Since the start of the housing crisis in the middle of 2007, housing nonprofits and real estate research firms have been focusing on counting foreclosed houses and on efforts to prevent foreclosures. Few have monitored where the former owners of hundreds of thousands of foreclosed homes have gone.
In 2008, more than 2.3 million housing units nationwide became foreclosed homes, based on data from RealtyTrac. In January this year, more than 270,000 houses received foreclosure filings and in February, another 290,631 foreclosed homes were added. These numbers represent nearly 3 million former owners of foreclosed homes. Where are they now?
According to Douglas Robinson, spokesperson for the nonprofit Neighborworks America, a national network of over 240 community development nonprofits, the former owners of these foreclosed homes can be divided roughly into two groups. Homeowners in the first group lost their homes when their monthly payments increased to unaffordable levels. after higher interest rates were applied on their adjustable-rate mortgages. Most often, these homeowners still have jobs and were able to move from their foreclosed homes to rental apartments.
Homeowners in the second group have had more difficult situations. Aside from being hit with increased monthly loan payments, most of these homeowners also lost their jobs. Since they do not have money to pay landlords, they go to homeless shelters or live temporarily with relatives and friends. Many have lived on cars, parks or on the streets as they could not find anywhere else to go.
The National Center on Family Homelessness reported that an estimated 1.5 million children became homeless between the years 2005 and 2006. Surely, the number has already risen, as more and more families are forced out of foreclosed homes.
Robinson said 6 million families are estimated to be forced out of foreclosed houses in the next 3 years. Where will they go?
Housing advocates applaud the Obama administration’s foreclosure prevention program. But they say the program might be too late for many homeowners. Besides, the program only helps homeowners who still have jobs to be able to afford monthly payments. The unemployment rate nationwide has increased to a staggering 8.1 percent, with many major cities having 12 to 14 percent of their population unemployed.
Dave Pesch, director of Housing Counseling Program in Erie, Pennsylvania, said he and his staff have helped about 35 percent of homeowners asking for help. But he is frustrated about the 65 percent that they are not able to help. He said many of these failed homeowners go back to crime-ridden neighborhoods which they previously were able to escape.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Learn how to invest in foreclosures at ForeclosureHomesInvesting.com.
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