When Facing Foreclosure
Feb 24th, 2008 @ 6:08 PM by Alden Smith
All it usually takes when facing foreclosure is to make a call to your mortgage lender and try to work something out with them. This first step, if taken correctly, will stall the action taken towards losing a home. Many people today, though, are choosing to simply walk away. It is a fact of life – the home is no longer worth what it is paid for. Let alone any increase in value or equity. What have people got to lose? It seems to be the attitude of many home owners.
Roper Public Affairs, a market research firm, and Freddie Mac, a major purchaser of existing mortgages, says that that one phone call is all it takes. Don’t wait for them to call you. This doesn’t put you in very good light, even though some lenders are making the effort.
An increasing proportion (44 percent) of delinquent borrowers knows that there are housing counselors they can talk with about their mortgage-related problems, according to the recent survey by Roper. Although this is a good sign of people beginning to work with lenders, it also shows by some 56% that many are unaware of the help that they can get. Freddie Mac alone now helps an average of 1,000 troubled borrowers each week avoid foreclosure. they do so through forbearance, or delaying of action or reduction of payments.
Surprisingly, high end luxury homes are increasing in value. Homes costing $5 million or more – out of the reach of most of the population, had increased by 31% in value during 1st Q last year. Buyers of these luxury homes are buyers are wealthy foreign buyers from Asia and Europe looking for an opportunity to capitalize on the weak U.S. dollar. Although this has traditionally been a European thing, new buyers are increasingly from Brazil, Russia, India and China. You have to wonder how long it will be before everything is owned in America by rich foreign investors and entrepreneurs.
This seems to be the trend right now. I have read rumors of many wealthy investors that are buying up foreclosure property, and it doesn’t surprise me. The first thing to fall in a downturn is housing, but it has always traditionally been the first thing to rise. If one has the money to invest wisely, this could be a good way to go right now.