During the Great Depression of the 1920′s, home prices in the U.S. declined 31%. Compare that to the 33% they have fallen since the home market began its collapse in 2006. These prices are actually expected to fall even lower.
In addition, underwriting standards have become more stringent. More than four in every five mortgages now require a down payment of twenty percent and many potential home buyers’ credit history simply does not make the cut, thus denying further potential homeowners the opportunity to purchase a home.
Add to this the fact that an overload of foreclosures on the market are also causing home prices to plummet. When banks have homes on the market, prices fall. Banks own twice as many homes as they did at the beginning of this current housing crisis. It would take banks three years to sell off all the homes they currently own.
4.5 million households are either three payments late or are already in foreclosure proceedings. Those who owe more than their home is worth represent another 23% who cannot leave or are in danger of mortgage default. Nationwide 1 in 605 housing units received foreclosure filings in May, 2011. The states that lead this foreclosure debacle are CA, FL, MI, AZ, NV, IL, GA, TX, OH and WI.
Even with loan modification programs that temporarily halt foreclosures, the fact is that foreclosures are rising. Florida continues to have one of the highest foreclosure rates in the country.
You aren’t alone having mortgage trouble these days. As of April, about 47 percent of Miami-Dade, Florida homeowners with mortgages owed more than their home was worth, according to the real estate research firm CoreLogic. Nearly 20 percent of South Florida homeowners are in foreclosure, according to the Mortgage Bankers Association. Even public officials such as Mayor Garcia of Miami Springs, is experiencing foreclosure trouble. “Just like many families and households that have suffered during our nation’s and region’s economic downturn, so too did my family experience financial difficulty,” he said. “Our mortgage payments had realized a substantial and unpredictable increase and we needed to adjust…We have dealt with our problems responsibly, legally, and in good faith. My family and I are at the brink of resolving this personal crisis with our bank and we will be out of foreclosure very soon.”
Amerihope Alliance Legal Services has several options for homeowners who are behind in their mortgage payments. Please call for a complimentary consultation in order to discuss which options are available to you.