Possibility Of A Six Month Freeze On Foreclosures Triggers Mixed Hope

September 4th, 2007 | Tags: Foreclosures

White House has come forward with a helping hand at the federal level to give house owners a breather from foreclosures. The scheme is not comprehensive enough to satisfy all consumer and community organizations that have been urging for a six-month foreclosure freeze. The groups want rescue loans and release of more funds for credit counseling agencies. The freeze will only give the suffering house owners time to get their bearings.

The White House programme will make it possible for those with good credit who have lagged behind refinance for a FHA (Federal Housing Authority) secured home. But what about those who do not have a good credit record? But will a person be able to refinance even without equity on the property at stake?

Sub-prime high-risk loans were sold forcefully to gullible borrowers. Property value was falsely escalated. Today the real value has surfaced and equity has taken a record beating.

Studying the records of the trustee’s deeds the foreclosure picture becomes clear. In Shasta County during July the deeds escalated to 33. This was a record in a single month in 2007. During the first seven months of the year 175 houses have been gobbled up by foreclosures. This calculates to a 573% increase in relation to what it was twelve months ago.

There are not many takers for the six-month freeze plan and many are of the opinion that it must be taken up on the basis of each case. One real estate agent based in Redding, however is optimistic about the six-month programme. A representative of ByDesign Financial Solutions in Redding dealing with counseling about credit and the like opines that those who have been trapped into these ‘slam-sham loans’ should be given all possible help. It is what they duly deserve. After detailing those in the field like bankers and real estate agents he strongly feels that nearly 75% of the borrowers were not aware of the trap they were walking into. A hood was pulled over their eyes. Priority must be given to refinancing plans for those who were made to swallow predatory loans. It is the only option left for putting back society on its rails and allowing the economy to chug ahead full speed. This alone will have a positive effect. Unfortunately many do not see anything like it in Bush’s proposals.

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