Foreclosures to Reach One Million By End of 2008

The foreclosure crisis is continuing to widen, thanks to the perfect storm hitting the U.S. economy. "Almost a half-million Americans lost their homes to foreclosure in the first …

The foreclosure crisis is continuing to widen, thanks to the perfect storm hitting the U.S. economy. "Almost a half-million Americans lost their homes to foreclosure in the first half of the year, nearly double the same time a year ago. That’s six of every 1,000 households nationwide repossessed by the bank following foreclosure so far in 2008," according to a ForeclosureS.com press release.

“If the trend continues, we could see one million properties lost to foreclosure across the country by year-end,” Alexis McGee, president of ForeclosureS.com, said in the release.

"Pre-foreclosure filings already have surpassed the one million mark in the first half of the year, with 1,060,187 filings as of June 30, nearly double the 558,178 the same time a year ago," according to the press release. In other words, 14.6 of every 1,000 households nationwide have dealt with pre-foreclosure this year, up more than 87 percent from last year, according to the release.

Some form of foreclosure relief may be in sight, though its scope could be limited.

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"A foreclosure aid plan that was facing a sluggish trip through Congress has a powerful new engine behind it: the Bush administration’s urgent request to rescue mortgage giants Fannie Mae and Freddie Mac," according to the Associated Press.

"The House approved its version in May and the Senate followed suit [last] Friday, but a veto threat from President Bush and lawmakers’ disputes over key details were threatening to sap its momentum," according to the AP. "Now it’s clear the package — which also includes modernizing the Federal Housing Administration and creating a new regulator and tighter controls for Fannie Mae and Freddie Mac — has to move quickly."

The economy is the main concern for most voters, and this election season, neither party wants to be seen as not taking action to give help to Americans who need it. The bill in question could help an estimated 400,000 people in danger of foreclosure get new, cheaper loans rather than losing their houses.

The bill "allows the FHA to back an additional $300 billion in new mortgages so homeowners who can’t afford their payments and would normally be considered too financially risky to qualify could refinance into more affordable, fixed-rate loans," according to the AP. "The program would guarantee some payoff for lenders who took substantial losses on the distressed loans, in many cases letting them recover more than they could in a costly foreclosure."

Republicans who opposed the bill did soon the grounds that it essentially amounted to a bailout from the government for both borrowers and lenders who took more risks than perhaps they should have.

For more on this bill, see Foreclosure Bill And $300 Billion Housing Bill Could Pass, Thanks to Fannie Mae And Freddie Mac.

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