Three Major Reasons Why the Foreclosure Crisis Should Bother You

Unless your own house is going into foreclosure, you may not be worrying about other homeowners’ plight while going through the process of foreclosure.

If you are safe, why worry while others get eaten by sharks? Unfortunately, it can affect you, even if it isn’t so obvious at first.

People need to be made aware of the dangers that foreclosed properties can bring to a community. Once you are aware of the potential problems, you should try to help struggling homeowners or at least donate to organizations that provide aid.

Here are three major reasons why foreclosure can affect you and your family:

1. Your house could be worth even more today if there were fewer foreclosures.

The good news is that home prices are going up and there is relief for many underwater borrowers. However, just because things are looking up doesn’t mean that there still aren’t any after effects from the bursting of the housing bubble. There are still tons of people who owe more on their houses than they are worth and these people could go into foreclosure. There are already a good number of foreclosed houses. When foreclosed houses start to crowd a community, they can attract crime, vandalism and look unattractive to people looking to move.

2. Securing a decent home loan today can be hard.

When the economy was good, homeowners took out home loans that they probably wouldn’t be able to afford. It turns out they really couldn’t make their payments, resulting in more foreclosures and underwater borrowers. Today, it is harder for borrowers to get good interest rates and mortgage lenders, like Freddie Mac and Fannie Mae, are making it harder to accept applications for mortgage loans. This is because so many people caused their profits to decrease.

3. Bank regulators are less apt to help out homeowners.

The recent foreclosure abuse settlement and other kinds of wrongdoing done by lending institutions is a good indicator that bank regulators aren’t as aware as they used to be or care as much. They did not make sure that mortgage companies were treating homeowners fairly. This definitely could affect you, especially if you own a house.