Homeowners' troubles growMortgagePress.comforeclosure, National Foundation for Credit Counseling, new credit lines
Increased foreclosure pressure noted
There's a trend developing in the housing market, and it's not a
good one. The National Foundation for
Credit Counseling (NFCC) developed the Web site www.housinghelpnow.org to
provide consumers with an education resource site devoted to
housing. The site contains a self-diagnostic tool known as the
"Mortgage Reality Check." Through this simple test, the consumer
can answer a dozen questions and immediately be slotted into the
appropriate risk category for foreclosure.
Since its launch in October 2007, more than 4,000 consumers have
taken the test. Analysis of the most recent 30-day snapshot reveals
that consumers are experiencing an increased financial stress
related to foreclosure in every category. Observe the following
trends:
•Seventy-eight percent of the respondents said they had
trouble sleeping because they worried about their current financial
situation, the possibility of losing their home or car, or their
ability to use credit. This is an increase of 16 percent over the
November and December 2007 findings.
•Sixty-nine percent of consumers taking the poll said they do
not believe that refinancing their home will resolve their
financial dilemma. This is an increase of eight percent.
•More than half of the respondents, 59 percent, owe more on
their home than it is worth, signifying an increase of 11
percent.
•The category reflecting how many people had skipped paying
some bills in order to pay others grew by 10 percent.
The trend toward attempting to obtain new credit lines, but
being denied additional credit grew by eight percent, with exactly
half of those taking the quiz indicating that this has happened to
them. Seeking new credit could be an indication of how the consumer
is trying to stay afloat in these rough economic waters—he
has exhausted his existing credit lines, and to keep up his
standard of living, he applies for new credit. The fact that
additional credit is not available could point toward an increase
in future bankruptcies.
The most disturbing trend noted was in the increase of the
number of homeowners slotted into the red category, distinguishing
them as those who need immediate assistance to save their homes.
This category grew by 12 percent in just one month, reflecting that
83 percent of those taking the test fell into this most at-risk
group.
For more information, visit www.nfcc.org.
