Facing Foreclosure?
By Richard K. Gustafson II
If you are facing foreclosure, you’re not alone! There are many reports across the country that discuss rising foreclosure rates. RealtyTrac, the leading online marketplace for foreclosed properties, reported a 13% increase nationwide in December 2005 and increased in every quarter in 2005.
The national foreclosure rate increased 27% in January, 2006
from December, 2005 and compared to January of 2005 the rate has since increased 45%! Historically, according to a 2003 report published by The Federal Reserve Bank of New York - Buffalo Branch, “the percentage of home loans in foreclosure has generally risen over the past twenty years.” According to Foreclosure.com, an online foreclosure listing service, foreclosure rates rose in 47 states in March, 2005.
Many economists and experts blame the “national lending explosion” for the increase. Other sources identify a trend over the last twenty years for higher loan-to-value (LTV) ratios.
The Federal Reserve of New York - Buffalo Branch’s 2003 study blames poor loan-to-value ratios (LTV). LTV ratios have been increasing nationwide over the last twenty years. Loans with low or no down payments and other high-LTV loans (like second mortgages that loan up to 100% of the value of the house) have increased over the last decade. Studies have suggested that higher LTV ratios lead to increased foreclosures.
Julie L. Williams, a US comptroller of the currency whose agency regulates banks said “we are clearly seeing a spike in foreclosures in a number of our major urban areas.”
Whatever the cause of the problem, the fact is that if you find yourself behind on your mortgage payments, you are not alone. But, there is good news! Chapter 13 can be a solution to the foreclosure problem. By restructuring all of your debt into one lower monthly payment, you can make it easier to afford your mortgage payments. Chapter 13 can also stop foreclosure and allow you to get caught up on your mortgage. Some aspects of the new bankruptcy reform legislation make Chapter 13 an even more attractive solution.
