HOME,
Foreclosures On The Rise
Owning a home is the foundation of the American Dream, but for many it has become a nightmare.
The real estate boom in the last 11 years was unprecedented with the housing markets growth; banks put creative mortgage products on the street, often adjustable-rate loan interest deals that, if used well, would turn the key to home ownership for many who thought the dream impossible just a few years earlier.
But for those who got caught in that rising-rate trap, and the subprime “teaser” interest rates started to rise a few years ago caught many unprepared, and the number of foreclosures has skyrocketed across the country this year.
According to March 13 figures released by the Mortgage Bankers Association, a national organization based in Washington, D.C., mortgage delinquencies on one- to four-unit residential properties rose to 4.95 percent for the fourth quarter of 2006, the highest since first-quarter 2004. The rate for foreclosures—meaning that the lender takes back the home—jumped to 1.19 percent, up from 1.05 in the third quarter.
Those figures make it clear that the housing boom has cooled.
The crunch may force many to take drastic action to save their homes. A simple refinance may be difficult to pull off for someone in foreclosure, since the banks are now being more selective about whom they lend money to.