A Logical Solution To Help Stop Foreclosure

Empty houses with unkempt lawns can ruin communities. It becomes a place where crime and vandalism flourishes, and it slowly brings down the prices of the houses in the neighborhood as time goes by.

Sadly, this is exactly what is happening to most neighborhoods where foreclosures have taken place, and especially where they are more than one in the same area.

Foreclosures have reached an all-time high, and have rendered many families homeless and destitute after suffering from the impact of predatory lending. It is not a pretty sight.

A lot has to be done in a very short span of time. There is little availability of affordable housing. More foreclosures will only add to the problem. Experts gave their views at the Regional Housing Forum meeting last week, offering different opinions on how to tackle this problem.

The most logical solution: Stop house owners from declaring bankruptcy. Provide help to the suffering home owner before they are more than 45 days late on their mortgage payment so that they can avoid foreclosure and bankruptcy.

Frank Alexander, a professor at Emory University who is currently teaching at Harvard University says “The likelihood of stopping foreclosures is much more likely in that time period than after 90 days”.

Organizations like the Home Ownership Helpline and the Consumer Credit Counseling Service can aid house owners in restructuring their loans and provide them help in managing their finances. Frank feels that banks should step forward and suggest that house owners should get some help as soon as there is any trouble with the payments. This will prompt home owners to seek aid when they receive this information.

It is also important that the state legislature and the governor should allow an extension in the time taken between the declaration of a default and the subsequent foreclosure sale. At present, Texas and Georgia have the least amount of time taken between the default period and the sale — 37 days. This is hardly enough to give house owners time to sort out the issue.

Frank Alexander, along with his Georgia Tech colleague, Dan Immergluck, feel that it would be more reasonable to offer a ninety day time frame to home owners which will give them enough time and help avoid foreclosure in the long run, especially since it is now in the limelight, and people are getting more educated about the issue.

Immergluck says “These lenders are under pressure from their investors to maximize returns. Yet they need to bring down values of the properties that they own so that they’re affordable”.

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