Foreclosures to Double soon

Posted on March 17th, 2008 by saman

The majority of the housing markets in the United States are in a serious crisis. The market is being plagued by the massive number of foreclosures, a number that will most likely worsen during the next few years.

It is predicted that foreclosures will double and top about five million through the year 2011. This number is based on an analysis of two hundred and fifty one markets.

Adjustable rate mortgages and subprime loans were they catalyst that artificially inflated the housing markets in a number of states. This can be combined with the problem of mortgage fraud.

The crisis is so troublesome that about two million homeowners have been forced out of their homes already and even more people are fearful that they will lose their home to foreclosure.

An economic stimulus package that was approved by Congress contained provisions for increased lending limits insured by the government. However, it is believe that this will not do very much to slow the foreclosure epidemic and this will affect on out of every ten home owners. The package does not address the real needs of the property owners who are at risk of losing their residences to foreclosure.

Though the Federal Reserve has cut interest rates in order to help the poor U.S. economy, this does not appear to be providing a long term answer to the current foreclosure crisis.

Over two million home owners will be facing an interest rate adjustment in the coming months. They are faced with an uncertain future when it comes to their homes. A lot of individuals will be faced with the possibility of being unable to refinance their homes. This will result in a loss of housing values. The value of real estate has dropped by fifty percent in some areas of the country.

Real estate is a large part of the economy of the United States and is the biggest financial asset for most home owners. If immediate action is not initiated by the White House and Congress, the current foreclosure crisis will easily become the worst financial disaster in the history of this country.

Congress needs to take quick action in order to stop the tidal wave of foreclosures and keep the economy of the nation from descending into an economic depression. If Congress does not take some major action, analysts believe that the housing problem will have a sixty percent chance of becoming a major depression with a higher number of foreclosures than we are currently seeing.Since the 1930s, the United States has not had a real estate deflation like the Japanese meltdown that occurred between 1992 and 2006. A number of experts in real estate are beginning to wonder whether or not we may have begun down the same path.

It is not news to anyone that America experienced an enormous boom in real estate markets at one point. However, every boom eventually turns into a bust. When there is a crisis in America citizens depend on the government to take action. If lawmakers of the United States will do this is the question and there will be serious consequences for the national economy.