Still Going Strong…unfortunately

Foreclosure numbers are still staggering and they are likely to continue until some type of “real” aid is available to the average homeowner who is losing their job, unable to make payments or just made a poor financial decision.

What To Do Now

If you are at risk of foreclosure, you need to do something now. Do not wait as this is a sign of your willingness to go through with the foreclosure. Instead, invest the time in getting help.

#1: Talk to an experienced Housing Counselor about your situation. They may be able to point you in the right direction in terms of stopping the foreclosure process. There IS help available for many people.

#2: Talk to your lender. Today’s lenders are more willing than ever to keep you in your home by finding a solution to foreclosure. When they call, tell them what is happening and ask what type of help they can offer.

Should You Keep Your Home?

Those without income may be unable to remain in their home since no amount of mortgage can be paid. If you do have a job and you do wish to stay in your home, find out if there are any options to help you to do so. If you lose your home to foreclosure, lenders will not lend to you for years to come. With the credit market being so tight, even with good credit, you will struggle to find a lender to buy another loan, or even a rental agent who will rent to you. In other words, if you can stay in your home, do so.

Those who may be having trouble with lenders or those who are unable to find the help they need otherwise, may wish to look for help directly from FHA loan specialists. The goal you have is to get help now. Do not wait since it only takes a few months before you are too far into the foreclosure process to stop it.

Freddie Mac losses mount, warns of foreclosures

Freddie Mac’s losses keep mounting, but mortgage giant avoids requesting more taxpayer aid

 WASHINGTON (AP) — Freddie Mac lost almost $26 billion last year, ominous news for taxpayers who are footing the bill to rescue the mortgage finance company and its sibling Fannie Mae.

Freddie Mac, which has lost a total of almost $80 billion since the housing crisis started in 2007, is bracing for more pain. The McLean, Va.-based company said a record 4 percent of its borrowers are at least three months behind on their payments and facing foreclosure.

Its chief executive, Charles Haldeman, warned Wednesday of a “potential large wave of foreclosures” still to come.

This is a major problem for the federal government, which seized control of Freddie and Fannie in September 2008. The two companies have already siphoned $111 billion from the government to stay afloat. That number is expected to hit $188 billion by fall 2011.

And while Freddie Mac didn’t ask for any more bailout money last quarter, the company said it will likely need more financial aid and might never repay it.

“We now have unlimited taxpayer exposure to the bailout of Fannie and Freddie, a bailout nation where the big get bigger, the small get smaller and the taxpayer gets poorer,” Rep. Jeb Hensarling, R-Texas, said at a House hearing Wednesday.

Fannie and Freddie dominate the mortgage market, backing about 70 percent of the loans made last year. The two companies purchase mortgages from lenders and package them into securities. Investors are willing to buy the securities because they are effectively guaranteed by the U.S. government. That puts American taxpayers at risk.

But the fragile housing sector is so dependent on the government that officials say they won’t have a detailed exit strategy until next year. Underscoring the market’s weakness, the Commerce Department said Wednesday that sales of new homes unexpectedly plunged 11 percent from December to January to the lowest level on record.

Treasury Secretary Timothy Geithner told lawmakers Wednesday that the Obama administration will “make sure we bring about fundamental change in the housing market and get ourselves in a position where the government is playing a less risky, but more constructive role in supporting housing markets in the future.”

Separately, Freddie Mac warned there is “significant uncertainty as to whether or when we will emerge” from government control.

For taxpayers, stabilizing Freddie and Fannie Mae has been one of the costliest consequences of the financial meltdown. Freddie Mac has received about $51 billion from Treasury to date, and the Obama administration has pledged to cover unlimited losses through 2012.

Freddie Mac said Wednesday it lost $25.7 billion, or $7.89 a share, for all of 2009. Of those losses, $4.1 billion went to dividends paid to the Treasury Department, which holds a nearly 80 percent stake in the company.

In the final three months of last year, Freddie Mac posted a loss of $7.8 billion, or $2.39 a share. The results, however, were a marked improvement over the fourth quarter 2008 when Freddie lost $23.9 billion, or $7.37 a share.

During the most recent quarter, Freddie suffered $7.1 billion in credit losses and a $3.4 billion write-down in low income tax credit investments. Also Wednesday Fannie Mae said in a regulatory filing that it plans to take a $5 billion charge when it reports its fourth quarter results later this week.

Short Sales…will they become less of a headache?

