Homeowners all over the U.S. are drowning in the waves of our current economic recession and many are losing their homes. In just a few short years, neighborhoods that were once flourishing with tenants and families now have foreclosed and for sale signs ominously posted in their front yards. And though the ever increasing foreclosure statistics are climbing at an exponential rate, the reasons people foreclose are important to understand. Here are four common, life changing reasons many choose to foreclose on their home.

1) Dude where’s my job?: According to www.ncsl.org, the unemployment rate in the U.S. was last reported at 9.1 percent in July of 2011. With job loss rates being some of the highest they’ve ever been in history, it’s no wonder so many Americans are loosing their lower valued homes. Even those lucky enough not to lose their jobs are still facing pay cuts or reduced hours making it very difficult to make monthly mortgage payments.

2) Sick and tired: Sometimes illness to a homeowner or family member bring in a tide of overwhelming medical bills that can inevitably lead to missed mortgage payments. And with most lower and middle class American homeowners literally living paycheck to paycheck, increased medical bills and intimidating collectors can make making monthly house payments near impossible.

3) You’re twisting my ARM!:  Many homeowners who bought homes during the housing boom, were unlucky enough to get stuck with an adjustable rate mortgage or ARM. They could afford those payments at the beginning but now with rates at 4% and higher, many are now struggling to pay those increased mortgage payments. Many are not even able to refinance, because of the negative equity in their home making them underwater and sinking fast in their current mortgage.

4) Loves me, loves me not:  At one point you love your spouse and you love your home, but love doesn’t pay the bills. With more than 50 percent of marriages ending in divorce, we get to the heartbreak that leads to foreclosure. The average cost of divorce is $20,000, and the splitting of a household leaves very little money left to make house payments.

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This is filed under Foreclosures.

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