Meeting someone half way is the essence of a compromise, but it appears that since the collapse of the housing market and financial industry back in 2008, an all-or-nothing approach has been the norm. While banks were bailed out, many homeowners who had bit off more than they could chew with an adjustable rate mortgage (ARM) were left by the wayside and, worse, ended up unemployed. Although standards for applying for a loan were changed and refinancing an existing mortgage was possible, what about those who are stuck with a mortgage on a home that, because of the crash, was devalued?

A professor at MIT proposed a solution, according to the International Business Times, that, essentially, harks back to a basic compromise and commonsense. Professor William Wheaton at MIT proposed a solution to getting rid of underwater mortgages. His approach to reconstructing consists of converting debt to equity, according to the IBT article. As many homeowners are paying a higher loan than their home is worth, Wheaton’s plan specifies that their loan would be reduced to the current market value of the property. As we saw in the case of Las Vegas, this underwater mortgage may be half of the original value.

But this plan isn’t designed only the benefit the homeowner, as the IBT mentions. Rather, the lender isn’t stuck with only a portion of the original loan’s amount. Instead, lenders will get half of the equity of the original loan and, as housing prices recover over time and because of inflation, the lender gradually recovers the original amount.

Although the lender receives this amount gradually over time, Wheaton’s solution, it appears, would reduce the amount of foreclosures and defaulted mortgages. Once the homeowner has a reasonable amount to pay, he or she has a significant burden lifted off, and the lender receives the full amount of the original loan when the market recovers with the pace of inflation.

Commercial real estate is always on the fence. One week, you hear that the market is about it experience its own real estate bubble. The next, you hear about how its affordability is going to help the economy by creating more jobs. The fact is, the market appears to be in a state of uncertainty and, considering the unemployment rate has been hovering around 10 percent for the last year, commercial real estate could go in any direction.

According to an article in the Dallas News, the author states that the present looks like the end for commercial real estate. Why now? The author goes on to reason that commercial properties have jumped 17 percent this quarter – a significant difference compared to a year ago – but the market in general is still 30-percent lower than in 2007.

But, could this be foreshadowing of a crash? It could be. The author mentions that the last time commercial real estate experienced a price increase was 2005 – when real estate was experiencing a housing bubble. Nevertheless, the increase for commercial real estate needs to be the result of a demand by investors and more properties need to be put on the market.

Another factor that the author mentions in indicating a crash is the high rate of delinquent payments. We’ve mentioned this before on our blog but, much like residential real estate in 2007, the first indication of a crisis was falling behind on payments for those unable to meet the amount of an adjustable rate mortgage.

The disparity between now and 2005, as the author explains, is a sharp difference in price; as a result, it appears, owners are reluctant to put their properties on the market, until distinct increases are seen. After all, why sell your property for a loss?

Could Google be taking over the world – or at least the internet? Probably not. As those following the rise and expansion of the world’s most popular search engine, Google acquired YouTube and has added additional features over the years. According to a recent story in Forbes, they’re now planning to expand into real estate. Does this mean that Google’s creating an online real estate search directory?

Far from it. As the story from Forbes explains, Google is simply investing part of its money into real estate. More specifically, they’re giving $86 million to fund 480 low-income housing units in various parts of the Midwest and West Coast. Towns ranging from Chicago to Salinas will be receiving new housing from Google’s investment.

The money by Google will be going to the Low Income Housing Tax Credit, as the Forbes article explains. This tax credit gives builders and develops tax credit for creating low-income and senior housing solutions. Google, on the other hand, is contributing a large amount of money to the project, but the project itself is being managed by U.S. Bancorp Community Development Corporation.

The Forbes article speculates that Google simply needed to do something with the large amount — $30 billion – of money that it had stashed away. Rather than doing nothing with it, Google, apparently, has considered investing in commercial paper and in real estate. While the commercial paper venture appears uncertain at the moment, the investment in real estate is simply Google doing something positive with their money.

Google’s intentions in real estate remain uncertain now. Is this venture simply something positive to do with the money, or are they looking to improve the existing housing market? The author of the Forbes piece seems to think that the creation of new low-income housing might make a slight dent in the real estate market and economy – new, affordable housing instead of condos and new jobs – but only what Google decides to do in the future will be any indication.

Anyone who has turned on a news channel over the past few months has seen that the proposed mosque or Islamic community center not far from the Ground Zero site is generating a significant amount of controversy. But, beyond whether to build the mosque in the area or somewhere farther from Ground Zero is only one issue. According to an article published in the Associated Press recently, the real estate behind the mosque site is experiencing a small amount of financial trouble.

According to the AP article, the building costs $100 million to create, and the companies behind it still have not finishing buying all of the property. Additionally, one company is behind nearly a quarter million in real estate taxes and late fees. The current purchasing company, Soho Properties, is behind this amount in taxes, and, although the company owns $200 million of real estate around Manhattan, some of their properties, older apartment buildings in particular, have had building code violations in the past. Compounding to this is a dispute over the city-assessed value of the proposed building.

Whether or not the quarter million in back taxes will be paid on the property after the dispute is settled remains to be seen. Another issue outside of backing and liberal-versus-conservative disputes is the financial backing for the project. In the present, no organizations or fundraisers have come forward with a plan to contribute to the $100 million for the project. Additionally, the amount for the new building could change after the dispute.

As controversy has surrounded this project since the beginning, no fundraisers or organizations may help with assisting the project. As some want the site gone, other want it moved, and even more defend the freedom of religion stated in the First Amendment, financial difficulties are only part of the issues facing this proposed piece of real estate.

The Wall Street Journal reported recently that rates on 30-year fixed mortgages have once again hit a new low. According to their article, the new rate for this mortgages is 4.32% this week – down from 4.36 percent last week and 5.08 percent a year ago. Of course, this drop isn’t significant; rates have been hovering around this area for 11 weeks, and this week was just another smaller drop.

Other mortgage rates are in the same state. According to the figures in the WSJ article, a 15-year fixed mortgage now has a rate of 3.83 percent. ARMs, or adjustable rate mortgages, also seem to stay in the same area. A standard ARM is 3.5 percent, while a hybrid ARM is 3.54 percent. All rates mentioned in the WSJ article are from Freddie Mac.

These figures, however, don’t represent the entire state of the market. From the perspective of the realtor, the market needs some serious assistance: prices are down 30 percent from the middle of the decade, while few new properties are actually being sold. Pending home sales, additionally, are also in a state of flux. According to this article from Business Insider, 90 percent of properties being sold are existing – few newer ones are being sold – but the market seems to be steadying.

The fact is, the real estate market will never recoup the 2004 to 2006 levels in such a short period of time. While prices on homes significantly increased during the first half of this decade, many purchasing such homes were also given ARMs and were unaware of the rate increases over time. Such a swift increase can only result in significant ramifications; in this case, the less-than-decent practices from agents and homeowners unable to pay quickly-rising ARMs both surfaced by 2007.