The biggest mystery to me over the last eighteen months was why banks weren’t more receptive to the ‘short sale’ process. Studies have shown that it costs the bank more money if a property was foreclosed upon than if they accepted a ‘short sale’. For homeowners, a ‘short sale’ makes much more sense for several reasons:

• There is a much higher chance that the deficiency judgment could be negotiated in a short sale versus a foreclosure.

 • A short sale would have less of a negative impact on the homeowner’s credit rating.

• The homeowner would have at least some control over the timing of their relocation to new living arrangements.

• A ‘short sale’ would allow the homeowner to leave with dignity.

So, if it would be better for both the bank and the homeowner, why were more ‘short sales’ not completed? A recent research study by The National Consumer Law Center (NCLC) has uncovered the mystery behind this dilemma. In order to understand it, we must first look at the differences in the banking industry over the last ten years.

In the past, the banks used to process the loan (take the application, put together the file, etc.), lend you the money, and also service the loan (send the bills, make collection calls, follow-up, etc.). Over the last eight to ten years, the lending of mortgage money has shifted. First Wall Street and then the federal government became the primary lender in the mortgage sector. But, neither Wall Street nor the government had any interest in processing or servicing the mortgage. Mortgage companies continued to process the loans, but a new industry was created to fill the need for the servicing of these loans. So now, a separate and independent entity is servicing a tremendous portion of existing mortgages.

Just ten years ago, 37.4 percent of all mortgage loans were securitized (thus requiring a servicing company). Today, that number is 79.3 percent. The NCLC study shows that the reason more houses are not available for ‘short sales’ is because these servicing companies actually collected more fees for a foreclosure than they did for a ‘short sale’. Actually, the servicing company would lose money if they did a ‘short sale’. Since they were now in charge of making that decision, it was obvious why foreclosure was the alternative of choice.

The federal government realizing that modifications were not the answer and banks realizing that the foreclosure process was too expensive, have agreed to change the fee structure to make it more profitable for the servicing companies to lean toward ‘short sales’.

It’s always about the money. This situation was no different. Now that the money will flow to the companies that choose the ‘short sale’ alternative, watch how much easier the ‘short sale’ process will become.

Short Sales

A few years ago, few people in the housing market had ever heard of a short sale. Mention the term today and people, whether they are homeowners or real estate agents, just roll their eyes.

The practice, which involves selling a property for less than the amount owed on the mortgage, has grown in popularity as an exit strategy for financially strapped homeowners because it doesn’t ding a credit report as deeply as a foreclosure. But because the transactions have to be approved by first and second lien holders, they are languishing. Some real estate agents try to steer clear of them entirely and even specify in their listings that a property is not a short sale. 

In mid-May, Treasury Secretary Tim Geithner announced plans to streamline the process by offering financial incentives to mortgage servicers and investors that accept short sales, much in the same way that they are rewarded for refinancing or modifying troubled mortgages. Four months later, homeowners, real estate agents and lenders are still waiting for specific details of how the plan would work. A Treasury Department spokeswoman said an update on the program is expected in a few weeks. 

Read more: http://rismedia.com/2009-09-26/short-sales-spread-across-real-estate-market-leaving-frustration-in-their-wake/#ixzz0SMEN3INl

A few years ago, few people in the housing market had ever heard of a short sale. Mention the term today and people, whether they are homeowners or real estate agents, just roll their eyes.

The practice, which involves selling a property for less than the amount owed on the mortgage, has grown in popularity as an exit strategy for financially strapped homeowners because it doesn’t ding a credit report as deeply as a foreclosure. But because the transactions have to be approved by first and second lien holders, they are languishing. Some real estate agents try to steer clear of them entirely and even specify in their listings that a property is not a short sale. 

In mid-May, Treasury Secretary Tim Geithner announced plans to streamline the process by offering financial incentives to mortgage servicers and investors that accept short sales, much in the same way that they are rewarded for refinancing or modifying troubled mortgages. Four months later, homeowners, real estate agents and lenders are still waiting for specific details of how the plan would work. A Treasury Department spokeswoman said an update on the program is expected in a few weeks. 

Read more: http://rismedia.com/2009-09-26/short-sales-spread-across-real-estate-market-leaving-frustration-in-their-wake/#ixzz0SMEN3INl

A few years ago, few people in the housing market had ever heard of a short sale. Mention the term today and people, whether they are homeowners or real estate agents, just roll their eyes.

