I heard on the evening news a few nights ago that the foreclosure rate is still increasing as much as 35% in the first quarter of this year!
What is the reason for all these foreclosures? Is it from people out of work or merely walking away from properties that are worth so little compared to what is owed that they don't think they'll ever have any equity in their home? Folks who are just having a hard time making their mortgage payment due to job loss or pay cuts and really want to keep their homes should be able to get a break. I know some modification help is out there but not sure if the criteria is such that these folks can 'qualify'.
There must be better solutions than having one property after another be foreclosed on. Although I know that servicing would be a lot harder, borrowers should be able to send in what they can, even if it is only a few hundred dollars and the mortgage company hold that payment and future payments until they have enough for the full mortgage payment. Then apply it to the loan. This would take longer for the loan to be paid off, but at least folks could hold on to their homes through the hard times. A simple solution to a horrible problem. This probably won't ever be adopted though because those lenders or investors are counting on receiving those full payments each and every month as the Note guarantees....but otherwise this sounds like a good plan to help the homeowners in trouble.
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