Step One is Creative Move in Foreclosure Debacle

RealtyTrac, the leading online marketplace for foreclosure properties, recently released its U.S. Foreclosure Market Report for April 2011. The report showed that there were 219,158 properties which filed some type of foreclosure proceedings in April. The proceedings included default notices, scheduled auctions and bank repossessions. This was a 9 percent decrease from March and a 34 percent decrease from April 2010. The report also showed one in every 593 housing units received a foreclosure filing during April 2011.

According to the Chief Executive Officer of RealtyTrac, foreclosure activity has decreased for the seventh straight month, bringing foreclosure to a 40-month low. He cautioned the slowdown was largely the result of massive delays in processing rather than a housing recovery. 

Since the downturn in the economy in 2007, mortgage companies have been dealing with an enormous influx of defaults and have responded with one of the greatest foreclosure debacles since The Great Depression. Few mortgage companies have been innovative, let alone creative, in their approach to handling the defaults. Their archaic approach has included stiff-necked resistance to loan modifications, a demand for their money, and negative view of consumers defaulting on their loans. This attitude has not only forced the loan companies to foreclose on their secured property, it has forced thousands of Americans into bankruptcy protection. 

The good news is there may be a new attitude about foreclosures from the loan companies. Their willingness, as feeble as it may be, to join the modern world of finance is somewhat hopeful. According to a news story posted on May 25, 2011, the Bank of America has decided to give away 150 repossessed houses in the Chicago area. 

This public relations move has come at time when the bank is doing something it claims it should have done a long time ago, open 28 foreclosure prevention centers in 22 states. Depending on the rules, this creative move could be step one in helping to solve the foreclosure debacle. 

Although consumers need to take personal responsibility for their home buying decisions, the mortgage industry also needs to admit their actions contributed to the current housing crisis. Banks, under pressure from regulators Fannie Mae and Freddie Mac, can do more to clean up their mortgage act. They can help lead our country to sound investment strategies. 

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