The practice, which involves selling a property for less than the amount owed on the mortgage, has grown in popularity as an exit strategy for financially strapped homeowners because it doesn’t ding a credit report as deeply as a foreclosure. But because the transactions have to be approved by first and second lien holders, they are languishing. Some real estate agents try to steer clear of them entirely and even specify in their listings that a property is not a short sale. 

In mid-May, Treasury Secretary Tim Geithner announced plans to streamline the process by offering financial incentives to mortgage servicers and investors that accept short sales, much in the same way that they are rewarded for refinancing or modifying troubled mortgages. Four months later, homeowners, real estate agents and lenders are still waiting for specific details of how the plan would work. A Treasury Department spokeswoman said an update on the program is expected in a few weeks. 

Read more: http://rismedia.com/2009-09-26/short-sales-spread-across-real-estate-market-leaving-frustration-in-their-wake/#ixzz0SMEN3INl

A few years ago, few people in the housing market had ever heard of a short sale. Mention the term today and people, whether they are homeowners or real estate agents, just roll their eyes.

The practice, which involves selling a property for less than the amount owed on the mortgage, has grown in popularity as an exit strategy for financially strapped homeowners because it doesn’t ding a credit report as deeply as a foreclosure. But because the transactions have to be approved by first and second lien holders, they are languishing. Some real estate agents try to steer clear of them entirely and even specify in their listings that a property is not a short sale. 

In mid-May, Treasury Secretary Tim Geithner announced plans to streamline the process by offering financial incentives to mortgage servicers and investors that accept short sales, much in the same way that they are rewarded for refinancing or modifying troubled mortgages. Four months later, homeowners, real estate agents and lenders are still waiting for specific details of how the plan would work. A Treasury Department spokeswoman said an update on the program is expected in a few weeks.

Tips for 1st-time Homeowners

Suggestions;

• Know your score. Check your credit score before you make any decisions. Credit scores range from 300 to 850. The median U.S. credit score is about 693, according to Experian, one of the three main credit reporting agencies. A score below 620 usually results in a borrower being charged a higher interest rate or being denied credit. In today’s environment, you will need a good score to qualify for a mortgage. If your score is lagging, wait a few months. In the meantime, pay every bill on time, pay down as much debt as possible to improve your chances. If possible, ask creditors for increases on your credit limits to help out the “credit available” aspect of your credit score – but do not tap into the addition.

• Do not stretch too far. Often, borrowers are told they can qualify for a higher mortgage than they can comfortably pay. It is wise to keep housing expenses below 35 percent of your total income. Leave breathing room in your budget so that if something unplanned does occur, you will be able to keep your home.

• Know the full costs of buying. The down payment and principal and interest on a mortgage payment are only the beginning of home-related costs. For a typical mortgage payment, “escrow” payments, or the costs of home insurance, property taxes, and, in some cases, private mortgage insurance, can total hundreds of dollars per month in addition to principal and interest. Determine the property tax amount – the largest part of the escrow payment – by checking with your real estate agent.

• Be sure to not deplete savings or cash on hand when making a down payment, since new homeowners often must complete initial work on the home, such as painting, flooring, landscaping or bringing an older house up to date. After that, a rule of thumb is to budget 1 percent of the home’s purchase price per year for home repairs and upkeep.

• Understand private mortgage insurance. Conventional Mortgages with less than a 20% down payment & all FHA Mortgages require PMI in case the owner defaults on the loan. When the home owner pays the mortgage down to 80% or less of the home’s value, the home owner can request the lender to cancel the PMI on a conventional mortgage and stop paying the additional amount. Meanwhile, PMI is tax-deductible, at least through 2010.

• Check for prepayment penalties and other provisions. If your loan has a prepayment penalty, borrowers face hefty charges if they pay it off early. This provision also can apply to future refinancing, so be forewarned. To determine if there is a prepayment penalty, review the Truth in Lending disclosure or ask your lender to find out. Prepayment penalties have come under increased scrutiny since the mortgage crisis began, so if you find your loan has one, voice your dissatisfaction directly and clearly to your lender or broker.

• First-time home buyers – including people who have not owned a home for at least three years – qualify for a tax credit of up to $8,000 if they purchase a home before Dec. 1, 2009. The credit does not have to be repaid if the buyer keeps the home for at least three years.

