Foreclosure is a growing problem in most states across our nation right now. Unemployment rates over the past year have been above average and the federal stimulus does not seem to be as effective as initially expected. Federal stimulus funds are running out and the economy, and specifically the housing and mortgage market are struggling. Foreclosures numbers continue to increase as many seek loan modification programs to prevent the foreclosure process from continuing or initiating.
Specific news reports reveal that the worst foreclosure rates were in Florida, California, Nevada, and Arizona. Homeowners, along with the federal government, are trying to prevent home foreclosures. As the foreclosure rates increase, home market value in the area decreases and housing market recovery stalls along with the general health of the overall economy. The state of the housing market has a domino effect and consumer confidence in the United states is as low as the housing market right now. Individual states want to stop foreclosures and the even President Obama want to help people stay in their homes. One method that has been set up in many states is a type of mediation. In order to prevent foreclosure, a third party is utilized to negotiate a new agreement between the borrower and the home loan provider. Payments still must be made, but the payment are modified so that both parties gain something. The borrower gets to keep their home and make modified payments and the loan servicer does not have to deal with a foreclosure and continues to receive modified payments as the parties continue to do business and resolve the mortgage dispute. The U.S. Department of Housing and Urban Development can provide homeowners in the midst of foreclosure of threatened by foreclosure with information related to saving their homes, as well as referrals to local housing counseling agencies.
Author: Frank Matto
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