The question on many homeowners’ minds is born in regards to foreclosure rates. Are they still rising? Where does the United States currently stand in this foreclosure problem? Most people asking these questions understand that the government has its hand in attempting to solve the problem, prop up} home values, and improve statistics.
Government bailout plans have been in effect since October 2007 and another was released early in 2009, yet the national foreclosure rates have continued to increase in many places. Some cities and states are seeing decreases, but many experts are skeptical as to their effects. In fact, some pundits see an even more dismal housing market in the near future.
The problem lies in the vicious cycle associated with some people being in financial straits while others want to prevent it from occurring to them. You may be facing foreclosure, but your bank has many borrowers that may be in the same situation. If they make exceptions for everyone, they may end up putting themselves in the same dire straits. Thus, lenders have been somewhat unwilling to realize the huge losses they have sustained on their mortgage investments, and have been rejecting workout programs as a result.
Back at the end of 2007, the United States Treasury Department was already arranging together plans in an attempt to nip rising foreclosure rates in the bud. Unfortunately, there is obviously a flaw in the plans they have laid out as the number of homeowners who fall delinquent on their mortgage payments continues to increase. The reason is because no resources were made available in the assistance of the growing number of homeowners and the lag in aid led to even more foreclosures.
As the plans currently stand, there are at least five varying bailout programs to assist in lowering the rate of foreclosures nationwide. These include Hope Now, Project Lifeline, the Hope for Homeowners Act, the Home Affordable Modification Program, and the Home Affordable Foreclosure Alternatives plan. So far, none has been as successful as initially expected and hoped for.
The argument made by many financial professionals is that the reason these programs have failed to have the impact wished for is because they are cheap-money policies. All they have really demonstrated is a greater downward pressure on the state of the economy. With localized improvements in foreclosure rates, many hope the limited number of improvements will rise throughout the country.
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