Reports Reveal Increase Of Foreclosures In Iowa
Posted in Foreclosure Crisis, January 27th, 2010
Recent studies made by the State regulators reveal that the increasing number of homeowners striving to meet their mortgage payments has led to the accelerating number of foreclosures in 2010.
“We are at risk of a devastating acceleration of foreclosures unless improvements are made in foreclosure prevention efforts,” mentioned in the fourth report released by the State Foreclosure Working Group. State foreclosure Working group is composed of a team of attorneys general from 13 states, including Iowa, and 3 state bank regulators.
Formed in 2007, the State Foreclosure Working group was set out to find the ways regarding how to check the unnecessary foreclosures. It was also revered as the foremost organization focused on collecting foreclosures and data from mortgage servicers. After they published the reports, the Treasury has also gathered a number of data regarding Home Affordability Modification Program (HAMP). It was said that HAMP is not making adequate endeavors to reduce foreclosures.
In the reports, it was highlighted that “Despite efforts of servicers, homeowners and the government, the foreclosure crisis continues to worsen. These signs point to more foreclosures in 2010 than in 2009”.
The reports show that 13 mortgage servicing companies are managing about 14.5 million in loans, of which 15.75 percent were due at least 30 days during the month of September 2009. The report also says that 2009 marked a, 66 percent boost in delinquencies from 2008 and about 27.5 percent increase from 2007. It was also reviewed that only 9.4 percent of the loans were modified during the period of a month.
“More than half the people are not on track to working their loans out,” revealed Mark Pearce, the honorable chief deputy commissioner of banking of North Carolina and a member of the working group. “That’s a significant problem and one that gives us concern.”
However, more worrying fact is that, more than 70 percent of loan modifications lead to an increase in the principal amount of the loan. Regarding the increasing amount of foreclosure, Tom Miller, Iowa Attorney General said “It’s in the best economic interest of many who hold these mortgages or the securities that back them “to have a principal reduction rather than having a foreclosure in this awful market”.
“It’s hard to say if foreclosures will increase in Iowa,” Miller said. He has also added: “How Iowa fares this year will depend mostly on our economy and rate of unemployment, and whether servicers and federal agencies are able to implement the recommendations we make in the states’ report.”
