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Stop Blaming, Help Owners of Foreclosed Homes

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By : John Cutts    99 or more times read
As more than 100 houses in the Chicago area become foreclosed homes everyday, analysts and state officials have been blaming various groups for continued Illinois foreclosures. But they are not alone, across the country, various sectors have been blaming each other for the millions of foreclosed homes that have battered the housing market and the national economy.

The rapid rate of Illinois foreclosures has continued to put the state high on RealtyTrac’s ranking of states with the highest foreclosure rates in February 2009. With a foreclosure rate of one housing unit in 369 units, Illinois continues to be among the top ten states in rankings of foreclosed homes.

In previous years, foreclosed homes can only be found in lower-income communities and inner-city neighborhoods. Nowadays, the claws of foreclosure have reached middle class and wealthy subdivisions and suburbs. The pain and shame of foreclosed homes have hit young couples, families with young children, middle age couples and first-time homebuyers who were all chasing the American Dream.

Many analysts have blamed mortgage brokers for enticing low-income borrowers with highly risky adjustable mortgage loans just to get their sales commissions. Some blame speculators who took on more mortgage loans that they can bear to buy housing units that quickly turned into foreclosed homes. Others blame the mortgage banks for not implementing standard screening procedures just to accumulate loans that they can package into high-earning mortgage securities. Finally, many others blame the borrowers themselves for allowing themselves to be fooled to take out loans they can not afford on their current income.

Analysts said President Obama’s multi-billion-dollar program to reduce the number of foreclosed homes has given hope to distressed homeowners. The reality however is that many mortgage lenders and servicers are not yet prepared to work out loan modifications. They have not started training their staff on how to deal with borrowers applying for participation in Obama’s program.

Moreover, most mortgage lenders have decided to turn over defaulting properties to foreclosure lawyers. They have calculated that writing the loans off, taking advantage of PMI insurance policies and accepting low prices of foreclosed homes are better than hiring more employees to work out modifications with troubled homeowners.

As a response to Americans’ call for help in solving the foreclosure crisis, mortgage lenders, critics and government officials are enjoined to support Obama’s program to help Americans save their homes.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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