The LA times recently reported that more properties have entered the foreclosure process during the month of August this year than ever reported. This is largely caused by Bank of America, one of the leading home financing lenders in the U.S. Bank of America has increased their foreclosure processes in many states such as Nevada and California, because a court order is not required to retrieve the home from delinquent homeowners. Unfortunately, California currently has the highest foreclosure rate in the country.

Many are reporting that there doesn’t seem to be a break in sight for the rising foreclosure rates that are sweeping the country. Homeowners wanting to leave their current homes are finding themselves trapped, because they aren’t able to sell a home that is worth less than when it was originally purchased. Most do not even have equity to fall back on to start over. Individuals that qualify for a loan modification can take solace in the fact that they’ll have manageable mortgage payments, though they still remain tied to their unyielding house debt. However, any relief is better than none in our current economy.

Homeowners who are not able to qualify for a loan modification are considering more drastic alternatives. Some are taking the risk to turn their home into a rental property in the hopes that they’ll get a reliable renter to make the necessary payments while they take on lower priced accommodations elsewhere. But for those who don’t have that option, short sales, deeds in lieu of foreclosure, or an eventual looming foreclosure are all the relief they have to escape from their house.

For first time homebuyers who want to take advantage of the record low interest rates of the flailing housing market, obtaining financing through lenders has become stricter than ever! The down payment requirements have increased and the hoops Americans have to jump through to qualify for home financing have discouraged many and pushed them into home rentals instead. Unfortunately with the way the market is trending, it will be a long while before we can expect a positive change in the real estate market.

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This is filed under Foreclosures.

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