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Houston Foreclosed Homes Selling for Less than Mortgages Owed

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By : John Smith    99 or more times read
Houston, Texas, like many other areas around the country, is going through financial difficulties due to bad mortgages. Based on a report by First American CoreLogic Inc., over twelve percent of homes in Houston owe more in mortgages than what the homes are currently worth. More than 115,000 homes in the area of Houston were going through tough times.

Jack and Donna Johnson, say that they still owe $60,000 on their home on Porter Ridge Dr which they bought in 2004 for $80,000; however, the house is now worth only $55,000. Recently unemployed, Jack claims he has already missed two mortgage payments and fears they will go into foreclosure very soon.

The government has recently created the Home Affordability Modification Program, also known as HAMP, to avoid the dangers of a mortgage going underwater as it can lead to defaulting and later on to foreclosure. The HAMPís goal is to modify home loans which amount to more than what the property is worth. If all the banks begin helping everyone prevent foreclosures then people wonít lose their properties. They will keep their credit in check and keep on spending money. If foreclosures keep on going at the same rate as they have been in the last three years, we will simply be faced with more economic woes.

This program cannot be considered a success just yet. Their latest release indicated that the total number of permanent homes that have been saved stands at 116,000, but nearly a million are presently in the process. They hope to help more millions of homes in the next couple of years, especially in areas such as Houston where 6.1 percent, or roughly 57,000 homes, were in negative equity at the end of the 4th quarter last year. Negative equity is the term used when the borrower holds less than five percent equity in his or her home.

For real estate investors and first time home buyers interested in purchasing Houston foreclosed homes, this means that there still are good opportunities out there. We suggest checking with an online foreclosure listings site in order to obtain up to date information of where and how to find good real estate investment deals in Houston.
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