We all know that the foreclosure crisis in America is serious and is causing several banks to fail. The situation is actually becoming worse, and an unintended consequence of foreclosure is causing several problems across the nation which receive very little press, and most Americans who still are financially solvent fail to understand that foreclosure constitutes a "double-whammy" to those who have lost their homes, and it affects the poor and lower income people the worst, some of whom have not experienced a foreclosure. Foreclosures are also posing a unique problem for law enforcement. Atlanta, Georgia, is leading the fight in what appears to be a losing battle to protect homes that are vacant. It's costing the banks even more money as vacant homes are razed by thieves, stripping copper and anything of value that can be carted away.
To appreciate the huge number of foreclosures that are occurring, this brief article adds insight but still only scratches the surface of the depth of the issue - and to show the increase in how serious these issues are, the first article was written in August of 2007, and the second was posted by the NT Times in June of this year:
American home foreclosures leap 93% in a year
Nevada is bearing the brunt of the crumbling US housing market, with about one in every 200 households filing for foreclosure, a survey showed yesterday.- Advertisement -
RealtyTrac, an online marketplace for repossessed properties, showed US home foreclosures jumped 9% in July from June, and 93% on a year ago.
The number of default notices and bank repossessions totalled 179,599. Across the US, there is now a foreclosure of one in every 693 homes. MORE
The situation in 2007 was serious; however, based on this recent article from the NY Times, it appears to be getting worse:
About 1 in 11 Mortgageholders Face Loan Problems
By VIKAS BAJAJ and MICHAEL M. GRYNBAUM
Published: June 6, 2008
About 1 in 11 American mortgages were past due or in foreclosure at the end of March, according to a report released on Thursday, a figure that is rising fast as home prices fall and the job market weakens.
The first three months of 2008 marked the worst quarter for American homeowners in nearly three decades, according to the report, issued by the Mortgage Bankers Association. The rate of new foreclosures and past-due payments surged to their highest level since 1979, when the group first started collecting the data.
All told, about 8.8 percent of home loans were past due or in foreclosure, or about 4.8 million loans. That is up from 7.9 percent at the end of December. (About a third of American homeowners do not have mortgages.) MUCH MORE- Advertisement -
As the mortgage crisis worsens, more and more homes remain empty; homes that go into foreclosure often stay vacant for over a year, sometimes up to two years, depending on the laws of each individual state. When a homeowner defaults on his/her mortgage and vacates their home, it causes two unintended consequences that are affecting millions of Americans who don't own homes, but depend on the rental market to secure a roof over their heads. It's another crisis that is developing which receives almost no press coverage at all.
When a family loses their home, it's obvious they have to go somewhere, and the only obvious alternative is to rent another home, if possible. Owners of rental property are wary of an individual that has just defaulted on a mortgage, and credit approval is often a challenge. Although homes for rent are becoming harder to find, they are often priced higher than what the family was paying on a mortgage. People who need to rent are being gouged and often wind-up living in a home and neighborhood that reeks of poverty, adding depression and a lack of self-esteem to people who have already suffered the calamity of losing a home.
In TAUNTON, MA (AP) A 53-year-old wife and mother fatally shot herself shortly after faxing a letter to her mortgage company saying that by the time they foreclosed on her house that day, she would be dead.