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The Dual Side of the Foreclosure Crisis

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By : Dywon Erick Dylon    99 or more times read
Owing to the foreclosure crisis, the Real Estate bubble has enfeebled the US national economy. As a result of mortgage distress, homeowners are currently bound to face the inevitable foreclosure crisis. The conventional approach to mortgage refinancing of home loans has been described as one of the greatest financial debacle in US history. The driving force that precipitated this setback was the upsurge of home loan amount as opposed to the decline of home value.

Since home prices have dropped, the Real Estate market is now facing an unfavorable environment. The newly constituted Affordability and Stability Plan by President Obama is a Home Affordable Refinance Program exclusively designed for struggling homeowners wounded up in the disastrous foreclosure crisis. The program is an attempt by the US Government to rescue around nine million homeowners from facing foreclosure.

On the contrary, the Federal Officials are not on par with the decision taken by the Government to overcome the foreclosure crisis. These officials are of the opinion that the government should let the foreclosure as well as the Real Estate crisis to recover on its own. To validate this argument, the officials have come up with a plausible explanation. According to them, the foreclosure crisis, if left at its own pace to work its way through, will yield positive results to the housing market economy.

As foreclosure intensifies, the home prices shall decline, thereby giving rise to affordable homes and residential properties. Once the home value drops, the Real Estate market will gradually begin to witness normal housing prices. As a result, the existing Real Estate bubble prices that have taken its toll over the past decade shall wither away. So if foreclosure crisis is allowed to adjust on its own, it will mitigate the Real Estate bubble crisis and render the Real Estate market with home prices that are reasonable and affordable.

Major investors with their abundant capital at their disposal are extremely willing to purchase all those homes and residential properties that are open to foreclosure. The exorbitant interest rates on the mortgages are one reason why homeowners cannot afford to keep the homes for themselves. The investors are eager to buy those properties which the lenders themselves are unwilling to take over, owing to the foreclosure crisis.
Original post: on, your source of foreclosed homes.

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