House prices are dropping lower than expected which is dampening hopes of a fast recovery which many experts used to say was a year but now extend to more than that. The Standard and Poor’s figures show that house prices have dropped 12.7% form figures only a year ago for 20 major metropolitan areas. This is alarming for this is the lowest and sharpest decline in two decades which is not a good sign at all for prices have yet to stabilize as they are still moving ever down. The areas that experienced the sharp increases in the first quarter are now the ones that are getting the hardest hit and they are still waiting for better news in the troubled and shaken real estate business.

The market may be getting worse day by day but data shows that the numbers of borrowers who are falling on their loan payments may be starting to show signs of leveling off. Figures for April show that there are more people who are able to catch up on their mortgages, maybe due to the fact that people are selling other assets to avoid losing their homes. Remittance reports are showing a slight increase which might be signs that people are indeed trying to pay up but the figure is not too significant to say that the trend is now leveling off and that people are finally catching up on their loans.

The Senate is one step closer into approving a directive for the provision of finances to fix the mortgage market which has crashed and led to the financial troubles plaguing America today. The effects were so devastating; some cities like Irvine (the Sub-Prime Lending Capital of America) lost a total of 2% to unemployment when sub-prime lending firms went bankrupt. The problem spread so fast people didn’t have time to react. Most people there are still dumbfounded about the matter and more than 4,000 jobs in the said area of business were suddenly sent to unemployment lines. The package would include measures that gives judges the authority to cut interest rates in order to cap problems preventing them \from spinning out of control as they did late last year.

The company is one of the many sub-prime lenders who went bankrupt when the sub-prime mortgage market bubble burst sending the economy down. Subject of a lawsuit, the company has been found to have not taken enough measures to assure the accuracy of its financial records. They are accused of following non-standardized accounting practices which led to false data reaching Wall Street giving the market a false sense of security. The independent auditor which New Century employed to handle its books also failed to detect the abnormalities in the financial reports sending it certified to be accurate to Wall Street. The company and it’s executives are facing prosecution for violating many accounting laws and may have to answer for more financial problems.

The Federal Reserve Bank bears the brunt of the financial obligations in efforts to prevent the company from going bankrupt. The Fed has released about $29 billion dollars directly infusing it into the mortgage industry in efforts to stem the crisis from getting any worse. The move was to provide enough money for JP Morgan and Bear that would otherwise send them into bankruptcy further taking the economy into assured recession. The current problems plaguing the market have Wall Street traders shaking as they see signs of a total economic crash. The effects of America’s problems has circled the globes affecting markets in the UK and Asia while stock markets are holding their breaths as they try to anticipate any more fluctuations in the global economy.

Homeowners might be the next group to receive bailout packages from the Federal Reserve Bank to halt the current trend of people loosing their homes due to their inability to pay their mortgages. Sub-prime lenders have been found to be at fault for they issued and issued mortgages to people who didn’t even have the financial stability to get a mortgage. They offered so much to so many people that when they needed the cash they couldn’t get it. People lost their homes due to foreclosures and are ending up on the streets. The call for reforms to financial services market from the president is well founded for the Federal Reserve cannot keep on issuing bailouts to everybody. The country is stretched on an insufficient budget and deficits are growing.

The Democratic Party has strongly opposes the bailout packages being offered might have no choice but to go with the flow. The deliberation in the senate on the matter which would allow the control of interest rates to cap off future problems might all end up a failure for everyday a solution is not found the economy gets worse. Jobs are steadily falling and many are going home without jobs to get back to. Insurance is also experiencing a drain of financial resources for the huge quantities of claims has them shelling out a lot of funds to cover these policies. The problem was seen by a lone banker way back last year but no one listened and they continued to say the economy was doing well with the right proportions of all factors.

House sales are still low but it shows some improvement, not according to analysts who say there are still too many new homes with not enough buyers. In areas where there used to be high home sales are suffering due to the pullout of insurance companies from their area due to the high losses they had during Katrina and the many other natural disasters. In Florida, two of the largest insurance companies pulled out opting not to renew and issue new policies. These companies are under investigation for covertly cancelling policies causing a stagnant market in areas such as South Palm Beach. The state has opened homeowner assistance centers to aid residents with their mortgages even giving $10,000 to those behind their bad loans just to keep them in their houses and out of welfare