Crisis in Foreclosure Homes Still Evident

The number of foreclosure homes increased by more than five percent during the third quarter of 2009 when compared to the previous quarter.  The Making Home Affordable program of the federal government was unable to stop the rise in foreclosure filings in spite of its attempts to decrease the monthly payments of the homeowners who are experiencing financial hardships by making it easier for them to qualify for a loan modification.  It appears that the government program has been overwhelmed by the large number of layoffs.

There were almost 938,000 foreclosure homes during the period of July to September 2009, which is approximately 48,000 homes more than the preceding quarter.  If the statistics are extrapolated to the end of 2009, there would be a total of about 3.5 million foreclosure filings for the whole year, which is much larger than the 2.3 million filings recorded for 2008.

The primary reason for the rise in the foreclosure rate, in the spite of many economists claiming that the recession is over, has been the unemployment rate, which has attained a record level of 9.8 percent for last the 26 years.  Moreover, experts have predicted that the unemployment rate will keep on rising until it will attain its highest level in the middle of 2010.  Mortgage lenders are trying to help by permitting the homeowners to be delayed by three to six months in their payments as they look for work.  Unfortunately, looking for work at a time when the unemployment rate has reached an all-time high is very tough.

The Obama Administration had recently claimed that its program had reached a milestone when more than half a million homeowners had their loans modified and monthly payments reduced.  However, the rise in the number of people defaulting on their loans has been much faster than the increase in the number of people getting loan modifications.

Mortgage lenders have been doing their share in minimizing the effects of the housing crisis by reducing the rate at which they are filing  foreclosures.  They have been attempting to assess whether homeowners would be eligible for the Making Home Affordable program of the government.  However, analysts believe that a large number of these homeowners would not be eligible and they predict that more forecloser homes will become available in 2010.  This is expected to pull down home market values further.  It has been observed that the financial problems being experienced by some of the borrowers are so massive that banks and lenders are finding it impossible to structure a loan modification plan that would fit their current income capacity. For more foreclosure news stop by http://www.bestforeclosurenews.com