Nationwide headlines are continued to be dominated by foreclosure news and the increasing rate of unemployment.  Reports say that almost 6% of homeowners are either in the rears on payments or at the cusp of foreclosure.  In comparison to a year ago, this number has doubled.  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.  California posted 96,500 of the total foreclosures of the country.  This data is according to a web-based company, RealtyTrac.  Reportedly more than 600,000 senior citizens are also either delinquent or have already been foreclosed on.  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.  A study showed that in areas where subprime loans are prevalent, the number of foreclosure filings is also high.  The foreclosure news seems to dominate the airways and subprime loans account for nearly 50 percent of those cases.

Researchers tried to study other factors which could affect the number of foreclosures in an area.  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.  People don’t have enough income to keep up with their mortgage.  That’s why MS Foreclosure and other areas as well are skyrocketing.  This fact has lead agencies such as the Federal Reserve Bank of Boston to take up the cause of unemployed homeowners and recommend for more lenient policies in their behalf.

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.  Many Americans simply do not have that long to wait.

There are simple techniques to help stop foreclosure on your home. If people knew how and took action earlier, there would be fewer homes lost in this way. You can help stop foreclosure processes before they even get started.

Four Steps to Stop Foreclosure

1. Lenders might try to convince you that you’ve got to pay in full or risk house foreclosure. In truth, there are a number of options that provide home owners with a way to keep their house without having to pay what they own in one lump sum. The sooner people act on them, the more options they have available to help stop foreclosure.

2. Make not missing a mortgage payment your top priority. Keep the following in mind:

• Once people miss a payment, the second, third, fourth, fifth time becomes a lot easier – from a psychological viewpoint.

• The moment a home owner skips a payment on his home, his credit is negatively impacted at once. This can result in him not being able to get a loan to save his home, or it can drastically reduce the amount of loans he’ll be allowed.

• Skipping a single mortgage payment is more dangerous than failing to pay credit card or utility bills. If at all possible, you must stop spending on anything you don’t absolutely need, in order to prevent the loss of your home.

3. It’s crucial that you not delay in getting back to your lender if they attempt to call or write to you. Keep in mind that banks don’t want to be home owners, they just want to get paid. Working with them rather than hiding from them will help stop foreclosure that much sooner.

4. Don’t miss Chapter 13 bankruptcy filing deadlines. Filing by the due date is a good way to help stop foreclosure from ever occurring. Plans to repay creditors that get court approval and debtors that make all the payments stipulated in the plans ensure that foreclosure doesn’t restart.

It’s hard to top timely mortgage payments as the way to prevent foreclosure. But when you absolutely can’t avoid being late, inform lenders beforehand so they can take action to help stop foreclosure ASAP. Hiding your head in the sand isn’t the way to avoid foreclosure, but taking action is.

The big US housing boom really started to dwindle in 2006 and increasing foreclosure news has dominated the media ever since.  Many of today’s homeowner’s (maybe as much as 10% of them) simply cannot keep up with their payments.

Many of the foreclosed homes are tied to neighborhoods where subprime martgages were 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 second sign was all of the sub-prime loans and adjustable rate mortgages beginning to implode.  Lastly, the third sign has been the fact that even prime rate loan holders are losing their homes now due to job loss and the economic crisis.  Most of them even have good credit ratings.  Unemployment is now forecast to impact about 60 percent of all of the mortgage defaults.  Unfortunately, this means that even more foreclosure news will be heard through the rest of this year.

According to an analysis made by New York Times in February 2009 (data provided by First American Core Logic), the number of prime mortgages that have delinquent payments exceeded 1.5 million with loans totaling to $224 billion.  On the same month, delinquencies on subprime mortgages reached 1.65 million while the Alt-A loans rose to 836,000.  Shockingly over $717 billion in bad loans were on the books for February – up over 60 percent from the same time period a year ago.  All of these foreclosures have also dramatically impacted Wall Street and mortgage bonds.  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 then, we should brace ourselves for more foreclosure news that is looming in the neighborhood.