Crisis in Foreclosure Homes Still Evident
The number of foreclosure homes increased by more than five percent during the third quarter of 2009 when compared to the previous quarter. The increase occurred despite the presence of the Making Home Affordable program of the federal government that attempts to help borrowers undergoing financial hardships to get a loan modification to reduce their monthly payments. It appears that the government program has been overwhelmed by the large number of layoffs.
There were almost 938,000 foreclosure homes during the period of July to September 2009, which is approximately 48,000 homes more than the preceding quarter. At this rate, the number of foreclosure filings is expected to reach approximately 3.5 million for the whole year of 2009, which is much higher than the 2.3 million filings in 2008.
The primary reason for the rise in the foreclosure rate, in the spite of many economists claiming that the recession is over, has been the unemployment rate, which has attained a record level of 9.8 percent for last the 26 years. Moreover, experts have predicted that the unemployment rate will keep on rising until it will attain its highest level in the middle of 2010. In their own way, mortgage lenders have been helping by allowing the borrowers to postpone their payments by three to six months while they are trying to find work. Unfortunately, looking for work at a time when the unemployment rate has reached an all-time high is very tough.
The Obama Administration had recently claimed that its program had reached a milestone when more than half a million homeowners had their loans modified and monthly payments reduced. Unfortunately, the number of borrowers getting into default still surpassed the number of homeowners who were being given loan modifications.
Somehow, mortgage companies have been trying to reduce the impact of the housing crisis by slowing down the rate of foreclosures. They have been trying to examine whether the borrowers would be able to fulfill the requirements for the Making Home Affordable program of the Obama Administration. However, experts predict that a substantial number of those borrowers would not qualify and they forecast a new set of forecloser homes coming into the market in 2010. Unfortunately, this will continue to bring down home prices. It has been observed that the financial problems being experienced by some of the borrowers are so massive that banks and lenders are finding it impossible to structure a loan modification plan that would fit their current income capacity. For more foreclosure news stop by http://www.bestforeclosurenews.com