• Buyer beware. Some of the lowest prices on homes today are “fixer-uppers” or homes sold “as is” because of foreclosure. Invest in a home inspection before agreeing to purchase any home. You may even be able to split the cost of this inspection – typically less than $400 – with the seller. The inspection will inform you of any faults in the home and help you determine the approximate cost to remedy those problems. Without an inspection, you could wind up owning a home that requires thousands of dollars of repairs.

The Wave will Continue…Foreclosure Wave

A continuing steep drop in home prices combined with rising unemployment is powering a new wave of foreclosures. Unfortunately, there’s little evidence, so far that the Obama administration’s anti-foreclosure plan will be able to stop it.

The plan offers up to $75 billion in incentives to lenders to reduce loan payments for troubled borrowers. Since it went into effect in March, some 100,000 homeowners have been offered a modification, according to the Treasury Department, though a tally is not yet available on how many offers have been accepted.

That’s a slow start given the administration’s goal of preventing up to four million foreclosures. It is even more worrisome when one considers the size of the problem and the speed at which it is spreading. The Mortgage Bankers Association reported last week that in the first three months of the year, about 5.4 million mortgages were delinquent or in some stage of foreclosure.

Not all of those families will lose their homes. Some will find the money to catch up on their payments. Others will qualify for loan modifications that allow them to hang on. But as borrowers become more hard pressed, lenders — whose participation in the Obama plan is largely voluntary — may not be able or willing to keep up with the spiraling demand for relief.

One of the biggest problems is that the plan focuses almost entirely on lowering monthly payments. But overly onerous payments are only part of the problem. For 15.4 million “underwater” borrowers — those who owe more on their mortgages than their homes are worth — a lack of home equity puts them at risk of default, even if their monthly payments have been reduced. They have no cushion to fall back on in the event of a setback, like job loss or illness.

A robust anti-foreclosure plan should directly address the plight of underwater homeowners by reducing the loans’ principal balance. That would restore some equity to borrowers — and give them a further incentive to hold on to their homes — in addition to lowering monthly payments. The mortgage industry has resisted this approach, and the Obama plan does not emphasize it.

With joblessness rising, lower monthly payments could quickly become unaffordable for many Americans. Researchers at the Federal Reserve Bank of Boston argued that unemployment is driving foreclosures and to make a difference, anti-foreclosure policy should focus on helping unemployed homeowners. The report suggests a temporary program of loans or grants to help them pay their mortgages while they look for another job.

The government will also have to make far more aggressive efforts to create jobs. The federal stimulus plan will preserve and generate a few million jobs, but that will barely make a dent — in the overall economic crisis or the foreclosure disaster. Since the recession began in December 2007, nearly six million jobs have been lost, and millions more are bound to go missing before this downturn is over.

President Obama needs to put more effort and political capital into promoting the middle-class agenda that he outlined during the campaign, including a push for new jobs in new industries, expanded union membership and a fairer distribution of profits among shareholders, executives and employees.

There will be no recovery until there is a halt in the relentless rise in foreclosures. Foreclosures threaten millions of families with financial ruin. By driving prices down, they sap the wealth of all homeowners. They exacerbate bank losses, putting pressure on the still fragile financial system. Lower monthly payments are a good start, but they are no substitute for home equity. And until more Americans can find a good job and a steady paycheck, the number of foreclosures will continue to rise.

Bankruptcy…solution to the housing crisis?

…or a way to increase jobs…huh?

The United States is on the verge of witnessing the largest bankruptcy filings in recorded history. One of the reasons is due to the new Mortgage Restructuring Bill (now named The Helping Families Save Their Homes Act of 2009) passed by the House of Representatives yesterday with a vote of 234 to 191.

The new Bill allows bankruptcy judges to alter the mortgage terms so as to assist homeowners in avoiding foreclosure. Think about it folks! If you lost your job (like millions of Americans) and you could file bankruptcy and save your home; what would you do? You would file bankruptcy, of course. This is why bankruptcy filings will dramatically increase and people will be needed who have the skills to handle this mountain of work.

This new Bill requires a homeowner to first seek a negotiation or a voluntary loan change from their lender before filing bankruptcy. You know as well as I do that the majority of people do not know how to do this. Therefore, if you offer foreclosure mediation services, you will have no problem getting work from homeowners who are required to complete this first stage at least 30 days before filing bankruptcy.

Bankruptcy judges will then make the determination, based on the person’s income against the payments the homeowner has made before deciding whether an interest rate or principal reduction will be applied. Then, the value of the home will be determined by using federally approved appraisal guidelines.

