The Foreclosure Fiasco
One of the leading components of the financial meltdown in the past couple of years has been the mortgage crisis. Unprecedented numbers of Americans have been upside down in their mortgages with many losing their homes. Many more have had to seek out a way to get out of a bad situation. Loan modifications and deed in lieu’s have satisfied the needs of many of these homeowners who have had nowhere else to turn. Loan modifications have often made an unaffordable mortgage; affordable.
Still, after record foreclosure rates in the last couple of years, the trend does not seem to be abating. The sheer size of the problem is part of the problem. Some studies show some easing, but those numbers may be misleading.
Many States still Suffer High Foreclosure Rates
According to RealtyTrac Trendcenter, there were 2,178,073 in November of 2010. The statistics in the report also showed that the leading states with new foreclosure activity were California, Florida, Michigan, Georgia, Texas, Illinois, Nevada, Ohio, Arizona and Pennsylvania, in that order. The other telling statistic was that one in every 492 housing units received a foreclosure notice in November.
The RealtyTrac numbers remain staggering, although they report a reduction in foreclosures in some states. Many numbers have been skewed because of the “robo-signing scandal.” This meant that a number of lenders and servicers had to review their processes and stop many foreclosures during that review. The result was a drop in foreclosures processed.
Our Economy could be Worse
As bad as the current economy seems, many financial experts believe that the actions of the Federal Reserve in 2008 helped the U.S. and Europe avoid a true depression. The Fed’s liquidity programs sought to inject liquidity into a frozen credit market. Those financial experts believe that the government downplayed the seriousness of the situation at the time and we in the U.S. were literally bankrupt. It may be hard to believe, in light of the recent economy that things could be a whole lot worse, but that may be the case.
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