FORECLOSURES–BANKS BEST INTERESTS??

What is the government doing to stop/slow them

down?  While the admininstration continues to grapple with the enormity of the housing crisis vis a vis foreclosures, lenders are not helping people stay in their homes by modifying their loans.  Some lending institutions feel that letting the home go into foreclosure is actually cheaper for them.  Out of the 1.5 million foreclosures, a mere 200,000 loans have been modified….less than 3%.  The banks are of the mind that even if they modify a loan there’s a chance that the homeowner will eventually default even with a smaller payment.  (Washington Post, July 28, 2009 by Renae Merle)

The unemployment rate is contributing to that scenario as well.  People are struggling to stay in their homes, but when they lose their job(s), they don’t have a choice but to walk away.  The news was good for June that the real estate market has ticked up, however, we still have a long way to go.  The foreclosures will continue to drive down value and until we can clear the inventory, we have to play the waiting game.  In the end, I don’t think anyone knows how this will turn out.