Home foreclosures have increased in America drastically

Posted on October 3rd, 2007 by saman

Foreclosures are done when a borrower defaults on the mortgage due to various reasons. This enables the lender to claim or sell the property to recover his money. Home foreclosures have increased in America drastically. To avoid foreclosures, people should discuss the contract details with their lenders and should plan as how are they going to repay the loan, before taking one. There are thousand of people who have either lost or on the verge of loosing their property due to continuous rise in the rates of subprime mortgage. ARMs or Adjustable Rate Mortgages have also failed to provide the homeowners with low payments rates. A rise in their rates can cause foreclosures. Foreclosures due to ARMs rising rates, have crossed all the past records this year. Considering the situation alarming, there is an urgent need to reconsider the mortgage guidelines and there shall be same rules for small lenders as well as for large mortgage agencies including Bank of America. The concerned experts are trying to locate the problem areas and find a way to fix them accordingly to help the homeowners from loosing their property. They are finding out its effect on the victim and on the national economy as well. The rising number of delay in mortgage returns or inability to return on subprime home mortgage is causing worries to the national economy, which as itself is going through a slow pace. The raise in foreclosures have shaken everybody’s confidence, lender’s, borrower’s as well as the investor’s. Mortgage lenders need to counsel the homeowners the ways and means to avoid the situation to come. The role of the mortgage lenders has become important than before. Homeowners are required to take appropriate action as soon as they get the foreclosure notice. Don’t neglect the notice or delay your action, you might fall in trouble later. Though every state has counseling cells for homeowners to prevent foreclosures, but only a few of these actually provide assistance regarding mortgage programs, that can be a big help for the owners who are losing their property due to sudden crisis, like loss of job, or a sudden loss in business, or death or illness or any other such reason. The foreclosure preventive measures that the policy makers may consider, include- a) grant of federal funds in the states which are facing the maximum number of foreclosures, b) Federal agencies should assess regularly, as how effective are the foreclosure preventive programs are in present context.

As per HUD (Housing and Urban Development) guidelines, homeowners may opt for a pre foreclosure sale in case they are two months overdue in their mortgage payments. Pre foreclosure allows them to sell their property within 3 to 5 months, having the lender’s confirmation regarding the value of the property as per the HUD guidelines.

At times foreclosures become unavoidable, but it is moral duty of our economy and government to help those who have owned homes and want to secure their property from foreclosure. Owning a home is the ultimate dream of everyone and loosing it can be very painful.