Why Are There So Many Foreclosures in My Neighborhood? - 7 Simple Reasons, No Good Solutions

If those who work in banks and who has seen and made loans not always performed as agreed, people have asked my opinion about what Ales rural property market and has hit a low point. The last question is easy to deal with and no, absolutely not! Do not try to panic, but a realist. What's worse, and in some countries much worse before they get better. I live in Michigan, so I will share my reasons to factor the significant increase in bankruptcies and late payments to local factors that will apply to many states. For a little 'in Michigan led the nation in foreclosure rates. We were adopted by Florida, California and Arizona for the dubious award with the most foreclosures. What has caused it, here are some reasons:

1) the loan products unrealistic - Why borrowers historically never leave their homes go into foreclosure, Bank underwriting standards yielded significantly with larger lenders products to 120% of property value in a loan, the products of declared income, leaving only the interest payments, escalating arms, etc. If you have a pulse, you have a mortgage. Personally I have a good credit could have qualified for any mortgage product, I wanted two years ago, declaring my income on an application for everything I needed for approval. Why was there ever a product that does not need my income and pay a participant or bank statements in support? Why was there ever a product that you have not made money in the deal. When I bought a house that had 20% Others Because banks and mortgage companies all the risks? The idea of a loan to a partner, but the home buyers had no skin in the game. They had no equity, so it does not hurt to escape. Not everyone deserves a home and that is why they have apartments.

2) During the night mortgage companies - because the profits were so great for years, mortgage companies were born overnight and hacks guides were born. People did not understand their mortgages were now subscription bundle them out and sell them for a good profit on Fannie Mae and Freddie Mac These companies have folded the tent and have probably moved into the collection / foreclosure business.

3) To Lenders / Underwriters - While the theory of a contract provider makes perfect sense, is only paid on mortgages to get loans, so desperate or greedy people because of the undesirable activities. This causes a car salesman "mentality used by the sale of the loan at all. No matter what is best for the borrower / buyer or the bank, the mortgage to sell, make your cut and go. Many institutions trucks paid to insurers based on loans closed. This is problematic because it takes the checks and balances of the process and the information can be easily concealed or altered.

4) Fraud - this is fraud at all levels through the process.
a) Applications such as fraud, falsifying information on the application (income or wealth over) or misrepresentation (which is easy to do now days with all these tax programs).
b) Underwriting Fraud - explained in # 3 above. Commissioned lenders / insurers to get sharp edges deals done and then earn a commission.
c) estimators fraud assessment - values of stretching to ensure that the values come into the house where you need to make a deal happen. Why should they? Because if the consistently low values, a rating would not use this company, but rather go to an expert way that the values would be needed.
d) credit fraud - there are companies you can find on the internet or phone book to determine if there is credit stain (fee). Thus, a borrower who yesterday had a bad credit would have today a good rating and thus qualify for a loan that otherwise could not.

5) the job loss / downsizing - This is a main culprit in Michigan, the economy is again deployed to the three major automobile companies. People who use six-digit income, and based on their declared income to buy a whole house at risk with a reduction in hours or loss of jobs.

6) increase the cost of everything - gas, food, clothing. Everything is significantly increased costs without pity increased profits. Therefore, the weak and weak disposable cash.

7) Loss of negative stigma associated with bankruptcy / Exclusion - There was once an application for bad credit bankruptcy or losing their homes to foreclosure is almost like going around with a red "A" on his chest. Using very difficult to get credit after these negative events. Today is clearly not the case.

Sure, there are many factors that led to the collapse of the mortgage industry - it is only a couple that I usually wise. I also asked if there is a good way to learn about foreclosed homes in your market for some great deals available for purchase. The best options are at your local banks and mortgage lenders and questions call the ORE (Real Estate) I used a Department of bloggers on my site (see below), which is a wonderful reference properties for sale on the market.

The only way to head back to the market in the right direction for houses to sell, and while it will be at a reduced price, or at least the activities will be moved. This would ultimately lead to fewer domestic sales and what happens when home values finally begin to inch up in value (supply and demand). No plans at night, unfortunately happen.