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Real Estate News: The Foreclosure Epidemic (Pt. 1) An Intro To Foreclosures History
Posted on 07. Feb, 2010 by default in Blog, News
FORECLOSURE
Real Estate News: The Foreclosure Epidemic (Pt. 1)
AN INTRODUCTION TO FORECLOSURE’S HISTORY
BY: AMERICAN FORECLOSURE ASSOCIATION (AFA) | @afahelps
To learn more about how to stop foreclosure Solano County, check out American Foreclosure Association (AFA)’s FREE eBook called, The 10 Fastest Ways To Stop Foreclosure In Less Than 7 Days
The current cyclic foreclosure epidemic of subprime mortgages in the United States is widespread and severe. Unfortunately, the primary victims are the hardworking families who, instead of enjoying homeownership benefits, are now struggling to maintain their homes. The historic foreclosure epidemic was a result of poor lending practices and corrupt underwriting practices which further restricted consumer access to credit that many of them used to cure their debts. Consequently, the credit crunch then followed as a result of reckless lending and lack of adequate regulation in the mortgage industry. The mortgage subprime crisis of 2008 was not only an economic disaster, but also created significant challenges to the traditional rules and regulations of property law. By far, banks historically have contributed significantly to the mortgage crisis by marketing mortgages through deceptive and unfair practices (Ambrose et al, 2015).
Many consumers are enticed into taking high-priced loans which are unaffordable and then these fraudulent banks pass the risk to investors after fooling them that they are “safe investments” when they are actually non-performing promissory notes from Borrowers who made promises that they now cannot usually afford to keep. These practices highly violate the basic requirement of consumer protection and statutes of securities regulations. Also, most United States banks interfere with the process of mortgage securitization by creating a privatized system of mortgage registration (also called MERS) that significantly undermines publicity and clarity of the property titles. Because of the lax record keeping practices and securitization procedures, this is then one of many deceptive ways that banks can and have grossly undermine property recording systems.
As a result of these fraudulent activities amid many others, local and national foreclosure rates have risen massively in the United States more than it had during the Great Depression. With falling house prices, tightening standards of lending rates, rising unemployment, and ever resetting interest rates, the foreclosure crisis has substantially gone higher. Statistically, over a million homes have been repossessed since 2010. Although the economic conditions play a vital role, most data shows that banks' negligence and Wall Street’s greed and covert operations purely have been the historic motivating factors that led to the onset of the foreclosure epidemic by abusing loan terms (Duarte & McManus, 2011).
Is History Now Repeating Itself?
With the onset of this current Coronavirus (COVID-19) pandemic, homeowners are frantically facing foreclosure in droves. As we continue to help homeowners facing foreclosure to avoid the harsh reality of homelessness or losing their home to foreclosure, one of the main questions we are faced with is if this cycle will be “as bad as” the 2008 crash where over 9 million Americans were facing foreclosure.
First, you must understand that foreclosure inevitably comes when economic or situational hardships turn into financial hardship for any homeowner or family. The 2008 crash was a subprime mortgage issue that crashed and as a result, burned a lot of homeowners and hardworking families out of one of their greatest sense of security, their home. Now, although there are definitely some residual effects of that crash, the onset of the current foreclosure epidemic is not cut from the same cloth, per say. Instead of a subprime mortgage issue, we are currently in the midst of a global economic issue that is beyond the individual homeowners control. The resulting foreclosure problem is part of the domino effect, not residual effect. Now, homeowner’s uncertainty comes from not knowing where the bottom will be, how rapid the decline will be, and ultimately, how far they will fall.
For More Information On How To Stop Foreclosure
Want to know how to permanently stop foreclosure and super-charge your road to recovery and financial freedom? Read Part 2 of our series: Real Estate News: Understanding The Process and Effects of Foreclosure, for an in-depth breakdown of what the process is so you know what your options may be is vital because it is directly connected to your ability to permanently and legally save your home from foreclosure.
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