period, this new tax credit will be available to them, too.

The new credit being made available extends only to purchasers who buy a home between April 9, 2008 and June 30, 2009. This is our government’s attempt to create activity in the housing market while helping numerous people become homeowners. Any home purchase will qualify whether the home is new, old, or in need of repair.

If you are able to close on the purchase of a home during this specific time period, you will be eligible for a credit of 10% of the purchase price, up to a maximum of $7,500 ($3,750 if you are a single person) against your federal tax liability for 2008 or 2009. This is what is referred to by the government as a “refundable” tax credit. “Refundable” refers to the fact that if you owe the government a specific amount in taxes and it is less than the “refund” you have qualified for, you will receive the difference in cash from the IRS. This would be a great source of funds for getting settled into your new home and providing a few of the new home purchases that everyone needs.

Unlike many others, this tax credit contains a clause stating that beneficiaries must repay the money to the government. Beginning in the second year of homeownership, taxpayers are expected to begin making regular payments to the government when filing their federal tax returns. The payback period may be extended up to 15 years as long as regularly scheduled payments are being made.

As with any law passed by our government, there are many exceptions, qualified clauses, etc. so be certain to consult a financial adviser or your accountant regarding your specific qualifications for this new tax credit.