Foreclosure : The Foreclosure Crisis

The mortgage crisis of 2007 marked catastrophe for millions of homeowners who suffered from foreclosure and short sales. Most of the problems involving the foreclosing of families’ homes could boil down to risky borrowing and lending. Lenders were pushed to ensure families would be eligible for a loan, when in previous years the same families would have been deemed too high-risk to obtain any kind of loan. With the increase in high-risk families obtaining loans, there was a huge increase in home buyers and subsequently a rapid increase in home prices. As a result, prices peaked and then began falling just as fast as they rose. Soon after families began to default on their mortgages forcing them either into foreclosure or short sales. Who was to blame for the risky lending and borrowing that caused the mortgage meltdown? Many might blame the company Fannie Mae and Freddie Mac, but in reality the entire system of buying and selling and free market failed home owners and the housing economy.

The economic crisis that hit the country took many jobs or people had their hours cut. With this situation happening, many people were finding themselves short on their mortgage payments and needing to go into foreclosure or having a short sale on their homes. Either option the homeowner chose or had chosen for them, they found themselves with poor credit and no way to become homeowners again. However, most wait times before was a minimum of two years up to seven years before that previous owner could be eligible for traditional loans.

In the year 2000, the stock market crashed whichshifted thepeople’s money away from the stock market and into the housing market. Many people were buying homes, which led to banks offering more loans, including subprimed loans. Most loans, specifically, subprimed loans began going into default once the credit markets froze in the summer 2007. Things began to deteriorate rapidly. The offering of subprimed loans stopped completely and interest rates for other types of borrowing such as corporate loans and consumer loans rose dramatically. Since the interest rates of loans were so high, home owners were not able to afford to make payments, which caused them to be evicted from their homes. In 2013, the government introduced new laws and

The foreclosure crisis that devastated our economy several years ago not only impacted the middle class wealth but also the upper class wealth. The upper class families who were not prepared for this crisishad to downsize their primary homes or utilize their investments and savings to keep their properties. The middle class families were hit the hardest during this crisis with losing there homes, depleting their life savings and investments. The middle class families who were forced to foreclose on their homes due to their loss of income and financial security moved into rental apartments or moved to a family members home to regroup from this crisis. Areas that may have added to foreclosures or short sales were the lost of many jobs due to a corporation downsizing of their employees, or the over appraising of a property if the property was appraised higher than the true value or what a buyer was willing to pay for the property. Homeowners were forced to sale their property at a lower price if the homeowner was in the process of a divorce, relocating for a job or foreclosing because they had fallen behind on their mortgage payments.I have seen circumstances where certain peoplelived above their means by spending more for a home or nonessential items like luxury vehicles they couldnot actually afford to pay.

Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.

I have a unique perspective in that I have gone through the foreclosure process twice since 2009. I have experienced firsthand what it is like to seemingly lose everything, to feel as low as I have ever felt, to be embarrassed and mortified beyond belief

Foreclosure has hit so many people in the U.S. that now people feel like giving up. America is known for pushing forward and fighting for a better tomorrow, but now it seems like that tomorrow is only going to get worse. Fighting foreclosure starts in the home with the family. The parents are the ones needing to be a light in the children’s eyes and showing them a good way of saving could help them also in the future by not making any mistakes with their credit. Jobs are scares but getting any job period could allow some of the debt to slowly fall off. Even if it comes to having to sell your house, doing it the best way can only helps your credit which will help you in the long run when you are in need of buying another house. Letting go

It is very difficult to get a loan from a commercial bank for first-time homebuyers, and for existing homeowners who are in the process of foreclosure. The loan modification programs that are available now are bandages for a much bigger problem, the problem lies in the underlying banking system practices, polices and traditional way of doing business.

1. Don’t ignore the problem. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. If yes, bring the owners of the foreclosed house to the table with the bank and reissue a new mortgage on that same house at a rate under 5% utilizing the original balance, no matter if the house is now below the value of the current market or not. Do not charge closing costs, and give the owner to two months of deferred payments with no interest. This may allow the original owner time to recondition an abandoned home. The bank can then reissue a new mortgage with the lower fixed interest rate at the price the house was repossessed at, no matter what the current sales value is. It may give the bank access to equity if the price of the house did not plummet. This idea makes the owner have some skin in the game, as they will have to stay in the house long term to reacquire equity. Have part of the deal be that the bank withdraws from the credit bureau the declaration of bankruptcy so the owner’s credit record is cleared. Everyone understands the impact a poor credit rating has on every future purchase and may be enough to make the deal attractive to the owner. Condition the offer on prompt payments and good care of the reclaimed property. Most owners never wanted to leave their homes. They usually had no

This has put a major impact amongst many individuals that are currently living in the United States. As I look and view the news about foreclosure and I sit and watch those who are suffering from it, I am deeply hurt and thankful simultaneously.

All of a sudden this word “FORECLOSURE” was being talked about by everyone. Every night on the news the reporters would talk about the foreclosure rate, and how many people were losing their homes. The radio stations were advertising seminars for people who were going into foreclosure and needed assistance. The newspaper had several stories

Foreclosure is one of the hardest things that a person can be introduced to. It can make a person or break a person, but for me it made me so much stronger. I can truly say I have accomplished much more since getting out of a foreclosure scam at a very young age of 16. Throughout that hard time I just continued to not only motivate myself, but my mother because I understand getting something taken away from you that you have worked hard for can destroy a good person. This is what happened to my family and I, and what we did to overcome it.

There are many different ways a potential home buyer with less than stellar credit can dip their toes into the homeownership pool without feeling like they have to take the plunge and swim against the current. Traditional financing is not usually an option for several years (depending upon the program) after a foreclosure, and even if it were, many homeowners who lost everything to foreclosure may be averse to going the traditional route.

Statistics say, “79% of boomerang buyers are interested in buying a house again... 41% report that their income is higher than when they 1st purchased.” (www.tucson-property-management-companies.info) These buyers obviously have to rebuild their credit and endure the waiting periods that lenders require before reviewing their financial status for another mortgage. Waiting periods could range from twelve months to as long as seven years after a short sale or foreclosure, depending on the lender and/or program the borrower has committed to. If a 'boomerang buyer ' meets the criteria and participates in the Federal Housing Administration’s (FHA) Back-To-Work Program, “The participant could buy a new property in as few as twelve months following his foreclosure or short sale.” (www.heraldtribune.com)