Home Loan Modification Hurt by Higher Mortgage Rates

 For the first half of 2009, higher mortgage rates were not even considered.  The most frustrating thing about the current housing market is the fact that lower overall rates has not seemed to helped home prices at all.  For the first three months of the year, home prices continued to slide in almost every major city.  If home prices were sliding during these conditions, what is going to happen when rates start up trending?

Many home owners went through the process of getting a home loan modification for one of two reasons.  Either they wanted a lower rate to save money or they were doing everything in their power to save their house.  In the first situation, many Americans have been very smart with their financial decisions and they got a chance to refinance their homes are rates that are almost unheard of.  Some owners got rates as low as 4.5%.  The second situation is something that no one wants to go through.  When you know you cannot make your mortgage payment and there is nothing to do buy attempt a home loan modification, things have gotten bad.

Even with these two situations helping the lenders in the housing market, home prices are still lower.  This is very concerning to anyone who thinks the housing market is going to recover in the near term.  If extremely low rates didn't help the housing market, it will be very interesting to see what higher mortgage rates do.  The government has run out of bullets, so it seems like overall rates might be headed higher for awhile.