More Foreclosures Are Due to Job Losses
The wave of foreclosures that has rocked the U.S. has in large part been blamed on poor loans. But according to CNNMoney, an increasing number of humans are losing their homes considering of job losses. Freddie Mac reported that 46% of foreclosures in June were related to unemployment or loss of income.
“The two economic factors that most contribute to foreclosures are falling home prices and rising unemployment,” Richard DeKaser, chief economist for National City Corp. told CNNMoney. “It’s hard to pay your mortgage when you don’t have a job.”
Staggering Job Losses
The number of home foreclosures in the U.S. jumped a whopping 71% in September from a year earlier, according to RealtyTrac. The Bureau of Labor Statistics reported that 9.5 million humans were unemployed in September. Jobs continued to be lost in the construction, manufacturing, and retail industries. Overall, about 1 million humans have lost their jobs since the beginning of the year. CNNMoney reported
Waiting for Aid
That means that more public won’t be able to afford to stay in their homes unless they get some kind of help with their mortgage payments. The U.S. government is expected to announce soon that $50 billion will be spent to address poor mortgages and foreclosures. The money would come from the $700 billion bailout package passed in October. Proposals being discussed include ideas to:
• Reduce monthly payments for homeowners who are delinquent on home loans.
• Offer government backing to lenders who write down a mortgage to 90% of its appraised value.
• Reduce interest rates on existing mortgage loans.
• Extend the length of date a homeowner has to repay their home loan.
And while there’s a possibility of another stimulus package being passed, it’s debatable whether that would have a significant impact on the foreclosure rate.
Orginal post by Francine Huff
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