It is believed that Spain’s prime minister is going to present new measures soon to aid banks in that country, which has been a consistent concern regarding whether or not Europe’s fourth-largest economy is going to require a financial bailout. The real estate bust in 2008 has resulted in tremendous numbers of bad loans from Spain’s rising unemployed population, now at over 24%, who need the promise of low mortgage rates to even consider making payments to offset the $230 billion (US currency) in “problematic” holdings. For the past four years, economic and real estate troubles in Europe have been a primary force in reducing mortgage rates in the US.
The real estate collapse has hit Bankia SA, Spain’s fourth-largest bank, particularly hard in 2008, with nearly $40 billion in so-called toxic assets, according to El Pais newspaper and Associated Press. Thus far, the Spanish government has forced banks to strengthen finances by combining together, providing allowances for contingencies to cover the assets that are dragging the country into further financial ruin. The government has been doing all it can to manage the crisis itself without using public funds, but the explicit goal of the Spanish prime minister is now simply to make it through to the other side of the calamity, regardless of how that is accomplished. The problems in Spain, Greece, and now possibly France, following the election of new Socialist president François Hollande, whose election is expected to drop confidence in the turn-around potential of the Eurozone with investors outside the region; all have been significant forces in driving down the now-record low mortgage rates in the US. However, if these tactics prove successful, then more investors may be drawn back to the area. If this does prove to be the case, though, it will be a long time before many of these effects are felt back in the States.
In essence, the problems of Spain this year are what Greece’s problems were last year with regards to low mortgage rates. Following the elections in Greece and France, “austerity is the new dirty word,” according to the Associated Press. This suggests that these financial and real estate issues are going to continue for the foreseeable future, as the willy-nilly spending across Europe keeps potential investors at bay, and those investors are going to prove vital to the future success of these struggling countries.
It is no mystery that global markets today impact one another in fundamental ways. In the US, that means low mortgage rates while Europe tries to find its new political future in the face of extreme challenges. LowerMyRates.com, a website specializing in lowering rates for clients in areas ranging from getting a low cost merchant account to auto insurance rates, it confident that the low mortgage rates are going to continue into the foreseeable future.
“We knew this was going to be a long, hard road,” said one LowerMyRates.com employee, “but low mortgage rates are something that are going to be around for a while.”
For more information on low mortgage rates and other consumer financial services aimed at lowering your bills please visit
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