The Associated Press is reporting that the foreclosure crisis will persist well into next year as high unemployment “pushes more people out of homes, pulls down housing prices and raises concerns about the broader economic recovery.”
The latest evidence comes this week in a report from the Mortgage Bankers Association identifying that a rising tide of fixed-rate home loans made to people with good credit are now facing foreclosure, marking a surprising shift from assumptions that only riskier subprime loans are driving the current housing crisis. The report also stated that 14 percent of homeowners with a mortgage were either late on payments or in foreclosure at the end of September 2009, marking another record-high for the ninth straight quarter.
These findings speak to an even more beleaguered housing market than previously thought, bearing the weight of even more home-loan defaults. The main culprit, industry experts say, is rising unemployment, forcing even the most responsible homeowners to fall behind on their mortgages.
As the AP found, many laid-off homeowners might be able to survive on their savings for a while, but “the longer the economic situation stays in place, the less likely they are to hold on,” said Jay Brinkmann, chief economist at the Mortgage Bankers Association.
As Robert L. Borosage, Co-Director of the Campaign for America’s Future, blogged this week, “[o]ne in six workers is unemployed, has given up looking or is forced to work part-time. For young workers aged 16 to 24, unemployment is 19%. For young African Americans, unemployment is at 30%. And as Federal Reserve Chair Ben Bernanke testified yesterday, we're likely to see -- at best -- a slow recovery with no new job growth. That exacts a devastating toll in hopes crushed, families stressed, young people stalled, and poverty and hunger spreading.And even if we avoid another downturn, the job picture will get worse. Crippling state deficits -- over $260 billion over 2 years -- will force layoffs that cost an estimated 900,000 jobs next year if nothing is done.”
As a direct result of this explosion of job losses, this year, more than 3 million foreclosures are predicted, as homeowners are increasingly incapable of paying the mortgage during a brutal recession. As the financial meltdown continues and unemployment surges, the millions that have now slipped into delinquency and foreclosure with only one conceivable way out: bankruptcy.
Homeowners with prime and sub-prime mortgages alike are taking immediate action, arming themselves with basic bankruptcy tools. So, if you’re interested in staying in your home, looking for permanent solutions to foreclosure threats, and ready to quit spending and start saving, there’s never been a better time to consult with a bankruptcy expert. For more information regarding homeowner benefits of bankruptcy filing, visit The Law Offices of John T. Orcutt’s “Things to See and Hear” information.
While recent reports of the nation’s financial future are nothing short of bleak, the good news remains that through bankruptcy laws, homeowners facing foreclosure can take their future into their own hands, stop drowning in mortgage debt, and begin on the road to a more viable financial future.