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HOPE NOW: Servicers provided nearly 1.2 million loan workouts since July 2007

National Mortgage Professional
Apr 10, 2008

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.
Published
Apr 10, 2008
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