More Homes Lost to Rising Foreclosures

Copyright © Kimberly Flores, Rich Mom
http://www.mustang-rock.com

With interest rates continuing to rise, the number of borrowers who face losing their homes in foreclosure sales is increasing. Many homeowners are forced to seek pre-foreclosure options rather than waiting for the repo officers, but they still face substantial financial losses and are naturally distressed by the loss of their homes.

Why are foreclosures on the rise? Over the past few years, the booming housing market has encouraged people to become homeowners. Rising house prices convinced them that they would always be able to sell at a profit. For this reason, many sought out lenders who would offer them sub-prime rates for properties they could not otherwise have afforded. Adjustable rate mortgages meant lenders offered better deals in the immediate term, but with decreased long-term security. Now interest rate increases have increased the monthly cost of some sub-prime loans by as much as fifty percent, leaving distressed homeowners unable to keep up.

Facing foreclosure, many homeowners have opted to undertake pre-foreclosure sales, reclaiming at least some of the value of their homes, but the slowing housing market is making this increasingly difficult. Others have sought out further loans from lenders willing to help them keep the repo officers at bay, but these loans also tend to be at sub-prime rates, potentially worsening the spiral of debt. What can distressed homeowners do? The search is on for responsible lenders offering deals which can enable homeowners to remain in their properties whilst they pay off their debts over a longer timescale.

About the Author:
Kimberly Flores,
The Rich Mom Foreclosure Investor offers you resources to get your business started.
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