Market Crash vs Family Wealth
BofA sees additional 15% drop in real estate prices
As Inventories across Central Florida sit at all time HIGHs. Bank of America (BofA) expects home prices will fall an additional 15 percent nationwide and 20 percent.
BofA has been under fire for their decision to acquire troubled mortgage lender Countrywide Financial Corp., said that loan losses at Countrywide are on the high end of Bank of America's projections in January, when the deal was announced.
But the all-stock deal -- valued at $2.5 billion when it closed July 1 -- will be profitable from the get-go, says BofA, with huge potential for growth when housing markets recover.
Although Bank of America had initially considered using Countrywide's widely recognized brand name, it will phase it out early next year - No more Countrywide.
Bank of America plans to lay off 7,500 employees as part of the merger, and engage in workouts or loan modifications with 265,000 borrowers.
A workout is a negotiation with a borrower to avoid a foreclosure or short sale.
Bank of America also inherits lawsuits against Countrywide filed by attorneys general in Illinois, California and Florida.
Policy center reports home-price impacts on wealth
According to a study by the group, The Center for Economic and Policy Research:
"The impact of the Housing Crash on Family Wealth."
The Center for Economic and Policy Research, a nonpartisan think tank, reports that if home prices hold steady through 2009 -- the median household headed by those 45-54 next year will have 24.7 percent less wealth than the median household group in this age range five years earlier.
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The study also found that if real house prices drop 10 percent, the median household headed by those 45-54 will experience a 34.6 percent loss in wealth compared with the median for this group in 2004, while households in the 18-34 range will lose 67.6 percent.
If prices fall 20 percent, families in the 55-64 segment will experience a wealth loss of 49.6 percent compared to the same segment in 2004.
Do the math.
Since the market will continue to adjust downward, there has never been a better time to sell.
The Lee Rosa Team Home Seller Guide