Foreclosures on the Rise
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.
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