Foreclosure Crisis: Foreclosure Affecting People With Good and Bad Credit
There was a myth in the minds of Americans that foreclosure is victimizing people with bad credit. The reality is that people with poor as well as sound credit rating are falling prey to the foreclosure crisis that has brought about a catastrophe in the entire nation. By the end of second quarter, a large number of people entered foreclosure. A large part of population is today facing a tough time in making the mortgage payments that seem to be ever increasing.
The situation is pitiable nationwide with nearly 5.12% mortgage loans overdue for payment. The homeowners are going through a difficult financial crunch and are unable to pay back their loan amount. There are a couple of people who are not willing to make the payment due to the decline in the value of their home. Nearly 0.65% loan seekers are in a deplorable condition and the hope of recovering the money from them appears to be next to impossible. The foreclosure proceedings have been initiated in respect of such houses.
Douglas Duncan, the economist of the Mortgage Bankers Association has brought forth certain facts. The slow moving housing market has witnessed 3 record breaking quarters of foreclosure filings. He is of the say that the last quarter of the year 2007 will see the worst things happening all over the nation. Foreclosure is like a slow poison that is victimizing the entire nation. In fact, it is believed that the situation is not likely to see any improvement till the third quarter of the year 2008.
Duncan says that the cut in the interest rates of the Federal Reserve can help in improvising the situation. However if the rate of unemployment rises it will lead to a recession in the housing market. If such kind of a situation takes place, more and more people will lose their houses. Illinois is on the topmost position in the list of foreclosure activities with 5.09% loan seekers under pressure to vacate their homes.
The problem is much more intense in the Midwest industrial states such as Ohio and Michigan that are badly hit by the layoffs and retrenchments. Same is the case in Florida, California, Nevada and Arizona. These are some of the places where the housing market is witnessing a major downfall. It is expected that the financial market is likely to be unstable in the times to come due to the lack of credit in the lending market.