If you thought the filings in 2005 (before the law changed) pushed the envelope to historical proportions you cannot imagine what is going to occur within the next few weeks and continue for many months and years to come. It is to your advantage to get the training you need to work in the field of debtor bankruptcy law so you will be in a position to earn a good living while helping others.

Time to Walk Away…??

If you’re among the millions of people who will not qualify for the Obama administration’s program to help troubled homeowners, you’re probably wondering what you’re supposed to do now.

Skip to next paragraphPerhaps you no longer have enough income to pay your loans. Or you can afford the payments but don’t qualify for refinancing under the new plan because the value of your home is too far below the balance of the loan. If you’re far enough underwater, you’re probably questioning the wisdom of writing a monthly check on a place that may take 10 or 15 years to get back to the value it had two or three years ago. It isn’t easy to come up with the answer, and if you have moral misgivings about not making good on your mortgage, a religious officiant may offer as much useful guidance as a financial planner.

In an economic environment like this one, however, the consequences of giving up on your mortgage may not be as painful as they were a few years ago. Yes, it’s almost always preferable to negotiate a better deal on your existing mortgage than to walk away. But if you can’t work things out with your lender, you probably won’t be sued. You shouldn’t receive a major tax bill either. And the damage to your credit will not be permanent or insurmountable

Let’s look at these last three in order.

YOUR LENDER First off, let’s define what we mean by “giving up” on your current mortgage. It may mean trying for a short sale, where the lender allows you to sell your home for less than the mortgage amount. You may also hand over the deed to the home in exchange for the lender agreeing not to start foreclosure proceedings (a “deed in lieu” in industry terms). Then, there’s foreclosure itself, and the possibility that bankruptcy judges may soon have the power to adjust the terms of primary mortgages.

That said, just because you’re ineligible under the Obama plan doesn’t mean that your lender or servicer won’t ultimately adjust your mortgage anyhow. Collectively, there are enough people in trouble or under water on their loans that they have plenty of leverage if they’re willing to play chicken with their lender and threaten to stop paying.

The problem is, the lender can play chicken, too, by threatening to come after you for the balance of any money you owe — whether it’s the difference between what you sell the property for yourself and the remaining mortgage, or the loan amount left over after the lender sells your property in foreclosure.

The lender may not follow through, though. “What our membership is telling us is that it can be cost-prohibitive to chase down a borrower who is already in financial distress,” said John Mechem, a spokesman for the Mortgage Bankers Association. “You can’t squeeze blood from a stone.” They may, however, still come after people with high incomes who walk away from jumbo loans that are way under water or loans on investment properties.

Some states have laws that may specifically prohibit lenders from pursuing borrowers for the balance of many mortgage loans after foreclosure, though the particulars vary. Arizona and California are among these states, according to Steven Bender, a professor at the University of Oregon School of Law. It’s best to talk to a lawyer to determine your state’s rules.

In fact, if you want to be sure your lender (or a collection agency that it may sell your loan to) won’t chase you down, it’s a good idea to have a lawyer involved with any short sale, deed in lieu or foreclosure itself. “You must get the bank to agree in writing that any deficiency is waived,” said Chip Parker, a lawyer specializing in foreclosure with Parker & DuFresne in Jacksonville, Fla.

The biggest challenge here may simply be finding someone at the bank to help. Having a second mortgage will also complicate matters.

YOUR TAXES You also need to consider the taxman. Often, forgiven debts are taxable as income. Recent legislative changes, however, eliminate the federal tax burden through 2012 on most primary residence debt that a lender has reduced through loan restructuring or forgiven during foreclosure.

YOUR CREDIT A short sale, deed in lieu or

YOUR CREDIT A short sale, deed in lieu or foreclosure itself will almost certainly damage your credit report and score, and the black mark will last for up to seven years. But the amount of damage it does will depend on how much other credit trouble you’ve gotten yourself into with other lenders.

If you’re giving up the home you own, you’ll probably need to rent soon afterward. Will landlords turn you away once they check your credit and discover your troubled mortgage? If it’s the only thing marring your credit, it’s probably not a big issue.

FICO may have to adjust its credit scores to lessen the impact of a foreclosure or similar incident. It just seems obvious that a foreclosure in 2008 or 2009 doesn’t have as much information value as a foreclosure five years ago.

Some lenders aren’t waiting that long to initiate their own foreclosure destigmatization programs. The Golden 1, one of the nation’s largest credit unions, now has a mortgage repair loan for people who have lost a home to foreclosure but want to buy a new one.

