November 22, 2011
By John Clark
Foreclosures on U.S. houses with delinquent mortgages have doubled since 2010, as more and more consumers are considering filing for bankruptcy to help solve their mortgage woes.
According to a report from MSN Money, Fitch Ratings recently announced that banks have been much more aggressive in foreclosing on homes owned by people who have fallen behind on their mortgage payments.
The new statistics show that home foreclosure on overdue mortgage loans has reached the lofty height of 10 percent each month. This figure is almost double the low mark reached last year, although it has grown closer to the typical 10 to 14 percent mark that has been the norm in the past decade.
Sources indicate that the rise in home foreclosures is simply a return to the traditional norm, rather than a dramatic change in banks’ policies towards foreclosure.
Experts claim that the foreclosure rate dipped significantly in 2010 because consumer advocates observed that banks had committed a number of errors in the flurry of home foreclosures that struck after 2008.
One of the most controversial practices involved so-called “robo-signatures,” which involved bank employees approving home foreclosures without carefully looking at each individual case.
In addition to the lax policies surrounding foreclosure approval procedures, banks also allegedly foreclosed on homes without going through the necessary legal steps, which are designed to protect homeowners from mistakes or errors by banks.
Of course, despite the rise in foreclosures, which will likely push more Americans to file Chapter 13 bankruptcy in order to save their homes, there may be good news on the horizon.
According to Fitch Ratings, the increase in home foreclosures will make more homes available on the real estate market. This increase in supply will probably lower the cost of many houses, although this price shift likely won’t be seen for at least a year.
Of course, current homeowners and real estate brokers won’t be pleased by this news, but first-time home buyers will be thrilled to learn that home prices may soon be dropping.
In the meantime, homeowners who are facing foreclosure must find other methods, such as filing bankruptcy, to defeat lenders’ attempts to kick them out of their homes.