Millions of homeowners are currently behind on payments or facing foreclosure. As
early as 2006, after years of escalating property values, home prices began to decline.
Suddenly, homeowners who had counted on a continuing increase in property values
found themselves in markets where their home values started decreasing. They couldn’t
sell, refinance or cash-out the equity in their homes the way they might have planned.
As homeowners stopped paying their mortgages, the banks that counted on those payments
began to flounder. With many banks in a state of financial difficulty and many homeowners
struggling to make their mortgage payments, the effects were soon felt around the
globe.
Lenders
The country didn’t end up in a housing crisis without reason. The industry’s lending
practices played a huge part in eroding one of the major pillars of the American
economy. Qualifying for a mortgage and buying a home used to be one of the biggest
challenges and accomplishments in the lives of most Americans, but by the middle
of the current decade it was almost as easy as filling out a form. Lenders were
soon hit hard with huge losses on bad mortgages, a drying up of capital to make
additional loans and the disintegration of investor markets. Many lending institutions
that once employed thousands have gone out of business. Some filed for bankruptcy.
Tens of thousands of mortgage brokers and other mortgage service providers have
left the industry. Borrowers have been hurt even more. Many face foreclosure, while
others can’t afford their payments or owe more than their house is worth.
Borrowers
There’s been a lot of finger pointing when it comes to figuring out who is to blame
for the mortgage meltdown. Many homeowners don’t know whom to blame, except to say
they had little or no part in the debacle. The truth is, numerous parties had key
roles in the collapse of the real estate industry. Borrowers are among them. That’s
not to say that homeowners were the sole cause. Many borrowers were truly misled
and placed into dangerous loans. Others had a feeling that things were too good
to be true.
It was a great time for new homeowners in 2005: mortgage brokers competed aggressively
to offer the most attractive loans, barriers like sizable down payments didn’t seem
to matter any more and housing values were only going up. The sooner you became
an owner, the sooner you could start enjoying the benefits of rising property values.
Those escalating prices led to low-interest home equity loans that many used to
pay for remodeling, college tuition, vacations and new vehicles. Many of us took
advantage of looser lending standards. We overextended ourselves without really
understanding the consequences. Now, about one out of eight homeowners are behind
on their mortgage payments. There are solutions. The first step is to learn from
past mistakes. Many homeowners are facing debt and regret. A nagging little voice
told us that the two-bedroom house down the street wasn’t really worth half a million
dollars, but we bought into the delusion. As a consequence, many of us have seen
our credit scores suffer and we’ve put a lot of stress on ourselves and our families.
If you’re in this situation, you’re not alone. Let Mortgage Outreach help you immediately.
You can start by filling out the contact form on the
home page.
