Categorized | Residential

Foreclosures Still Affecting Housing Market

Please Share!

The residential real estate market in the United States continues to be haunted by the number of foreclosures on the market. While the market has benefitted from such factors as improving unemployment statistics and overall consumer confidence, the growing number of foreclosures is expected to keep home sales down.

 

Economists do not believe that home prices are likely to recover until the number of foreclosures declines significantly. Some lenders have recognized that the growing number of foreclosures is preventing recovery, and are making serious efforts to address the problem.

 

Bank of America is one of those lenders. They are starting a program that is designed to help delinquent homeowners avoid foreclosure on their home. The program is structure in a way that allows homeowners to return their title back to the bank, and then remain in their home by paying rent for up to three years. The rent would be at, or even below the current market rate.

 

The Bank of America program is considered to be better for the distressed homeowner than the deed-in-lieu programs that are being offered by other lenders, and more importantly, it will not harm the homeowners credit score.

 

The federal government is also calling on lenders to take action. The current administration is offering lenders incentives to reduce principals for those who owe more than their home is worth. Many of the big banks have done just that, as they had no other choice due to the recent robosigning settlement. Economists are now calling on Fannie Mae and Freddie Mac to also reduce the principals of those that owe more than their home is worth, though they have resisted taking action.

Please Share!

About Josh Johnson

Josh is the main writer for the Residential category. He also helps out on other categories when needed, mainly the International section.

Leave a Reply

Twitter Chat