Foreclosure Crisis: Number Of Americans Infected With Foreclosure Virus Increasing

The number of citizens affected by foreclosures has doubled since the previous year. This is according to an August survey. More are finding their interest rates rising to unmanageable proportions.

With the decline in the housing sector the economic growth of USA is becoming slow. More than hundred mortgage jumbo companies have gone into the red. No less than the chief economist of Fannie Mae opines this view. In August 108,716 default notices have been issued to borrowers. Last year it was 42,144 – showing a double jump. August was the worst month with a 50% high jump from July.

Other renowned experts foretell worse days ahead. A titanic wave is just beginning to form ready to lash the shores. Many others are waiting in line for the time is fast approaching when the rates will be reset adversely. Few escape routes are left open.

Sub-prime loans were advanced with tempting tease rates in the initial two years or so. Many fell for this trap and took loans they could ill afford. Now the honeymoon period is over and the wolf is beginning to bare its fangs. A borrower who paid $554 as 2% for a loan of $150,000 would now have to pay $1,100 or 8% of the loan.

Foreclosure crisis is attacking. The numbers are alarming. The total rose to 243,947 in August – it meant 115% increase from what it was in August 2006. The numbers are inclusive of all the four stages of the process of foreclosure – defaults, filings, foreclosure auctions and repossessions. This might lead to a doubling or tripling counting in the case of multiple mortgages for one unit. Since 2005 this August has seen the highest figures. Of all the house loans in the country the sub-prime ones consist of 7.3% and 44% of all new foreclosures. A banker’s group has been conducting a reliable survey. 15% of all the ARM’s represent 15% of the new foreclosures.

The nightmare for the borrower begins when he or she is late by more than three months in making repayments. The lender then files a default notice. If within the notice period the borrower still cannot redeem his dues then the unit is auctioned off. The lender takes his dues after the sale of the unit. The tax authorities also take their cut. With house prices falling sometimes the equity does not cover even the dues.

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