Delinquent Homeowners Ending Up with Foreclosures Increase- By: Leticia Carvalho
The continuous increase in recorded late payment of mortgages and rate of loans of homes in foreclosures was evident during the third quarter. This has been projected to become worse with the escalating unemployment and even worsening economy. With the absence of programs that help struggling homeowners get some loan modifications, a number of this already existing housing problems may even be higher.
According to chief economist, Jay Brinkmann, past recession of this degree has never been experienced yet with this severe housing market crisis. An estimate of 2.2 million mortgages on homes will be welcoming the coming year with foreclosure process according to Mortgage Bankers Association. This in return, could initiate tidal effect on what could eventually overcome national efforts.
Hugely contributing to this escalating mortgage delinquency and even foreclosure rates is the up scaling job losses of many individuals. Unable to make income to cover their expenses, more so, building up credits and loans, struggling homeowners are left with no choice but to give up on their liabilities.
With the increasing rate in residential loans, delinquencies and foreclosures are more likely to build up in the coming months. Despite the many efforts to help troubled homeowners with their mortgages, such impact that may be beneficial might still take some time to take in effect. Even lenders have been very compromising with their borrowers as indicated by the hike in records during the previous quarter showing loans past due but still yet to be foreclosed.
However, this undesirable trend on foreclosures may still be solved but may require a lot more effort and even time. Policies, for example, may be implemented in order to promote job growth and restore financial institutions to be able to gain credibility. Stabilization of home prices may also be helpful so that buyers could invest on properties without having to doubt the loss they may end up upon loss of property value. Even the Treasury has considered offering a 30-year mortgage with a percent rate of 4.5 to aid homeowners through Fannie Mae and Freddie Mac.
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Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.