More than 20% Are Underwater

An industry report shows that more than 20% of American homeowners owe more on their mortgage than they are able to sell it for.

The majority of this underwater status was found in California and Las Vegas, where the housing market was sky rocketing only a few years ago. According to the report; in Las Vegas 67.2% of homeowners would have to bring cash to the table if they sold their homes. Other markets are Stockton, Calif., where 51.1% of homes are underwater, and Modesto, Calif., where 50.8% of homes are in that position.

Rates Offer Relief

Homeowners can take a little load off as mortgage rates continue to stay low. According to Freddie Mac, "Half of the borrowers who refinanced loans in the first quarter this year lowered their annual mortgage interest rate by at least 20%"

An economist from Freddie Mac reported that after refinancing, homeowners saved $160 per month on a $200,000 loan as a result of lower mortgage rates.

Obama Welcomes New Lending

President Obama expressed his approval of new lending this week as homeowners visited the White House, he said the government's efforts to drive down interest rates had fueled a surge in refinancing -- putting money into many homeowners' pockets during the current economic crisis.

The one draw back to the new surge in refinances is that most all the refinancing so far involves borrowers with conventional mortgages who are not in serious financial trouble. The president's own programs for helping troubled homeowners are just beginning to get off the ground.

Obama at his meeting also warned against the mortgage refinancing scams that abound.

Mortgage Rates at 52 Year Low

Home mortgage rates dropped to a 52 year low as fixed mortgages rates dipped to 5.19%, which is the lowest rate since 1956. The 15 year fixed mortgage rates fell to 4.86%. These drops have caused a surge of interest in refinancing.

Mortgage Fraud Reports up 26 Percent

The mortgage fraud increase comes as lenders go on the defensive as the housing crisis deepens, they have dramatically tighten their standards making it nearly impossible for borrowers to qualify for home loans, with out placing a very large down payment and proof of excellent credit and income.

As a result of these stringent standards more than 60% of the mortgage fraud cases stemmed from falsified applications, 28% came from tax returns or financial statements, and the rest come from appraisals. People are becoming more desperate and doing whatever they can to get what they need.

Mortgage Rates Fall A Bit

Freddie Mac released the results of their primary mortgage market survey. The survey shows that a 30 year fixed rate mortgage averaged 5.03%. It's down from last weeks average of 5.15%, and down much further from last year 6.15%.

Housing Construction at 17 Year Low

The depleting housing market has taken a toll on many sectors, this includes, not suprisingly the construction of new homes and apartments. The levels of construction have decreased drastically over the last few years, and have now reached a 17 year low in August.

This 6.2 percent decrease in housing construction was reported Wednesday by the Commerce Department. This is the slowest rate since 1991, which was another tough period for housing.