According to the Los Angeles times the largest numbers of Californians in recorded history are not making their mortgage payments. Strangely, however, the numbers of Californians loosing their homes to foreclosure is not rising nearly as rapidly as the numbers of non-paying home owners would hint. How could this be possible when the rates of unemployment are steadily rising during the long-lasting recession?
To start off, there have been fewer foreclosures partly due to the lenders‘ self imposed moratorium on foreclosures. This moratorium partly comes from the ineffectiveness at recouping loses that foreclosures has gained in recent times as well as an inability in the staff of lenders to keep up with an extra influx of foreclosures leading to foreclosures not happening in order to save paperwork.
Fannie Mae and Fannie Mac have ceased foreclosures on loans they created meanwhile other groups like Citigroup Incorporated, Wells Fargo & Company, JPMorgan Chase & Company, Morgan Stanley and Bank of America Corporation are waiting for President Obama to bring his housing plan into action first. Amendments that make it more burdensome to perform foreclosures have only fed into this effect by further decreasing the numbers of foreclosures. From the fourth quarter of 2008 to the first quarter of 2009 foreclosures actually dropped by 6%.
The number of foreclosures has fallen not just in California, but across the entire nation with a 13% decrease in the number of homes repossessed by banks yet the same strange trend of a 10% increase in the number of defaults. One theory is that loan refinancing is causing more people to fall into default with their mortgages, but the availability of loan refinancing is very limited by the fact that only those who have never missed a payment on their loan may refinance. So, what about those who are missing payments? Can Obama's plan save them?
Those waiting for Obama's plan may be in for a surprise, however, as "many troubled borrowers in California are not eligible for help under Obama's plan because they owe much more on their loans than their homes are worth. To qualify for one of Obama's programs, a mortgage's balance must be no more than 105% of the value of the home", quotes the Los Angeles Times.
With unemployment reaching 11.2% in California and 8.5% nationally, economists feel that soon even more people will be missing mortgage payments and be in default just due to the fact that it will be more difficult for them to keep up with mortgage payments. Luckily, as long as the current trends hold out, foreclosures should not be rising too steadily as "banks don't want to overtax a housing market already flooded with cut-rate properties repossessed by lenders." Attorney Jeff Isaacs suggests that it would be a good idea to hire an attorney to help with loan modifications if you are in default to avoid making a wrong decision out of desperation. Isaacs believes that "There is so much confusion out there, and people end up making really bad decisions, like borrowing against their 401(k) to make their house payments. You do that and you are destined for real misery down the road."
1st Foreclosure Prevention is here for you through the good times and through the bad times as well and has been happily serving the people of California for years. It does not matter if you need financial advice or a loan modification, 1st Foreclosure Prevention is here to listen and lend a hand. 1st Foreclosure Prevention today to see how we can help you!
Contact: 1st Foreclosure Prevention
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Contact No: 215-660-5494
Fax: 800-477-7951
Address: 67 Buck Road B25, Huntingdon Valley, PA 19006
http://www.1stforeclosureprevention.com