Foreclosure: Save Home Owners Their Homes

November 14th, 2007 | Tags: Foreclosure

The diabolical consequences of 2 million people rendered homeless due to foreclosures are dreadful to think. It is too large a number and come what may they are to be saved. December 10 is ear-marked to raise the voice unanimously from Wall Street across the country in every city to be heard at Washington.

The impacts of the foreclosure epidemics are disastrous – in the next year due to swelling up of the re-adjustable rates on mortgages, huge number of defaults are expected to happen to an estimated 2 million households; home owners will lose their equity hard earned through the years and the amount will run to billions of dollars; real estate market will be flooded by the distress sale of foreclosure homes and the already dwindling prices of secondary homes will fall more steeply; home owners can never get a decent price to meet their commitments and all these will reflect more and more on the financial budgeting of every U.S. family .

Already signs are showing up that the recession is round the corner. The writing on the wall is quite clear by more than $40 billion going down the drain by writing off bad debts and defaulted loans. Even before the winter approaching, gas prices have touched $100 per barrel. Rising food prices and cost of living has made every American to struggle making both ends meet with income being stagnant.

Ironically there seems to be no action to address this grave concern of the U.S. citizens and through them the nation as a whole. Instead the banks and investment houses that were responsible for these dire consequences, by blind predatory lending tactics in pushing up the people to the brim are shown a soft corner. Interest rates are lowered by Federal Reserve; Citibank and other lenders are helped to manage the incurred loss by setting up a fund of $70 billion. These institutions are not advised to get risk counseling while the unwary house owner who fell for adjustable rates of interest without knowing the consequences of default and foreclosure is advised to seek helpline for counseling. The politicians are fishing in the troubled waters as it suits their campaign accusing each other, the presidential candidates notwithstanding.

An unbiased analysis of the whole situation shows that the home buyers were lured by mortgage loans with adjustable rates by seeing only the tip of the ice berg, not knowing the hidden charges to surface as years go bye; mortgage brokers were busy canvassing targeted audience of single women, newly married couples and financially weaker sections of the society into getting 100% of loans including closing costs; weak or no credit history were checked or bothered about while extending the loan, keeping an eye on the soaring house prices during boom years. All these combined together in warranting the sad state of affairs faced today, leading to unheard of financial gloom only months from now.

So before the economy hits the rock, it is time now to swing into tangible and concerted action to bail out the home owners from foreclosure of their respective homes. Unanimous and louder voice is to be raised to extend help to millions of these citizens of U.S. who, if fail, will also rock the boat of entire economy. Renegotiations of the defaulted loans should be made mandatory before foreclosure; Postponement of all resets by adjustable rates mortgages to the end of the loan period; Government sponsored agencies like Fannie Mae and FHA should show the way to others by renegotiations before foreclosing - are some immediate measures needed

Simply put the above corrective steps will show a semblance of action in the right direction before it is too late.

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