Maybe it’s rejoicing time again for the home-loan borrowers.   Rates of interest for 30-year mortgages have fallen to around 4.75%, indicating that rates are indeed falling. According to the Mortgage Bankers Association (MBA), home lending could reach $2.78 trillion for 2009, which would be the fourth highest on record. The MBA prediction already is an upward revision from its earlier forecast by more than $800 billion. The nice thing is there are lots of places to look for things like home loan advice.

The upwards adjustment reflected the recent announcement by the Federal Reserve on its purchase programs for Treasury bonds and mortgaged-backed securities, and on the Fed’s Fannie Mae and Freddie Mac refinance programs. The Federal Reserve’s move dovetails the unveiling early this year of the Homeowner Affordability and Stability Plan by President Barack Obama. Three components comprise the Obama program. First is authorization of $75 billion as subsidy for the restructuring of troubled home loans. Focus on loan restructuring is the second, under which a framework for clear and consistent guidelines shall be developed. An overhaul of US bankruptcy laws is the third, seeking to empower judges to force lenders to cut mortgage rates and allow bankrupt homeowners to write down mortgage principals. If you're having trouble with a home loan just search "home foreclosure" on google and you can find a lot of information.

Mortgage foreclosure is a sensitive issue for anybody sitting in Washington. First of all, foreclosure of home loans consumes much real resources such as legal fees for lawyers and bailiffs, fees of surveyors, and the time spent in the proceedings . Cost for all parties of each foreclosure has been estimated to be between $50,000 and $80,000. Another is the emotional cost as foreclosures are akin to dispossessing homeowners and family evictions. Subconsciously, foreclosures are also associated with the homeless. Another thing people should really look into is short sale.

On a positive note, the government  encourages home lending and thus homeownership because the homeowners are more likely to improve their property and their community than tenants. This is also one of the primary reasons in the bailout measures on troubled mortgages by President Obama as implemented by the Fed recently. Another government incentive for homeownership is to allow taxpayers to claim mortgage interest deductions from their taxable income.

Another stimulus for lenders to disburse home loans to borrowers are the government subsidies to the lending and guarantees of Freddie Mac, Fannie Mae, Ginnie Mae and other similar government agencies. Further reflecting the stimulus to home lending is the recent funding increase in the Fed’s programs for treasury bonds and mortgage-backed securities. Homeownership is likewise fostered by the postponement of capital gains tax which is allowed on all home sale.

All these incentives notwithstanding, other factors have to fall in place for more appreciable gains in home lending and homeownership. Industry observers say that stability in employment have to be seen before there is a real increase in overall home sales. What the current situation is likely to lead to is that much of the funding increase would only go to the refinancing of home loans amounting to $1.96 trillion, leaving purchases at $821 billion. Consequently, home sales are actually expected to decline by 2.5 percent to 4.8 million units, says the MBA.