A Ray of hope
Foreclosures have proved themselves to be the most ravaging impacts of the global economic recession. However, the beginning of this year brought in the ray of good hope for San Diego real estate, what with the number of foreclosure filings (default notices, auction sale notices and bank repossessions) down by 10% compared to the end of last year. Nevertheless, compared to the beginning of last year, the filings are still about 18% higher. Early this year, the lenders repossessed about 66,777 homes. It is estimated that ever since the foreclosure crisis hit the country, around 1,081,395 homes have been foreclosed.
Moratorium for the prevention
The administration has taken several steps to ensure that the pressure of the foreclosure eases and it seems they are working too. One of the major reasons to help in easing up the pressure was the imposing of the foreclosure moratoriums by the mortgage companies such as Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) amongst several others all around the nation. Several of the lenders, private and public, have been opting of late for the foreclosure moratoriums, thanks to the efforts by the government, and it has been paying off well too.
Effect of the Moratoriums
In truth, moratoriums do help in postponing the act of foreclosure, thus giving the home owner a chance to mend up the circumstances. Ever since the government imposed the moratorium for the institutions in California, the foreclosure filings have seen a drop in number. Within a span of two months, the foreclosure filings fell from 101,724 to 56,954 last year, which is a decline by 44%.
However, it is supposed that the moratoriums imposed in California only required the lender to first speak to the home owner before issuing the foreclosure notice. Thus, this provided the home owners with the much required time for planning up the proceedings and funds. Nevertheless, after about three months, the foreclosures started mounting again for the inability of the home owners to pay up the required amount. Thus, there has been an increase in the number of foreclosure towards the end of last year and early this year, which amounted to 76,761.
The Home Loan Modification Plan
Another major moment is also starting to happen. The Office of Thrift Supervision (OTS) of the government has been asking the OTS-regulated institutions to let go of the foreclosures until the upcoming home-loan modification program has not been agreed and launched. This plan aims at devoting $50 billion towards the prevention of the foreclosures. It will help reduce the monthly payments for the home-owners that are at risk. This home loan modification program is a part of the TARP program or the Financial Stability Plan that was launched by the Obama administration.
Most of the banks and lending institutions are expected to put the foreclosure moratoriums in place, before the plan is launched in order to ease the home owner’s burden.
Keeping the Faith
With all the efforts and government plans being set up, it can be sincerely hoped that the situation of foreclosures will recover. Though the recovery will be slow, nevertheless, the ray of hope clings on for the hopeless home owners.
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