Immunizing Foreclosures

Tags: Foreclosure, HUD, lenders, mortgage, texas
Posted in Foreclosures, May 9th, 2008 |

The virus is raging across the country. Foreclosures respect nothing – socio-economic barriers, regions, or celebrity status. Like fire it has an insatiable appetite and is truly communistic in its approach – levels high and low into one big gulp. It is a challenge – one of the many mankind has always been facing. Man, being man must rise to it and go about immunizing foreclosures – taking steps to neutralize it.

Foreclosures jumped by 57% from March 2007 to March 2008. It increased by 5% from February to March this year. The blame is being put on predatory lending practices. When interest rates began to increase foreclosures began to take over the scene. One by one the houses began to tumble and fell vacant. The borrowers lost their property as well credit ratings. The lenders found themselves overwhelmed with unsold units while the neighbourhoods became dotted with eerie desolate houses. Crime and disease began to play havoc. A massive credit crunch hit the economy while tax kitties began to dry up. Foreclosures also resulted from the usual personal causes – illness, death, job loss and or divorce.

Considering the atmosphere even if one is not in foreclosure it is better to be forewarned so as to be forearmed. It is like being vaccinated to avoid ahead the attack from the virus.

The latest buzzword is ‘save’! Observe thrift and save for a rainy day. Put something in the piggy bank everyday if not every month. If there is a temporary loss of income one can tide over the mortgage commitments by dipping into this fund. The best thing is to target putting an amount that will cover a lapse of three months.

Saving will become effective by reducing expenses. Cutting down on unnecessary expenses like dining out or disconnecting premium cable channels will go a long way in reducing spending.

If the house is already inside the foreclosure risk zone and the borrower has tripped on one payment there is still hope to remedy matters. The house that is the home can still be saved. The banks do not want any more foreclosures. Consequently they are amenable to talks since the process is costly for the lender also. To foreclose a house the average cost is $40,000. Free advice and often help is available from HUD authorized counseling agencies. The avenues of help open are forbearance, reinstatement, modification, short sale, deed in lieu of foreclosure and assumption.