National Recovery Doubtful if Foreclosure Problem Worsens

by on Foreclosure Crisis, Foreclosure Help, Stop Foreclosures

Many experts believe that the key to solving the deepening economic problem is to stabilize the housing market and finally put an end to increasing foreclosures.

The statement is easier said than done. Whittemore School of Business and Economics Professor Rose Gittell says that the housing crisis has created a vicious cycle that affects all sectors of the economy – employees in the construction business, real estate brokers, bankers, mortgage companies, homeowners and whole neighborhoods. The crisis has brought about unemployment and this could very well translate to a lot more foreclosed homes in the future.

The Federal Deposit Insurance Corporation (FDIC) estimates that over 4.4 million borrowers will default on their mortgages by the end of 2009. In New Hampshire alone, home permits have dropped from 6,439 in 2002 to 3,094 in 2007. Figures also show 81 pending foreclosures in Strafford County, 100 in York County, and 237 in Rockingham County.

However, Jim Mills, a real estate expert says that the housing crisis has been compounded by irresponsible media reports which tend to sensationalize the problem. Though it is true that there are homeowners facing foreclosure, on a more general scale, the regional market is still strong.

Still, the facts state that buying a house has become harder during these times, especially for those with problematic credit histories and no down payment. Banks and investors are also unwilling to consider projects with the smallest hints of a risk.

Even mortgage company giants and now government-controlled Fannie Mae and Freddie Mac have not been spared by the crisis. Just last Thursday, the duo announced that they were going to suspend foreclosure sales on over 16,000 homes nationwide starting November 26 this year until January 9, 2009.

According to Gittell, President- elect Barrack Obama should focus his foreclosure program on homeowners themselves. Since his campaign, Obama has been saying that directly helping homeowners would be his priority. A big part of his policies include loan modification and a 90-day foreclosure moratorium for responsible homeowners.