Are You Behind on Your Mortgage?

Foreclosures Are Becoming Worse Than You Think

The recent foreclosure flood is worse than some people realize, because foreclosures are 112% higher than they were before the bottoming of the housing market. When you consider how many people have mortgages they can't afford, but haven't been foreclosed on, the number can be mind-boggling. According to the most recent statistics, 1 out of 200 homes will be foreclosed on, and that is just an average. Some areas of the country are experiencing a foreclosure rate of 30%, which is almost 1 out of 3.

The problem with foreclosures is that they lower the value of the other homes in the neighborhood and area by as much as $250,000 depending on the area. The reason for this is that not only do they become run-down, but they also sell for pennies on the dollar when they finally sell and this lowers the appraisal comp values on the homes in the neighborhood. This has a significant effect on your home when you are trying to re-finance or sell it.

Statistics also show that over half of Americans owe more than they take in each month. This is like a stack of cards that can't go on indefinitely. Because of high credit card debts and personal loans, they were able to borrow on income raises that lenders perceived would happen, but didn't. In the highly competitive credit markets, when credit cards and personal loans were free flowing, many of these borrowers have been sitting on time bombs for much longer than the current recession.

If you find yourself without a job or being forced to take a lower paying job, you are probably playing the game of trying to get by day to day and not making much progress on paying down unsecured debt. Unfortunately, what starts to happen is that the house payment becomes the last thing you pay since your home value isn't what it used to be and it is easier to pay the smaller, unsecured debts to keep the bill collectors from calling and keep the credit limits open.

This way of thinking is what has gotten many borrowers in trouble and have caused many of the recent foreclosures. The fact that over half of America is not taking in enough money each month to pay their bills is significant when you consider that many of them are unable to make their mortgage payments on time, and are barely avoiding foreclosure, until it catches up with them or they give up and file bankruptcy.

Loan modification specialists can help relieve the stress and work out ways to keep your home out of foreclosure. There are a number of options that loan modification specialists can help with, including reducing principle balances, lowering the interest rates for more affordable payments, or deferring payments that are in arrears to the end of your loan. Don't ruin your credit by facing a foreclosure and the stress it causes. Bankruptcy laws have changed it from becoming a forgiving option. Your best bet is to contact a loan modification specialist that can work with your lender, lower your monthly payments, or arrange a short sale of your property, to save your credit and your sanity.