WLCCI

Foreclosures Sales

Recent statistics show foreclosures are on the increase. As a matter of fact, the foreclosure rate is higher now than at any times since 1929. Unfortunately, this upward trend will probably continue because the stigma attached to bad credit and bankruptcy is not as great today as it once was.

Foreclosures occur for two reasons: either the owners do not want their properties or they cannot afford them. In some larger metropolitan areas, like New York and Los Angeles, declining neighborhoods have caused some owners to just walk away and abandon their properties. These properties are then repossessed through mortgage or tax foreclosures. The most common reason that properties are lost through foreclosure, though, is that the owner cannot afford the monthly payments because of divorce or loss of employment.

Adjustable rate mortgages (A.R.M.s), which were designed to help people buy homes by providing lower monthly payments, have created their own set of problems. When people borrow money with adjustable rate mortgages they have no idea what will happen to their future monthly payments. Since some of these mortgages were originated four to five years ago, there has been a consistent increase in the monthly payments. Home owners by the thousands have lost properties through foreclosure because of their inability to make these higher and higher payments.

Many people think that lenders like foreclosure because the lenders are going to get back a property that is potentially worth more than the amount owed. As a matter of fact, nothing could be further from the truth. Lenders will frequently go out of the way to avoid a foreclosure action.