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Foreclosure, what are your options?
The amount of foreclosures in the United States has skyrocketed, due to a global financial crisis that threatens to get worse. If you're in a situation where you might lose your home to foreclosure, what steps should you take to avoid a negative outcome? One simple fact
should have you breathing a bit easier these days, right now less mortgage holders than ever are anxious to foreclose, especially if you can make payments.
Fannie Mae and Freddie Mac have already place a 6 week moratorium on foreclosures, and experts expect other companies to follow suit shortly.
"It’s a giant time out," Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, said. "I wouldn't be surprised to see this across the board."
Fannie and Freddie foreclosure breather may help you
The fact that Fannie and Freddie have quit doing foreclosures bodes well for many of the nation's homeowners, since the company currently holds $5.2 trillion of the $12 trillion U.S. home mortgage market.
The fact that the nation is facing its' worst home crisis since the 1930s is working to your advantage. If you still have the means to make payments to your mortgage holder, you may still have a shot at saving your home.
For other homeowners, who are underwater on their mortgage, solutions are not quite as abundant or simple. However, there even seem to be answers coming for folks in this situation.
Underwater mortgages, a term which simply means the homeowner owes more on his bank loan than the house is worth, have become much more common since 2006, due to the precipitous drop in home prices felt nationwide.
Even "underwater" mortgage holders who haven't lost their jobs will probably weather the storm.
"The economists found that homeowners typically lost their homes only after at least two things happened: Their home values dropped and they either couldn't afford the payments or stopped making payments after losing hope that prices would eventually recover."
Many such mortgages are concentrated in certain geographic areas which are now deemed "overbuilt" by developers. Many people stopped paying their mortgages in overbuilt areas because they couldn't really afford them in the first place, and their property values have dropped to an untenable level. Depending on just how low your home value is, walking away from the mortgage, if offered as a legitimate option, can become very attractive.
In areas that have been hard hit by the crisis, affects of the bailout are already being felt. Some area experts even predict that a "peak" in foreclosures may have already happened in particularly hard hit areas.
"Things could be worse, absolutely," said George Roddie. "As far as we can see, the (foreclosure) market has pretty much peaked out."
Roddie said he thinks thinks may not get worse is because he's seeing more of a willingness on the part of lenders to work with customers, now that they have billions of dollars of federal aid capital at their disposals.
Time is of the essence if you're involved in a foreclosure. Contact your lender to see if they're willing to work out a plan that will keep you in your home.
Copyright 2008 by Times of the Internet. All Rights Reserved.
