Foreclosures Suffocating Indiana

It is a hard fact that foreclosures are blowing away the roof off American dreams.. Some are of the opinion that at the root of the problem is unemployment. With proper employment opportunities people will be able to successfully boldly tackle foreclosures. Another point is that borrowers should become more alert and financially literate before taking a loan.

In Indiana about 75% of the residents are house owners. It has also the dubious distinction of ranking second in number of foreclosures. The general opinion is that local economic problems have hit the people hard. About 20% of foreclosures may be accounted for this. From 2003 the unemployment rate has been the highest in Indiana in the country and the majority of the affected were owners of houses. There are of course many other contributory causes like low appreciation of property value, affordable housing and high ratio of loan to value.

The equity picture is grim. Those who sell a house and buy another unit does not have much at hand to invest in the new property. There is disagreement on the issue regarding ARM (adjustable rate mortgages) and property taxes being the prime reasons for the present debacle. Some houses were foreclosed and then sold in the MLS (multiple listing service) for a good jump in 2006 in Lake and Porter Counties as well as other chosen elite urban localities. It is argued that the timing corresponds to when reassessment was made and when residents got the tax bill. It can’t be wished away as mere coincidence. In fact it did have a negative impact.

The tremors of the sub-prime fiasco are being felt throughout the year locally as well as across the entire country. The apprehension is that in the near future about 2 million ARM’s will be reset. Interest rates will go up. It goes without saying that any person with good credit rating would never fall for the trap of teaser rates offered in the sub-prime category. They would go for the conventional loans. It is plain common sense. An ARM initially looks good. The borrower hopes that within a year or so economic front will look up. But that is plain daydreaming. In reality it either remains the same or becomes worse. At the root is unrealistic planning and policy making. Knowledge and awareness coupled with common sense will safeguard the individual from greed and naive planning.

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