The number of bank homes for sale continued to clog the housing market pipeline, pulling down home prices and values. In the third quarter of this year, foreclosure filings increased by 5 percent from the second quarter and 23 percent from the third quarter in 2008. The figures indicated that 937,840 houses were in some sort of foreclosure proceedings.
And looking at the numbers, it could not be denied that loan modification is not working as intended despite being touted as one of the most effective housing market recovery program of the Obama Administration.
Industry experts said that based on the progress made by the loan modification program in helping control the flow of bank homes for sale that is clogging the housing market pipeline, the program is not enough to help homeowners save their properties, especially those who are buried in debt and have little or no income to afford the monthly mortgage payments.
Experts said that the Obama Administration's loan modification is designed to help distressed homeowners extricate themselves from the trouble caused by loose lending standards.
During the peak of the housing market, many homeowners took out loans against the increasing values of their houses and used the money to pay for other expenses. Others borrowed using loans that are adjustable and have no down payment to purchase properties that they could not afford otherwise.
Later, many homeowners found themselves missing monthly payments, especially when their loans adjusted to higher interest rates. Industry experts said that many homeowners opted to sell their properties. However, they found themselves willing to sell but unable to because home prices and values dropped below the market level.
And adding to the growing number of homeowners who are at risk of foreclosures due to loose lending standards are homeowners who have lost their jobs or their income have been cut.
A recent market study showed that 30 percent of delinquent borrowers will find some means to make their accounts current without help from lenders. Finally, despite loan modifications, as many as 45 percent of troubled homeowners will still end up unable to pay their mortgages again, usually within six months, and find their properties on bank homes for sale.
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