Foreclosures rising with debt, job losses

Foreclosures on home mortgages are on the rise.

Nationally, foreclosures are up almost 40 percent, higher than in any quarter of last year. The numbers are even higher in the Midwest. Michigan and Ohio, hit by automotive-related job losses, together recorded over 45,000 mortgages entering some stage of foreclosure in the first quarter. Those are increases of 91 percent and 39 percent, respectively, compared with last year’s fourth quarter.

There are many reasons for the growing number of delinquencies, and there are suggestions that this foreclosure trend may soon worsen.

Layoffs, health care issues, increasing debt levels and rising interest rates all are major factors. In addition, a growing number of homeowners are relying on the adjustable rate mortgage trap, catching some people by surprise when their monthly payment rises.

As we have stated many time before, some of those ARM’s were offered with an initial three-year to five-year period in which the rate was fixed. At the end of that period the mortgages are being adjusted to prevailing rates, which upends borrowers causing them to get behind.

The increases in the recent foreclosures doesn’t even reflect a worst case scenario that could happen when the $2.7 trillion in adjustable rate mortgages are adjusted over the next 18 months. This could cause a “Perfect Storm” condition in Foreclosure. Home owners across the nation will be unwilling to pay the increased amount leaving them facing Foreclosure.

“Whatever options I have”

If you have a good payment history with your Mortgage Company, before the rate increase, we can help you. American Foreclosure Specialists can help you keep your home. We can negotiate with your Mortgage Company on your behalf allow you to stay in your home at a payment you can afford. We have proven strategies that will allow us to modify your Mortgage so that you are no longer have the “ARM” and now have a payment that will fit your budget.