MS Foreclosure Rates Continue to Increase

Nationwide headlines are continued to be dominated by foreclosure news and the increasing rate of unemployment.  The first quarter of 2009 reported that nearly 6% of borrowers are already behind on their mortgage payments or are in the brink of foreclosure.  In comparison to a year ago, this number has doubled.  According to the Mortgage Bankers Association, it is very alarming to see that the rate of troubled homeowners have doubled in the past year.

In the month of April, there were more than 342,000 foreclosed properties in the US.  Of these, 96,500 of them were in California alone.  This data is according to a web-based company, RealtyTrac.  Reportedly more than 600,000 senior citizens are also either delinquent or have already been foreclosed on.  AARP reports that older Americans, the ones that have subprime first mortgages, are 17 times more likely to have their homes foreclosed than Americans, of the same age, having prime loans.

Subprime loans contribute a big factor in the number of foreclosures in a community.  This was illustrated in a recent study showing that areas which had large numbers of subprime loans also had increased numbers of foreclosure filings as well.  In states where there is a predominance of foreclosure news, subprime mortgages consist of as much as 50 percent of the cases.

Researchers tried to study other factors which could affect the number of foreclosures in an area.  They considered home value, race and income but arrived at a conclusion that subprime lending is the major factor for foreclosures.  Unemployment also added to the increase of foreclosure rates.  Many people simply do not have enough income to keep ahead on their mortgage payments.  That’s why MS Foreclosure and other areas as well are skyrocketing.  This fact has lead agencies such as the Federal Reserve Bank of Boston to take up the cause of unemployed homeowners and recommend for more lenient policies in their behalf.

The sad truth is that there will still be many more Americans that will be affected by foreclosure in the coming months. (Note: When doing your research online make sure to search for ‘forecloser‘ as well as it is a very common miss-spelling.)  The government is trying to assist with various policies and legislation, but it is unclear on what impact it will have.  The biggest drawback of such policy changes, is that they take many months to be approved and applied.  Until these plans have proven to be effective, we may have to brace ourselves for more foreclosure news to come in the future.