Home Mortgage Defaults on the Rise
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by: marciafreeman
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The rate of foreclosures on home mortgage loans continued to go up last month. The Mortgage Bankers Association started tracking home mortgage foreclosure and delinquency data in the early 1970s and the current rate is higher than any time since then. Unemployment was at 8.1 percent in February. Home values continue to decrease in many areas of the country. Buyers in large part seem hesitant to jump into the ailing housing market, in spite of the announcement of a new $275 billion government stimulus plan. The President vows to lend a hand to responsible homeowners before they are in danger of losing their homes.
Some homeowners who took on a mortgage that was well within their means and have made all their payments on time, are angered that taxpayers have to pick up the tab for irresponsible borrowers who bought more than they could afford. But the plan the new administration has put forward maintains that it will boost all consumers who own a home. The argument for helping troubled homeowners is that home values will be driven down in neighborhoods that have many foreclosed properties. Communities will deteriorate, as more and more people lose their homes. It is, therefore, in the best interest of all homeowners that their tax dollars are put toward helping people stay in their homes and keeping the community together.
Not just anyone will be eligible to modify a home mortgage under the housing stimulus plan. The home must be the principal residence of and owned by the applicant. If a home mortgage was obtained before 2009, it can be considered. The home owner must have experienced some event that led to financial loss, such as being laid off or a decrease in pay that will prevent him from making his payments. Lastly, it must be determined that the current home mortgage bills each month are greater than 31 percent of monthly earnings. The housing aid plan does not mean that no homeowner will go into foreclosure. Those who will clearly not be able to make their home mortgage payments, in spite of loan modifications, may have to go into foreclosure. Only time will tell if giving home mortgage modifications to troubled borrowers will be enough to help drastically reduce the rising rate of foreclosures and delinquencies. Those consumers who have been living within their means and have made sound financial decisions will, indeed, be giving tax dollars to help those that did not make such wise decisions. But many experts believe the consequences of not doing so would devastate an already battered staple of the economy. Similar topics Mortgage calculator | Home loan | Mortgage loans | Home equity loan | Refinance rates |
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