Fact, in the US more than 11% of all mortgages are either delinquent or in foreclosure. This is an alarming number. Currently there are about 1.5 million homes which are probably going to be going through foreclosure! To refinance home mortgage often times becomes the home owners only visible choice, but not always.

Foreclosures are mostly on Subprme and Alt-A loans. Who made subprime and Alt-A loans, look at Countrywide, Bank of America just to name a few as well as Freddie Mac and Fannie Mae.

These where loans made to people, in my opinion by greedy brokers, agents and banks.
Subprime and Alt-A are loans for individuals which could not qualify for a standard mortgage loan. Application for these types of loans which required a standard processes which are credit history and verification of income from an employer did no occur. An entire laxative approach to making a loan was occurring.

The only advantage that I can see is that people got into nice homes that they either couldn’t afford or where at the brink of affordability. These were almost exclusively adjustable rate mortgages. Once the arm came dew, usually after 5 years into the loan became unaffordable for the owner. The bank in turn, after the mortgage had been delinquent for a certain amount of month (depending on the state law) the banks would foreclose on the property.

The owners of these expensive homes would buy, hedging or betting that they could sell for a higher value within a few years, giving the owner profit. They assumed that their salaries would keep going up and they would not have any problem meeting the higher mortgage costs.

Currently around the US five states have led the path which required the federal government needed to step in.. They were Califonia, Nevada, Arizona, florida and Michigan. Another 5 states for a total of ten now dominate the mortgage delinquency.

I’ve heard and read that until housing costs come down into line with what people can afford there will not be much purchasing of homes. When it requires a 6 figure salary to afford a condo, that in my opinion is a little much to ask. Also in my opinion, the bailout will be short lived and will not produce what it’s suppose to. Simple fact, people spend money when they feel comfortable with their environment. Just look at Wall Street and the market. They’ve already casted their vote. Just look at history from the Great Depression.

With the percentage of delinquent mortgages or a refinance Home Mortgage today what is yet to come, I suspect this recession is going togo down a long path before we see any relief. Remember that these subprime and Alt-A loans where made for five years ending in 2007! With statistics pointing at 48% of all home loans subprime/Alt-A type mortgages, this means that there are allot of adjustable arms out there which have not even come due.

If this sense to get out of debt and financial freedom is something that your looking for and would like more information on getting out of debt and/or reducing your mortgage or credit card debt is something that is of interest, then feel free to contact Greg Steele

If you would like to read me articles, check out my blog at FinancialWaste.com