Number of Foreclosures Rose 30% in February

[Mar 12, 2009.]

 

As the government continues to work to help struggling homeowners, many are falling through the foreclosure cracks. In February foreclosure filings rose 30% from a year earlier as the economy continued to struggle.

There were 290,631 homes that were either seized by their mortgage lender or received a notice of default or auction, according RealtyTrac. For those people the housing plan is unlikely to change their situation.

President Barack Obama’s administration is attempting to help homeowners who are underwater on their mortgages or can’t afford to pay their homes. Declining home values and rising unemployment together have made it tough for many people to keep up payments on their home loans.

So what’s happened with all the homes that have been previously foreclosed upon? Apparently mortgage lenders are sitting on about 700,000 foreclosed homes that are not being offered for sale, according to Bloomberg. That could be because lenders are waiting to see what happens with the government’s housing plan.

Meanwhile, the blood-letting in the housing market is expected to continue. “Many elements are lined up to suggest we’ll have more foreclosure activity in the future, maybe an all-time high,” Rick Sharga, executive vice president for marketing for RealtyTrac, told Bloomberg.

Homeowners in California had the most foreclosure filings, followed by Florida and Arizona. About 8.3 million borrowers are underwater on their mortgages, owing more than the value of their home. If home prices drop another 5%, another 2.2 million homeowners will be underwater, according to data from First American CoreLogic.

So here’s the deal to avoid foreclosure:

—Homeowners must communicate with mortgage lenders. Avoiding letters and phone calls will only make things worse.

—Avoid getting scammed by foreclosure prevention firms that promise the moon and the stars. It’s best to deal directly with the mortgage lender or credit counseling agency approved by the U.S. Department of Housing and Urban Development (HUD).

—If someone offers to help, it’s important for homeowners not to sign any legal documents without reading them carefully and getting the advice of a reputable attorney.

—People who don’t have enough income for all their bills should pay on their mortgage first, then prioritize their other bills.

Hopefully, continuing to make mortgage payments can buy people enough time until they can be helped by the government’s plan to help struggling homeowners.

 

 

About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.