Foreclosure Help Measures Not In Pace With The Increasing Numbers

April 24th, 2008 | Tags: Foreclosure Crisis

The present situation is such that mortgage lenders are now eager to help the lenders stay in their houses. Government at all levels and local communities are pitching in to mitigate the crisis but these foreclosure help-measures are not in pace with the increasing numbers being posted. This is according to the latest national report released with the cooperation of North Carolina officials.

The Foreclosure Prevention Working Group of the state comprises of the Attorneys General and banks. All are trying to avoid this landslide of foreclosures as the real estate sinks hand in hand with the credit market. The deputy commissioner of Bank Mark Pearce of North Carolina said that in the second report more borrowers are sitting with the lenders regarding ‘loss mitigation’. But this plus point has been offset by an increase in the number of delinquent borrowers. All in all the help line falls far short of the required demand. Pearce added that compared to other states although North Carolina is in a better position, there is an urgent need ‘to redouble our efforts to avoid preventable foreclosures.’

According to the latest findings of the group seven out of ten of those sitting in the high risk foreclosure zone are still not on the right track as regards opening up communications with the lender. To make matters worse the staffs attached to the banks who are the prime lenders do not have the sufficient strength to deal with the tide of inquiries pouring in. The report thus suggests there should be a more systematic approach to make the process more streamlined. The foreclosure process will slow down only if loans are modified faster. This in turn will prevent the neighbourhoods from being dotted with vacant properties – a curse to the locality for many reasons. In the national foreclosure race North Carolina ranks 26th.

It has become a vicious circle with the falling of real estate market leading to the rise of foreclosure numbers. Houses cannot be sold because of the market glut. More often than not the value of the mortgaged houses is less than the loan amount that is due. Unable to sell the houses the number of foreclosure increases. Finally it leads to bank take over of units. The houses lie vacant attracting health problems and criminal activities. This in turn lowers the value of adjacent houses that leads to another chain of foreclosures. Caught in the snare are the government tax and revenue kitties.