Job loss or unemployment has been triggering the rise of repo home listings, defeating old reasons like bad loans and its effects. So far this year, Americans who lost their jobs reached almost one million; resulting to a lot of foreclosures due to non-payment. Economists believe that this number will still increase and national delinquency rate has a long way to go.
In answer to the economic crisis that hit the country, a lot of private companies cut cost. Reducing its employees will obviously mean leaving too many people unemployed. Of course, they would not be able to pay their monthly dues, including their mortgages.
People who recently lost their jobs have had a hard time finding at least a same-paying job compared to what they have recently – a job that can accommodate their monthly mortgage payments. Worse, they have already used-up almost all of their savings and investments. As a result, they cannot pay anymore leading to foreclosure.
Depleting home prices and increasing number of job less people are two contributing factors to foreclosure. Case in point, in Florida where housing meltdown is worse than other states, the unemployment rate struck from 3.3 percent (May 2006) to 6.6 percent to-date. On the other hand, Freddie Mac reported 45.5 percent cases of delinquencies due to unemployment.
Because of this struggle, a lot of loans have been re-worked and interest rates have been lowered to help the homeowners avoid losing their property to foreclosure. No wonder that foreclosure prevention agencies and unemployment offices are now both jam-packed with hopeful people. Moreover, modification agencies noted a triple increase in their clientele, mainly due to job loss.
Even those who are employed for years are experiencing the same thing. Middle-class Americans who lost their jobs recently have used up all their savings and as a result, they are struggling to pay their bills as well.
No surprise that a few years from now, the number of repossessed homes will still continue to increase. A lot of Americans will not just be jobless but worse than that, will most likely be homeless as well.
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