Foreclosures on the Rise
Foreclosure news continues to dominate national headlines as the unemployement rate keeps climbing. Reports say that almost 6% of homeowners are either in the rears on payments or at the cusp of foreclosure. This number has doubled as compared to just a year ago. According to the Mortgage Bankers Association, it is very alarming to see that the rate of troubled homeowners have doubled in the past year.
In April, 342,000 properties in the US were foreclosed. Of these, 96,500 of them were in California alone. Data is cited from RealtyTrac – a web-based company. Senior citizens are also greatly affected with a reported more than 600,000 of them are delinquent on mortgage payments or have already foreclosed properties. AARP reports that older Americans, the ones that have subprime first mortgages, are 17 times more likely to have their homes foreclosed than Americans, of the same age, having prime loans.
The community is dramatically impacted by subprime loans and their much increased rate of foreclosure. This was illustrated in a recent study showing that areas which had large numbers of subprime loans also had increased numbers of foreclosure filings as well. The foreclosure news seems to dominate the airways and subprime loans account for nearly 50 percent of those cases.
Other factors affecting foreclosures in a localized area were also studied. They considered home value, race and income but arrived at a conclusion that subprime lending is the major factor for foreclosures. Not surprisingly, one factor that did repeatedly impact the rate of foreclosure was unemployment. Many people simply do not have enough income to keep ahead on their mortgage payments. That’s why MS Foreclosures and other areas as well are skyrocketing. Because of this, the Federal Reserve Bank of Boston recommended that unemployed homeowners should be given more focus by policies that aim to fight foreclosures.
The sad truth is that there will still be many more Americans that will be affected by foreclosure in the coming months. (Note: When doing your research online make sure to search for ‘forecloser‘ as well as it is a very common miss-spelling.) The government is trying to assist with various policies and legislation, but it is unclear on what impact it will have. The biggest drawback of such policy changes, is that they take many months to be approved and applied. Until these plans have proven to be effective, we may have to brace ourselves for more foreclosure news to come in the future.
