More Solutions to Reduce Foreclosures

With the economic slowdown, experts see more homeowners facing foreclosure this year. Unemployment, the rising cost of living and other troubles related to the ailing economy are causing more to struggle in paying their monthly bills and mortgages.

In fact, the number of foreclosed homes in 2008 increased by 63.5 percent from 2007, according to data cited by Business Wire on January 15, 2009. The New York Times likewise reported that one in 54 US housing units received a foreclosure filing last year, based on the tally released by Realty Trac, a self-described “online marketplace for foreclosure properties.”

Governments are taking various actions to keep homeowners in their homes and out of foreclosure. Even community groups, consumer advocate associations, private charities, churches and individual lenders are launching different programs to give homeowners more options and to reduce foreclosures.

On the federal level, lawmakers are considering to use part of the Troubled Assets Relief Program (TARP) fund to finance federal foreclosure prevention programs. These state efforts aimed at reducing the number of foreclosed homes primarily involves loan modification. States are also actively participating in multi-state foreclosure prevention taskforces. For instance, North Carolina has set up a website to reach out to homeowners facing foreclosure.

On the city level, credit counseling and foreclosure prevention workshops are held to help homeowners cope. Even some actions have been extraordinary, such as moratoriums on foreclosures. This is something that states have been considering and have even gotten the attention of the federal government.

Private lenders are also initiating their own moratoriums and have been taking steps towards renegotiating and modifying loans. As reported in the Arizona Republic, JP Morgan Chase would extend its mortgage-modification efforts to include $1.1 trillion in loans as part of its foreclosure prevention program. Another major lender, Citigroup, has been reported by CNNMoney.com on January 8, 2009 that it has agreed with democratic lawmakers on legislation that would allow judges to reduce mortgage debts for individuals who have filed bankruptcy.

Now, with more options to reduce foreclosures, struggling homeowners can take early action to keep their properties.

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