Foreclosures Consequences
Foreclosures Consequences
Foreclosures Consequences
Because of foreclosures during the last recession, which took place between 2001 and 2003, approximately two million people got into unemployment, according to the Department of Labor. The regress at the beginning of this decade has affected the technology sector, while the terrorist attacks of 11 September 2001 have hit the transport industry. American economists have said that the U.S. economy was officially in recession from March to November 2001, but the repercussions were extended until 2003.
There is increasingly more evidence to prove that the U.S. goes through another period of recession. Those who borrowed in the first months of 2007 have greater difficulties to pay their fees, compared to those who have contracted loans in 2006, according to a report by investment bank Friedman Billings Ramsey.
It is expected that the number of U.S. foreclosed homes grow in the following period. During the third quarter of 2007, the number of foreclosed houses increased by over two times compared to the third quarter of 2006, to 446,726 houses nationwide, according to RealtyTray data.
A house out of 196 is foreclosed. Such data suggest that the number of Americans who could lose their home is greater than in the past, among those who are threatened falling people who have never thought that will ever experience problems with their mortgage payment, such as pharmacists or teachers.
In a study of the Global Insight analysis firm, approximately 1.4 million U.S. homes will enter next year in foreclosure, says USA Today. The value of real estate market could drop by 1,200 billion dollars, against the background of the increasing number of homes sold as foreclosures and of prices decrease.
The prices of houses will depreciate by an average of 7%, but the decline in California could reach up to 16%, as it is shown in the company analysis. Some of the buyers of homes have bet on loans associated with low interest rate. Mortgage loans, which have allowed buyers to pay only interest at a low rate for two years, have been too attractive to be missed.
It has been said that many people have used their homes as ATMs. Risks are multiple, according to officials of mortgage lenders. Many people consider that a further mortgage increase will destroy many financial situations. They can go to Mortgage Repair Center, one of the hundreds of credit consultants trying to help the owners of the foreclosed houses who are in a desperate situation.
Many people in their neighborhoods have not received help and some people have been forced to leave their dwellings. People who are in a difficult situation do not want to talk about it because they feel embarrassed, and therefore end up homeless.
Many Americans are not aware of the fact that non-payment of mortgages has negative effects on both others' welfare, and the national economy. Actually, the number of mortgages that will be recalculated represents only part of the economy of 14,000 billion dollars U.S.
However, the series of failures on Wall Street in recent months demonstrates that nobody is immune to a negative turn of the mortgage market.
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