subject: Real Cost of Foreclosure [print this page] One of the facts that you cannot deny is everything in this world has its own corresponding price you need to pay. When it comes to economics, cost has two types such as explicit and implicit costs. The cost of foreclosure can definitely affects all the people involve within the foreclosure.
Everyone can be affected either directly or indirectly. Everyone will have an equal share of burden. Even if you are the lending company, you still need to carry some burden like your barrower. This is the reason why awareness is needed for all people involve in the process of foreclosure.
Whether you are the homeowner, the investor or the lender, government as well as the whole society is affected by this crisis. You cannot deny the fact because you are already experiencing it right now.
The effect if this foreclosure crisis in the society should not be neglected by the authorities, because this can lead the whole society to unstable state. Neighborhoods will not be organized, thus the crime rate can increase if this problem will not be addressed quickly by the government.
If you are going to sum up families suffering from this crisis, you will find out that the whole society is already suffering from this crisis. Whether rich or poor, no matter what is your state, you are at risk of foreclosure.
Homeowners, needs to be aware that the main costs of foreclosure is explicitly affecting them are tax benefits as well as the equity that can lose when they end up in foreclosure. The emotional damage brought about by loss of property can also indirectly affects people who are involve in foreclosure crisis.
There are lots of indirect cost that might affect people facing foreclosure such as legal fees and fines. All the money that they have invested in property upgrade will all be useless.
Lender usually bear all the directly costs when the barrower failed to pay for their mortgageloan. If there is no new investor that is willing to place money to the property, the money that has been lent by the lender can caused huge financial damage to the company.
The longer the period it takes for a new investor to get the property, the higher the cost that it can bring to the lender. Right before the transfer of ownership, the lender needs to shoulder for the staff and collection costs, maintenance costs, insurance costs, marketing costs, appraisal costs, and legal costs.
On the other hand, the government is also affected and they need to put out large fund to help those homeowners suffering from this crisis. The Federal Housing Administration ensures all lenders that they will cover all the costs in the event that the barrower fails to meet their financial obligations. In this case, the government needs to place large amount of money in programs that can help people recover from foreclosure crisis.
Foreclosure crisis will surely costs everyone that is involve no matter who you are and where you are, you will surely be affected by this crisis.
