Signs of new wave of foreclosures
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The number of homeowners who are current on their mortgages, but still calling into the Homeownership Preservation Foundation's hotline for help, is up 70% since last June, the organization reported this week.
And that could signal a new wave of foreclosures.
Of the current borrowers who called for mortgage counseling, 75% had credit scores well above what would be considered subprime when they got their mortgages. But now, reduction in income or increased credit card usage have worsened their financial picture.
Moreover, only 40% of those current callers qualify for the government's expanded Home Affordable Refinance Program.
"We are seriously concerned about the rise in homeowners who were classified as low risk when they took out their mortgages and, as a result of a combination of circumstances--job loss, health-care crises and various recession-related issues--have seen their economic situations severely deteriorate," said Colleen Hernandez, chief executive of the nonprofit foundation, in a news release.
"This could result in the proverbial 'second shoe to drop' for the housing crisis, especially considering the limited options available to homeowners who are struggling but not yet delinquent."
RealtyTrac also reported this week an increasing number of foreclosure starts in the second quarter. Read that and more in this week's Real Estate pages. Plus, read a Realty Q&A about new online calculators that help borrowers determine when their mortgages will no longer be underwater.
"This foreclosure crisis is far from over," Hernandez said. "As lenders are learning to comply with new servicing standards set in place by the National Mortgage Settlement and the Consumer Financial Protection Bureau, make no mistake that notices of default are once again landing in mailboxes across the country at a pretty rapid clip."
--, Real Estate writer
Foreclosure starts on the rise
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