The Two Sides of the Foreclosure Crisis

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Friday, 07 January 2011 15:39
By Enma Diaz
Miami, Fl

Build upon the foreclosure crisis, the Real Estate bubble has weakened the US national economy. Due to mortgage distress, homeowners are practically on the road to face an inevitable foreclosure crisis.

The conventional approach to mortgage refinancing of home loans has been considered as one of the biggest financial debacle in the US history. The leading force that accelerated this setback was the arising of home loan amount as opposed to the drop down of home value.

Due to home prices decline, the Real Estate market is currently living an unpleasant environment. The brand new constituted Affordability and Stability Plan by President Obama is a Home Affordable Refinance Program designed for troubled homeowners leaded up to an unfortunate foreclosure crisis. The program is an act by the US Government to rescue about nine million homeowners from facing foreclosure.

On the other side, the Federal Officials don’t agree with the decision taken by the Government to rescue the foreclosure crisis. The officials think that the government should let the foreclosure as well as the Real Estate crisis to get stable by its own. The officials predict that if foreclosure crisis is left by its own positive results will come for the housing market economy.

As foreclosure steps, the home prices drop down, leading to the rising up of affordable homes and residential properties in the market. With the home value dropping, the Real Estate market will gradually begin to witness normal housing prices. Therefore, the Real Estate bubble prices that have taken its toll over the past decade will vanish. So if the foreclosure crisis is permitted to get stable by its own, it will vanish the Real Estate bubble crisis and render the Real Estate market with home prices that are affordable.

As foreclosure intensifies, the home prices shall decline, thereby giving rise to affordable homes and residential properties. Once the home value drops, the Real Estate market will gradually begin to witness normal housing prices. As a result, the existing Real Estate bubble prices that have taken its toll over the past decade shall wither away. So if foreclosure crisis is allowed to adjust on its own, it will mitigate the Real Estate bubble crisis and render the Real Estate market with home prices that are reasonable and affordable.

Big investors are positively willing to purchase various homes and residential properties that are open to foreclosure. The outrageous interest rates on the mortgages are one reason why homeowners cannot afford to keep the homes for themselves. The investors are anxious to buy those properties which the lenders themselves are unwilling to take over, owing to the foreclosure crisis.


By: Enma Diaz, Editor
Mortgage Lending News, LLC