The U.S. recession and housing crisis of 2007-08 took a real toll on the mortgage market. Some consumers quickly moved away from risky mortgages in lieu of more favorable deals, but many were stuck facing foreclosure.
Regardless of the exact scenario, it is safe to say the entire mortgage industry has taken a hit since then. Evidence of this can be seen in the fact that U.S. mortgage foreclosures recently fell to their lowest levels in the past 10 years. Although general consumer reluctance toward mortgages is one of the driving factors, it is not the only thing helping to curb mortgage foreclosures in our country.
New opportunities in government assistance
The U.S. government offers numerous resources to homeowners who are struggling to meet their monthly mortgage payments and avoid foreclosure. The U.S. Treasury Department has teamed up with the U.S. Department of Housing and Urban Development to pioneer the Making Home Affordable Program. Also known as the MHA program, this initiative provides various loan modifications, plan alternatives and specialty refinancing programs to homeowners of all types.
Common pre-foreclosure services
In some cases, pre-foreclosure services can help you avoid mortgage trouble. Short-sale preparation, rental management and even property inspections can go a long way in making your foreclosure more bearable for everyone involved.
Some of the most prolific financial institutions currently offer rental options for those who are facing foreclosure. These are usually made available through a deed-for-lease or mortgage-to-lease program. In this case, the homeowner can avoid the pitfalls of property foreclosure simply by handing over the deed to their house.
During a short sale, the original lender, which is usually a bank or other financial institution, must agree to accept less than the remaining balance of the original loan. Although banks can and often do decline these terms, there are some situations where a short sale is justifiable for all parties.
Optimism about the future of mortgages
While declining mortgage foreclosures is a huge step in the right direction to restoring the U.S. housing market, it is not the only metric that has industry analysts buzzing. The overall number of delinquent mortgage payments among U.S. homeowners has seen a 10-year low, too. Serious delinquencies have also declined over the past year.
Economists are optimistic these numbers will drop even further as the U.S. economy continues to improve, but there are some regional discrepancies. States in the Northeast, such as New York and New Jersey, tend to see elevated delinquency rates in general. Other states with above-average delinquencies include Alaska, Louisiana and Wyoming.
As renewed confidence begins to hit our nation's housing market and as more Americans regain their own financial stability, the number of mortgage foreclosures is sure to drop even further in the coming years. Spurred on by advances in green construction, modern smart homes and sustainability, it is safe to say we are on the cusp of a full economic recovery sooner rather than later.
