Home forclosures are escalating across the entire nation, forcing people out of their homes and into bankruptcy. Florida has taken one of the hardest hits in foreclosures, with more than 20,000 filings in 2007. California and Texas are close behind, with forclosures reaching well over 10,000 in each state.
Foreclosures in Arizona have risen over 40 percent since last year and Colorado reports 1 out of every 345 households has filed forclosure or on the brink of filing. Vermont, Maine and the District of Columbia seem to be the only states immune from forclosures. However, experts predict foreclosure rates will rise in these states when adjustable-rate mortgages start escalating.
While many would lead you to believe the trend of foreclosures is all about the collapse of the American economy, it really doesn't take a rocket scientist to figure out what has gone so horribly wrong.
The American Forclosures Saga is due to the vast amount of Americans who purchased homes they could not afford using no-money-down, interest-optional balloon payment loans. As adjustable rates increase, distressed homeowner's mortgage payments double or even triple. Those who were barely managing to make their $1,000 monthly mortgage are now facing a $2,000 or $3,000 mortgage. The reality is they simply do not have the financial means to pay their note.
Americans have always believed in the American Dream of home ownership. They scrimp and scrape in an attempt to obtain a tiny down payment. They get suckered into a sub-prime loan, invest in a home well beyond their means, and spend the next few years struggling to keep up with their payments. When all is said and done, they lose their home to foreclosure and their dream quickly turns into a nightmare.
Those in the know realize that banks and the stock market are simultaneously pricing everyone out of the housing market. They predict the United States is heading for economic catastrophe, as forclosures continue to escalate.
Forclosures have a devastating effect on the homeowner, lending institution and local community. American homeowners who are not facing foreclosure face higher property taxes, local taxes and increased fees for utilities, as communities attempt to recoup losses from the abundance of foreclosure properties.
Real estate experts report that each foreclosure costs lending institutions approximately $80,000, whereas preventing foreclosure costs less than $3,500. If this is the case, why are we seeing such a huge surge in forclosures?
The problem stems from the fact that many people facing foreclosure become paralyzed with fear. Instead of being proactive, they avoid contacting their lender and instead, wait for the axe to fall.
If you are facing foreclosure, there are steps you can take to stop the process. The first step is to contact your lender. If your lender is unwilling to work with you, the next step is to contact the U.S. Department of Housing and Urban Development. HUD offers free credit counseling through approved agencies and can help you negotiate with your lender.
Even if you are unable to save your home from foreclosure, it doesn't mean it is the end of the world. Although, it may feel that way at the time. Before you throw in the towel, take time to educate yourself about the forclosure process. There is an abundance of information available via the Internet that can guide you in the direction best suited for your situation.
Another option might be to sell your home to a real estate investor such as Simon Volkov. We specialize in helping people who are facing foreclosure. To learn more, fill out our secure Pre-Foreclosure Form.
Published on November 25, 2007 at 04:50 PM
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