Foreclosures in the Dallas-Fort Worth area rose again by 18 percent compared to last month’s foreclosure filings. But compared to last year’s foreclosure filings in the same month, the foreclosures increased by a whopping 37 percent. Many analysts believe that many foreclosures that were on hold at the end of 2009 are now being released causing the most recent rise in foreclosures. Also, many homeowners facing foreclosure who signed up for the 3-month trial HAMP foreclosure prevention program are now disqualifying for the permanent modifications and succumbing to foreclosure. But it is also noted that many of the new foreclosures continue to be driven job losses which have not abated in the past year. Many homeowners are facing job losses and are unable to work out reasonable settlements with mortgage servicers which is causing them to fail in their fight against foreclosure. It’s unfortunate that our legislators and those in the mortgage industry who are mostly responsible for our foreclosure crisis, fail to properly and quickly respond to the foreclosure crisis with adequate measure. The way the mortgage modification currently works, it will not be very effective in stopping this current wave of foreclosures. The HAMP program has failed because of a few things: 1) mortgage lenders are not required to participate, 2) most of the mortgage modifications are designed in a way that still make foreclosure inevitable for many homeowners, and 3) there are no adequate options for homeowners facing foreclosure who are unemployed.
If we want to adequately tackle the foreclosure crisis, we must create a forbearance policy for those homeowners who have lost their jobs. Since the average time a person remains unemployed during this recession is around 8 months to a year, we need a forbearance program that at least allows a homeowner to defer their mortgage payments for 12 months. If the mortgage industry and legislators are truly committed to stopping this foreclosure crisis, they will at least consider this option.