Housing Market Crisis Worsens as Foreclosures Remain Unabated

by Simon Lindsay on Foreclosure Crisis

The Mortgage Bankers Association (MBA) has released data showing that one per 10 homeowners in the U.S. has defaulted on his monthly mortgage payment or is in some form of foreclosure. The data, compiled for three months until September 30, 2008, only strengthens the fact that experts have known all along: preventing foreclosures is the best tool to achieve economic recovery.

It has been observed that Treasury Secretary Henry Paulson announces a new economic recovery program every now and again for almost a year because so far, no plan was successful enough to stop the surge of foreclosures in the country.

The continuous increased in foreclosures has been blamed for the losses in the financial industry and the drastic decline of market values.

CRL President Michael Calhoun points out that MBA’s data only highlighted the extent of the crisis in the housing market. He calls on the Bush Administration and the incoming Obama Administration to implement systematic programs designed to offer relief and solace to homeowners so they may not be forced to vacate their homes.
It is suggested that the Congress adopt a plan that will involve mortgage modification that will help thousands of homeowners quickly and effectively.

The Treasury Department is urged to implement a proposal by the Federal Deposit Insurance Corp. (FDIC) for the federal government to guarantee home loans that have been modified as a strategy to entice investors and loan servicers to enforce such changes.

Meanwhile, the Congress is also urged to implement an action that will lift the rule banning judicial modifications.

The MBA data showed that annual rate of foreclosures in the country reached 2.4 million as of September. With these figures, it is estimated that about 41 million homeowners who live near these distressed homes could experience a decline in home values.

Some states hardest hit by the foreclosure crisis are Arizona, California, Florida, Indiana, Illinois, Michigan, Ohio and Rhode Island.

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