It’s hard to imagine that there won’t be a parade of insurance companies, credit card issuers and mortgage lenders in Golden 1’s wake, even though Fannie Mae and Freddie Mac may be unwilling to guarantee the mortgages of such borrowers for several years.

Good people have bad things happen to them, so how do you find those people and reach out to them?

 

 

 

Who are the Foreclosure Victims?

With so many foreclosures going on all over the United States, some very important questions are being raised. Who are these people? What did they do to get in such a desperate situation? Is foreclosure due to their own incompetence and lack of financial education, or is there more at work here? Why do a few of them find some way to stop foreclosure, while many others are losing their homes and renting an apartment after it is all over?

There are no simple answers to these questions, of course, but the trend is to label foreclosure victims as either the innocent victims of banks, mortgage brokers, and real estate agents, or as consumers too greedy and lazy to read the mortgage paperwork that set out all of the traps in front of them that they are now walking straight into. In fact, though, both of these perceptions are wrong, and homeowners in foreclosure face financial hardships for numerous reasons. But let’s meet some of these people and see if their hardships can teach us anything about the current state of homeowners and consumers in general in America.

They are the people who lied on their mortgage applications in order to afford those $300K and million-dollar homes, when their real incomes would only qualify them for houses one quarter of the size they ended up purchasing.

They are the people who bought a new SUV last year to replace a smaller SUV that was only three years old, in order to keep up with their neighbors next door and across the street who had one year old SUVs.

They are the people who continue to finance their own hardships, by borrowing money on credit cards until no one will give them any more money, effectively tightening the noose around their own necks the longer they rely on debt. They know they are tightening their own noose, but they feel they have no other option at this point.

They are the people who have not taken care of themselves first, and are now facing huge medical bills that cause them to fall behind everywhere else, and they are now realizing their work health insurance, once a selling point of taking the job, has enough technicalities to prevent them from ever receiving real support from the program.

They are the people who bought these huge homes and did not realize simply how much it would cost to keep them warm in winter, and now they are faced with the choice of heat, eat, or pay the mortgage.

They are the people whose jobs were sent to India and China.

They are the people who borrow their conspicuous wealth from the same banks that finance the companies that outsource their jobs, but are not aware this is what their bank is doing to them, with their assistance.

They are the people who were given fraudulent appraisals that increased the values of their homes far beyond what was reasonable, just to increase commissions payouts for real estate agents and mortgage brokers, and create more paper wealth that banks could sell to hedge funds.

They are the people who did not realize that having children is very expensive.

They are the people who tried opening their own business and, for one reason or another, just could not keep up and had to confine themselves to the prison of wage slavery and give up their dreams of owning their own business and controlling their own lives.

They are the people whose parents needed extra care and had no one to take care of them after the government handouts ceased and health insurance would not cover their illness or disability.

They are the people whose children needed extra care and found that they could no longer sacrifice their family for work and their income decreased because of their commitment to their own families and children.

They are the people who are now hoping against hope that the government will swoop down and come to their aid, not realizing that it was ineffective government policies, poor economic oversight, and a revolving door between big banks and big government that created the conditions under which so many foreclosures could take place at once.

They are the people who get up every day, just like you and I, and succeed some days, fail others, and make their own decisions in life and learn from the consequences of those decisions, or are doomed to repeat the same mistakes endlessly.

They are the people who, hopefully, once they face foreclosure, realize that family and community are more important than owning the biggest house or competing with coworkers for the most debt or the least-efficient SUV.

Homeowners face foreclosure for any number of reasons, all the way from unbridled greed to outdo their neighbors, to a sudden financial catastrophe that demands their urgent attention and too large an amount of money, regardless of how much they have saved and how prudent their spending habits have been. In finding solutions that will help these people prevent the foreclosure process from taking away their homes, condemning them will offer no benefits, short-term or long-term.

Although criticizing foreclosure victims may be fun and easy for some, while providing a scapegoat for declining home values nationwide, this does not provide effective solutions or a way out of the current foreclosure crisis. It is only with community support and involvement, with neighbors and families helping each other, that foreclosure can be confronted and homes saved. Foreclosure victims are just like all the rest of us, who can learn from our mistakes, financial and otherwise; they are not an aberration or abomination to be shamed, ignored, or made to feel guilty for hardships out of their control. Fixing the foreclosure problem is more important now than pointing the finger of blame, and will lead to more sustainable results in the future.