Thousands of Washington homeowners are now facing the loss of their home, and looking to avoid foreclosure. Whether they are behind on their mortgages, in financial hardships, recently unemployed, or now owing more than their home is worth ("underwater"), borrowers' best bet is likely a loan modification. Now more than ever, Washington homeowners need to learn the best options available to them in order to avoid foreclosure, save their home, and afford to stay there.
According to the Department of Housing and Urban Development's recent news release, "more than 200,000 borrowers have received offers for trial loan modifications... (and) tens of thousands of refinances and trial modifications are under way." As reported by RealtyTrak, 1.9 million notices for foreclosure default, auction sale and bank repossessions were reported on more than 1.5 million properties in the first half of 2009. In the first six months of '09, 1.2%of all U.S. housing units (1/84) had filed at least one foreclosure.
With foreclosures on the rise, distressed Washington homeowners are seeking out the best way to save their homes. While government plans have fallen far short of offering true help to homeowners, a growing number of fraudulant and scrupulous companies have made avoiding foreclosure with loan modification even harder.
Recently, the Federal Trade Commission announced "Operation Loan Lies," an effort by 25 federal and state agencies to close down firms deceptively selling foreclosure rescue and mortgage-modification services. The government has urged homeowners seeking out loan modification to find a certified servicer offering a free loan modification evaluation and services. Empowering themselves with information and understanding all the available options, is the surest way for homeowners to acquire a successful modification.
AVOID FORECLOSURE WASHINGTON
As the mortgage crisis spreads, hitting new heights every month, borrowers with good credit now make up the largest share of foreclosures. With job losses and pay cuts simultaneously on the rise, a record 12 percent of homeowners were behind on their payments in the first quarter of 2009; a trend in which is predicted to continue well into the coming years. In the exploding housing crisis, millions of borrowers across Washington are now struggling to get a loan modification in hopes to avoid foreclosure.
Much of the blame for the current recession can be placed upon risky adjustable-rate loans made to borrowers with bad credit to begin with. Nearly half of all sub-prime ARMs today are past due or in foreclosure, with no end in sight for homeowners misled into inappropriate or unscrupulous loans. [Seattle Times, 5/28/2009]
Experts believe this trend will continue to spread throughout the country as unemployment mounts and borrowers with good credit face skyrocketing foreclosures. The number of borrowers now receiving unemployment benefits reached the highest on record this last May at 6.78 million, and this number continues to rise. Economists are saying this number could reach double digits, and will coincidentally add to the ailing economy and housing market.
In over half of the largest U.S. cities, home prices are due to fall through the first quarter of 2011 while unemployment and foreclosures rise. According to recent reports, 30 out of the 50 biggest metropolitan areas will have a 75% likelihood of house values falling through March 31, 2011, while Washington has shown a 92 percent chance of lower housing prices. Affordability is no longer the driving issue in the housing market, as home values continue to fall, all while a growing number of homeowners struggle to avoid foreclosure. While unemployment and foreclosures rise steadily, the value of houses continue to fall across America, leaving millions of homeowners at greater risk of losing their homes. [Forbes, 5/28/2009]
With unrelenting unemployment rise, borrowers with good credit now unable to make their payments due to job loss, and other hardships, continue to escalate the number of foreclosures around the country. Thankfully, more and more borrowers with good credit and looking to avoid foreclosure now qualify for a number of programs and options allowing them to save their home. Included in recent changes to the president's program, borrowers are now allowed to use unemployment benefits as a source of income for a Loan Modification.
The majority of Washington homeowners now qualify for hundreds of dollars in monthly savings with a loan modification thanks to President Obama's "Making Home Affordable" plan. Thanks to the HAMP program, a homeowner’s mortgage payment cannot exceed 31% of their gross income, and because most home loans exceed 31%, the majority of borrowers are eligible for assistance.