Foreclosure Modifications

Posted in Foreclosure, January 21st, 2008 |

The mortgage lenders have become proactive in solving the foreclosure crisis. This is largely because with so many thousands weighing them down it has led to a negative financial losses for them. The houses cannot be sold. On top of this there is pressure from the public and from the government at all levels – local, state and federal The mortgage lenders modified about 54,000 loans and set up new agreements with 183,000 borrowers during the third quarter of 2007 according to a report released by Mortgage Banker’s Association.

The report took under its survey approximately 33 million mortgages – that is 62% of all the outstanding loans. No regional breakdowns have been analyzed. It may bring smile to many but it is disconcerting to know that foreclosures were initiated against 384,000 loan holders during this third quarter. These were against those who did not reside in the units and repeated attempts to contact them had met with failure. As such there is no alternative but to go ahead with foreclosures.

The vice president of the research team Jay Brinkman, said that the mortgage companies did their best to accommodate those that qualified for modification. The number of those being helped was more favourable when compared with the numbers that could not be helped because of unavoidable reasons. Brinkman opined that the US Treasury Department was largely instrumental in bringing the lending group together to find out solutions for this grim foreclosure crisis.

However not all are happy with either the government measures or the half-hearted attempts of the lending groups. At least no positive effect has been seen on the field – foreclosures show no signs of retreating; rather foreclosures are advancing with deadly speed. Some cities have started suing banks for having behaved like public nuisances and compared them to drug peddlers for luring in the gullible with their predatory lending. Foreclosed houses are attracting crime and bringing down the quality of life in the entire neighbourhoods. Overgrown gardens and stagnant unguarded pools are posing health hazards. This is further pulling down the real estate market. Foreclosed houses do not pay taxes until these are bought by a new owner. So tax kitties are becoming lighter. With sale of houses at an all time low there are no transfer fees coming into the government funds. Politicians are worried about vote backs as word is going round of certain groups having been specially targeted.