Well the September foreclosure figures are out from RealtyTrac. And while we can look at the big, really big number and compare it to foreclosures a year ago that does not give a real understanding of the fear and loss experienced by over 81,000 families that month.
Maybe there is some hope headed down the road for homeowners that will soon be heading into trouble. The FDIC (Federal Deposit Insurance Corporation) is making grunting noises to the Senate Banking Committee and the Treasury Department that a way needs to be found to prevent avoidable foreclosures.
Delinquent mortgages, like credit card defaults, do not have to turn into a financial train wreck if lenders would simply evaluate a consumers situation and modify the credit card balance or mortgage terms to fit within the new circumstances.
RIght now homes are being foreclosed on and many are headed into bankruptcy and neither of those situations needed to come to that end with a little cooperation from lenders.
Shelia Bair, the head of the FDIC recently said that “Loan guarantees could be used as an incentive for servicers to modify loans,” Bair said. “Specifically the government could establish standards for loan modifications and provide guarantees for loans meeting those standards.” That way, she said, “unaffordable loans could be converted into loans that are sustainable over the long term.”
That is good news and I hope that it actually happens.