Foreclosures and Default Payments Went Higher

by Donald Hanz on Foreclosures

According to Mortgage Bankers Association, default payments and foreclosure rates have risen in 3rd quarter of this year and it threatens to soar while the downturn also increased the number of unemployed people.

Due to the growing number of jobless people, default payments in mortgage as well as foreclosures will increase in 2009 according to the trade group.

Chief Economist and Senior Vice President for research and economics Jay Brinkmann said that they have never seen the house market grew worse as compared to previous recessions.

Furthermore, it was estimated that 2.2 million house mortgages will begin the process of filing for foreclosure. Part of the loans which ended up in foreclosure increased to 2.97 percent according to trade group.

The Labor Department said that employers in the U.S. cut down jobs with an estimate of 533,000 last month. Economics Strategist Millan Mulraine of TD Securities stated that the market is not doing very good as the unemployment rate increases and the costs of the homes are decreasing.

In addition, most companies are having a hard time adjusting the mortgage terms in order to avoid foreclosure, thus an increase in loans with a past due of more than 90 days were recorded.

Ohio, Indiana, Rhode Island, Michigan, Illinois, Florida, California, Nevada and Arizona are the only 9 states that have foreclosures over the nationwide average.

The stabilization of home costs may entice potential buyers who have second thoughts purchasing a house. Buying mortgage bonds is a recent plan by the government as it helped the rates of loans reduced by five and a half percent.

The U.S. Treasury may also offer set mortgages payable in 30 years with only four and a half percent interest through Fannie Mae and Freddie Mac, 2 of the main mortgage financial sources in the U.S.

Hopefully, such programs may help the distressed homeowners to catch up on their default loans or to possibly modify it in order to prevent foreclosures.