Real Estate Foreclosures

Millions of real estate foreclosures have been listed across the country. Invariably these real estate foreclosures land up for auction sale in the courts. The increasing number of real estate foreclosures has raked up many issues as to why these are happening and what can be done to halt the relentless march of real estate foreclosures.

Nothing happens without a cause and the roots of real estate foreclosures go back to the time of the housing boom. Sub-prime mortgages made it easy for those with weak credit and low income to avail of loans and own a house of their own. There were two types who availed of these loans – those who genuinely wanted to own a house of their own and improve standard of living, and those who wanted to invest and speculate. The latter never dreamt that prices would tumble and real estate foreclosures become a fashion. The lenders of sub-prime loans were again of two kinds – those motivated by high commissions and those who motivated these agents because of their interest in investing in stocks and bonds. Loans were forced down the gullible borrower somehow so that an amount could be sanctioned. These activities triggered off real estate foreclosures.

Under normal circumstances real estate foreclosures stem from personal reasons like unemployment, divorce, death of earning member or medical bills. But that alone cannot account for the millions of real estate foreclosures that are grabbing headlines today.

The effect of real estate foreclosures is no longer confined within the court of the two players the borrower and lender. There are so many real estate foreclosures that the real estate market has overnight become a buyers market with more houses to sell than buyers. With more waiting in the sidelines to join real estate foreclosure listings, because of rise in interest, there seems to be no hope of the market stabilizing. The mortgage industry is finding itself saddled with non-performing houses that does not fetch cash but is a load. There is a cash crunch and with mortgage strings being tightened there is a further fall in buyers. Real estate foreclosures have ruined the housing industry – the builders, suppliers, home decorators, architect etc. The country is pockmarked with real estate foreclosure houses causing alarming rise in criminal activity. The story does not end here –abandoned houses have become breeding ground for mosquitoes and disease with overgrown gardens and stagnant pools.

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