According to an article in Reuters, America’s high unemployment rate is causing a surge in the number of foreclosures and bankruptcy filings nationwide.
The article said:
“Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July…By comparison, 4.89 percent of mortgages were 30 days past due in August 2008…The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months.”
And many of these delinquencies will inevitably become foreclosures. Nationwide the unemployment rates is well over 9 percent and in some states it has reached 10 percent or more. Those homeowners who have faced job losses no longer can afford to pay their mortgage and unfortunately there is no national plan in place to prevent these homeowners from succumbing to foreclosure.
Even with the voluntary mortgage modification plan, many homeowners are unable to avoid foreclosure . Mortgage lenders are slow to respond to inquiries about modifications and many homeowners don’t qualify after they apply. The only way to avoid foreclosure in most cases is to file bankruptcy. Currently it is the only legal way to stop foreclosure in its tracks. As a result many analysts predict that bankruptcy filings will skyrocket as more homeowners fight to save their home from foreclosure even as they hope for mortgage modifications. So far, bankruptcy filings have increased 35 percent since 2008.