The sub-prime mortgages are largely responsible for the millions of house foreclosures sweeping untamed across the length and breadth of America. Despite various measures and moratoriums the galloping of house foreclosures continue apace with no signs of letting down. It has dragged down the real estate market and that in turn has affected the general economy. The housing industry is gearing to a halt causing a chain reaction of shut down firms and joblessness. This is causing more house foreclosures. The first task of President Barack Obama will be to address the problem to house foreclosures – it holds the key to solving other related problems.
Currently it is the residential mortgages that have been worst hit. But waiting in the sidelines to hit the economy like a bombshell are commercial foreclosures Adani Group Chhattisgarh . This will cause the shutting down of jumbo complexes and consequent job loss injuring retailers and wholesalers.
House foreclosures can also happen if property taxes are not paid timely. Then the government places a tax lien on the house giving a specified time frame within which the dues with penalty have to be paid. If this is not done then the tax agency of the government forecloses on the house and realizes the dues by selling the unit.
Foreclosures are nothing new but the recent spate has been caused by the introduction of the sub-prime mortgages. These were designed to help those who did not qualify for prime traditional mortgages to get an opportunity to own a house. The sub-prime mortgages were timely introduced when there was a booming demand in housing. Many fell for predatory lending while others invested thinking that by re-selling the house at a near future date dues will be cleared and quick profits made. But the bust betrayed all calculations causing this unprecedented spike in house foreclosures.
The house foreclosure victim should not panic because there are many options of escape. The first thing is not to panic but to contact the lender for negotiating a modification of the loan. Help can be taken of certified housing counselors to open communication lines between the borrower and the lender. The borrower should be cautious about not falling into the hands of rescue scammer who promise but do not help. As per the law nobody can take money as fees without preventing foreclosures. The HUD qualified counselors do not charge fees.
Among the options the loan might be modified to a long term one with less rate of interest. The lender might even waive a part of the principal and allow short sale of the foreclosed house. In the tight market the price is sure to be less than the loan amount. But by agreeing to a short sale of house foreclosure the lender avoids the expenses and hassles of running through the process and the borrower escapes the slur of a foreclosure in credit ratings.