Foreclosures hurt everyone involved in the process. From the home owners that lose their homes, to the community affected by the abandoned properties, to the lenders that not only lose money on the deal – but now have to focus more of their resources on those foreclosed homes.
In early March, the temporary bank moratorium holding back the next wave of foreclosures was lifted. The moratorium was in effect until the Obama administration announced the government plans in how it planned on stemming more foreclosures from occurring. Once that plan was launched, the banks needed to return to regular foreclosure procedures in order to provide the next level of help.
The Next Step
The next step is being provided by a whole network of systems established by the government. From closing bankruptcy court loopholes to allow the legal system to negotiate new mortgage terms, to the Feds providing $25 Billion in state fiscal relief to prevent new property tax increases, change is underway. Banks are getting into the action by working more closely with homeowners to refinance mortgages into lower cost and more stable loans.
In reality, banks rather keep families in their homes then become property owners as “real estate” is not part of the average banks mission statement. Lenders are now in the position of working to keep homeowners situated in their abodes because they banks cannot handle anymore negative debt on their books. Regardless of what the motivation is, homeowners in a precarious position will find banks open to reworking mortgages to keep people in their homes.
The stigma around foreclosures has been slightly lifted because so many people are experiencing the action. Because of that, communication has improved among homeowners and banks and banks are more willing to work out compromises with those facing foreclosure. The key for consumers to take advantage of the banks openness is to speak to your representative early on regarding your financial situation.