Housing and Foreclosure Challenges Continue

Oct 04

Housing and Foreclosure Challenges Continue

Foreclosure rates are still climbing across the country, and some areas are having much more difficulty than others. Some of the largest housing bubble regions (e.g. California) are seeing home values drop so much that homeowners cannot refinance their homes, even with excellent credit and documented income. Some folks are simply riding out the tighter credit and lending situation and working very hard to make payments on a large mortgage. Some lenders, including Countrywide, are apparently working equally hard to help consumers stay in their homes and handle the mortgage loan. As of last week Countrywide says they’ve helped over 35,000 homeowners with arrangments such as modified loan terms, repayment plans, refinancing and even postponement of payments. Yet it’s still a political issue, and even the Democrats are split on ways to solve the mortgage problems Americans face. Legislators are coming up with many ideas for a bailout, but a lot of people think that’s not such a good idea. No matter what argument one takes however, the fact remains that there are people struggling to keep their homes and continue payments on their mortgages. To highlight the problem and give homeowers some ideas, we even addressed the issue on SushiMoney with Avoiding Foreclosure: What You Can Do.

When are we going to be out of this mess? Probably not for a couple of years. Most experts indicate that foreclosures may rise into early 2008, with more than 500,000 foreclosures adding to an already heavy supply of homes for sale across the nation. I’ve read reports that homes will hit a 12-month supply for sale next year, but then things should start getting better. The caveat is that many economists are looking at meager economic growth over the next 6-12 months. Couple that with potential reduced consumer spending and it raises some concens for overall GDP, corporate profits and maybe even stock market fundamentals. But I’m an optimist… I think economic growth and consumer spending will hang in there, while we work through mortgage issues and the glut of homes for sale. How long will that be? Good question. MSNBC also reviewed some foreclosure prevention strategies with data on specific markets, and a humorous look at this issue.

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