At the end of each year, some people look back -- while others look to the future. The past, as the saying goes, is prologue; other than to learn from our mistakes, there is nothing we can do to change or modify 2006.

So let's look forward. How will 2007 impact on the American homebuyer?

Interest rates: Last December, we all predicted that mortgage interest rates would be at least 7 percent by the end of the year. We were wrong. However, I am confident that interest rates will rise as we move into the new year. The state of our economy is still fuzzy, which in my opinion means that rates will start moving upward in the months to come.

Purchase and sales contracts: If you read the newspapers, you will learn that real estate sales are down, especially for condominium units. Developers who are now faced with many unsold units are offering everything from free plasma television sets to free car rentals for a couple of years to induce buyers to submit contracts. However, there are anomolies, especially here in the Washington metropolitan area. I recently learned that a cooperative apartment generated five contract offers. That may be unusual in todays marketplace, but is not uncommon.

More importantly, a whole bunch of new Congresspeople are coming to Washington, and that will clearly generate a good number of sales. We all know that when Congressmen or women lose an election, they often stick around to become lobbyists. Thus the new people -- and their new staff -- will be looking for good places to live, and that's good news for this area.

Foreclosures: Unfortunately, too many Americans did not listen to former Fed chairman Alan Greenspan when he warned consumers not to obtain no-money down, interest-free mortgage loans. According to the Mortgage Bankers Association, about 4.7 percent of homeowners were late on their mortgage payments in July through September of 2006. This was up slightly from 4.4 percent in the same period for 2005.

If you have a old adjustable rate mortgage that will “adjust” in 2006 (or even in 2007) you should seriously consider refinancing while rates are still hovering around 6 percent. Furthermore, you should carefully read your “interest-free” loan papers. You will learn that it contains a variable rate, which can adjust on a daily or monthly basis. It also may turn into a fixed- rate loan within the next year or two -- and the rate will be based on the then-current mortgage rate. Be warned and take early action before it is too late.

Predatory lending: Everyone talks about this problem but little -- if any real action -- has taken place. Low income consumers are vulnerable to the tactics of some mortgage lenders, especially since they often are unable to get loans from legitimate commercial companies. Recently, for example, the Montgomery County Council passed a law which would have gone a long way toward assisting consumers, but the Circuit Court in that jurisdiction ruled that the Council exceeded its authority and that the law was unconstitutional and unenforceable. (American Financial Services Association et al v Montgomery County Maryland, decided November, 2006).

The Judge held that only the Maryland legislature was able to enact such a law. So, when will that body tackle a problem which prevails throughout the State -- from Baltimore City all the way through Princes Georges and Montgomery Counties?

And when will the District of Columbia and the State of Virginia address predatory lending? While hopes are high, expectations are low. Consumers do not have the same legislative muscle that mortgage lenders have.

RESPA violations: The Real Estate Settlement Procedures Act (known as RESPA) prohibits kickback between service providers, including mortgage lenders, title companies and even attorneys. In recent months, it appears that there is a growing trend toward enforcing this law. Consumers pay good money to purchase their houses, but kickbacks only add to these costs. Prospective homebuyers should not just go to a lender or a title recommended by their real estate agent without first engaging in comparative shopping. Often, selecting your own lender or title company will save you money.

New home sales contracts: If you decide to buy a new-built house, the developer will present you with a form contract. In the past few years, when sales were strong, it was “take it or leave it.” Unfortunately, too many of these contracts are one-sided in favor of the seller. Now that the market has cooled down, you should carefully read the contract, and consult your legal and financial advisors before you purchase. Developers clearly want to sell, which means that their form contracts can now -- and should -- be negotiated so that you get the best terms possible.

For example, many such contract do not have a fixed time as to when settlement will take place. In recent years, many potential homebuyers have been faced with extraordinary delays, because the developer was unable to complete the deliver the house on a timely basis.

This can become a real problem, especially when interest rates may be on the rise. You may have thought you could get a low 6 percent loan, but by the time the house is ready for settlement, interest rates may be much higher -- and obviously even if you can afford the new loan, it certainly will put a crimp in your financial picture.

So insist on a specific time for delivery with a penalty in case the developer cannot produce on a timely basis.

Finally, I repeat my long standing plea: lenders, please consolidate your loan documents. Homebuyers should not have to sign multiple truth in lending statements, affidavits of residency, and a host of other documents. In the good old days, we only had to sign three papers -- the settlement statement (called a HUD-1), the promissory note and the deed of trust (the mortgage).

Although I only want to look forward, in the case of the loan documents, the past is our better course.