Forestalling Foreclosures – Is There a Solution to This Regional and National Problem?
September 21, 2007
Current mortgage foreclosure statistics are harsh. Nationally, delinquency rates for first mortgages rose to 3.98 percent in June from 3.56 in April and a low of 3.08 in July 2005. Closer to home, last year the Massachusetts Land Bank recorded a record 22,000 foreclosure notices. Statewide, foreclosures were up 47 percent in March, compared to the same month last year.
As foreclosures have increased in Massachusetts, the Attorney General has seen an increase in unfair and deceptive foreclosure rescue transactions. These typically involve professionals who offer to assist homeowners facing foreclosure by convincing them to sell their homes to straw purchasers. These purchasers then obtain mortgages on the properties and allow the former homeowners to continue living in their homes for a while under the promise that they will be able to repurchase their homes at a later date. This deceptive tactic causes the homeowners to loose their homes.
As Housing Booms a Problem Develops
Many factors contribute to an individual experiencing a real estate foreclosure. Although personal issues tend to be typical factors that cause mortgage default, recent overly optimistic mortgage borrowing seems to have compounded these factors and has culminated in a disastrous situation for many homeowners. Of the personal factors that tend to promulgate foreclosure, divorce, job loss, and illness tend to be often outside the homeowner’s control, while the mortgage amount and type tend to be within the borrower’s control, at least initially.
For most people, their home is their most valuable asset. As the real estate market boomed over the past decade, so did the equity in most homes, and thus people’s ability to borrow money from their home…
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by: Justin H. Dion, Esq.
September 17, 2007