Ongoing Threat of Yet More Foreclosures
July 1, 2009 by Admin
Filed under Stop Foreclosure Now, Stop Foreclsoure General
In 2006, the housing boom in the US began to cool down and increasing foreclosure news has dominated the media ever since. Homeowners began to lose their homes or are threatened with foreclosures because they have failed to keep up with the payments on their mortgage.
In cities where subprime mortgages are prevalent, foreclosure of homes also became widespread. MS Foreclosures are just one example. Unfortunately this has led to a decrease in home values as well which just adds fuel to the fire. Add to that the fact that local government spending has also been cut way back because this decrease in home values has also resulted in a decrease in property taxes and their annual budgets.
There were signs of this coming however, three of them in fact. The first sign was the massive bailout of home owners that came. The secondary sign involved previous borrowers with expired introductory interest rates resulting to keeping up with a higher rate and the third one, which is currently beginning to build up, are the people holding prime mortgages and who have lost their jobs due to the economic meltdown and are now unable to pay on their mortgages. Most of them even have good credit ratings. It is expected that unemployment would contribute to almost 60 percent of mortgage defaults. Unfortunately, this means that even more foreclosure news will be heard through the rest of this year.
The New York Times stated in February of 2009 that there are more than 1.5 million prime mortgages alone with delinquent payments (data by First American Core Logic). In that same month, the delinquencies on the even worse off subprime mortgages were as high as 1.65 million. In all, a total of $717 billion worth of loans were recorded in February – this is an increase of 60 percent from last year. These foreclosures spelled catastrophe for Wall Street due to the mortgage bonds that they are securitizing. These also lead to bank loses of hundreds of billions. (Note: Search on ‘forecloser‘ as well because it is a very common miss-spelling of foreclosure and is prevalent in the foreclosure news posts.)
The Obama administration announced in February that they will be spending $75 billion to save as much as four million homeowners from foreclosures through mortgage incentives and reduced payments. The effects of this plan are expected to be felt in the next coming months. Until that time comes, you will need to brace for the storm and all of the foreclosure news that is still looming out there.
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