Despite some initial signs that subprime foreclosures were near a plateau, the combination of severe weakening in the economy, continued decline in home prices, steady increase in delinquencies, particularly in the prime mortgage space, ensure that foreclosure numbers, absent more dramatic intervention, will march steadily higher.
While loan modifications and similar interventions (such as the Hope for Homeowners FHA refinancing program) could help to reduce the march of foreclosures, the proliferation of generally timid loan mod programs with confusing loan features raises significant doubt as to whether the current loan mod momentum is sufficient to reduce foreclosures materially. Further, though mortgage walkaways have been important, the disease hasn’t infected the general population. However, should the downward spiral in home prices, neighborhood condition and equity deterioration continue, more and more mainstream borrowers are likely to walk away from their homes. Thus far, the population of subprime borrowers in the US is relatively small. However, the severe recession that appears more and more likely, coupled with the collapse of confidence in housing and resultant foreclosures and the impact on credit scores, risks transforming the US into a subprime society.
That is, the deeper the foreclosure crisis penetrates into the gene pool, the greater the percentage of American consumers with impaired credit, and therefore limited ability to access credit. Therefore, foreclosures aren’t only a housing-related phenomenon and should foreclosures spread, a large percentage of of the population could suffer impaired credit, which in turn would hurt credit availability.
There is good happening even if it is just a start and for a specific people. Here in Ocala/Marion County we have been given help with lower income housing. Through Marion County SHIP or Community Services Department the Federal Government has given money to help the lower income buy homes. Of course there are guidelines. If you fall within 1 person earning under $27,350, you can buy a brand new home, bank owned or REO, with down payment assistance. The government has given Marion County 6 million and they are still working out the kniks, so you have time to apply. Go to www.Marioncountyfl.org click on departments, community resourse bureau, community service. You then can call them or go to form and print out application, fill it out and take to their office.
If you have any questions call me 352-266-2637.