Foreclosures Leading to Financial Limbo
June 30th, 2009
Foreclosures are leading Americans into a state of financial limbo. They are lagging behind in mortgage payments but strangely the dreaded foreclosure notice has not come as yet.The pile up of serious delinquency cases has now touched 1 million. It is a shadow hovering over all hopes of recovery. It hides and masks the intensity of the housing crisis. There is the latent threat that housing prices will be further depressed just at a hopeful point of time when some pockets in the country are beginning to recover. For lenders it spells greater danger and possibility of losses.
Patrick Newport of IHS Global Insight commented, “It just means foreclosure rates are going to keep rising.”
The recession had its roots in the increasing mortgage defaults and delinquencies. Many pundits opine that recovery is difficult without the stabilizing of the housing sector. Home prices have to stabilize before one can start hoping.
Although apparently, delayed foreclosures may seem like a blessing for many borrowers for most it spells prolongation of the agony. They are kept hanging like sword of Damocles – ready to drop any moment with killing vigour.
One of the sufferers is Charlotte Jensen. She had begged them to foreclose upon becoming delinquent. But when she understood that nothing could be done to save her home she filed for bankruptcy and moved out bag and baggage with her family. Even after a year Bank of America has not taken back the house.
During the first three months of this year the number of seriously delinquent borrowers who were not yet served a foreclosure notice doubled to touch 3.04% calculating to loans worth $227 billion. During the first quarter of 2008 such type of loans calculated to $97 billion as per the findings of Inside Mortgage Finance. In better days the rate was considerably less – below 1% during the first three months of 2007 as per an industry publication.
The back log pile up indicates the failure of the lenders to keep pace with the rising number of delinquent units. Howard Glaser, consultant in housing during the Clinton era said, “Lenders are having an immensely difficult time handling the capacity. They are torn between loan modification, short sales, foreclosures, and they are finding they can’t do all these things at once, and do them well, so we’re seeing a lot of things falling through the cracks.”
The picture is not all that simple. The pile up also indicates the artificial slowing down of the process imposed by the government to help the real estate come back to its feet.
- Fewer Foreclosures Among Low-cost Brooklyn Homes
- Bank of America is a Lagging Behind in Loan Modifications to Prevent Foreclosures
- The Aftermath of the Housing Boom is Followed by Foreclosure Doom in Homestead
- Lenders Being Legally Challenged for Activating Predatory Lending
- Foreclosures Have Made Life for CEO’s Expensive and Fraught With Fear
- With Foreclosures and Unemployment Continuing it is Doubtful if Recession is Over
Related Posts
Posted in
Foreclosure |
No Comments »
Comments
Leave a Reply
Search
