Citizens Reform Center

Posts Tagged ‘foreclosures’

It should be no surprise. With a severe recession coming on the heels of years of outsourcing followed by predatory lending of sub-prime mortgages, millions of people are unable to keep up with monthly expenses. The biggest expense is housing. Marketwatch.com has reported that James Saccacio, CEO of RealtyTrac, states that “in the long term, a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond, as lenders gradually work their way through the backlog”.

Foreclosures in California, Florida, Arizona and Illinois account for more than half the national total. According to new data released by Lender Processing Services (LPS), one in every 7.5 homeowners with a mortgage in the United States is either behind on their payments or in foreclosure. This equates to a record high 13.2 percent of the nation’s home loans.

Along the same lines, bankruptcies are also at record levels. One of America’s favorite vacation places is experiencing serious hardship, which can be viewed as an economic indicator. The Las Vegas Review-Journal is reporting that bankruptcy filings in Nevada were up 58.6 percent in 2009. Bankruptcies in the state rose to 29,170 filings from 18,389 in 2008.

It’s hard to know what’s worse, the current rate of foreclosures or the impossible prospects for job creation that would generate the necessary level of employment and decent income to enable people to end this downward spiral. The redirecting of Wall St. bonuses to a serious job stimulus would likely find mass appeal at this point.

Read more here.

We all know that joblessness has hit double digits. We know the official rate is far below the actual jobless rate when you take into account people who have stopped filing for unemployment benefits. Just as significant, if people are able to find work, the jobs will almost definitely pay less than what was available in the past. However, the cost of living continues to go in the opposite direction — higher. No wonder people with jobs are working more hours than ever and barely staying afloat. A high percentage of college students were enticed by credit card’s lure of easy money can’t find work and are unable to keep up with payments. This all translates into record levels in credit card and mortgage defaults.

Just do a Google search on “credit card default rate 2009″ and 4,710,000 pages turn up. You’ll learn points like the following:

• Advanta’s default rate more than doubled in June from May to 56.95 percent, and they’ve shut down lamost 1 million accounts after posting three quarterly losses. In Nov. Advanta filed for bankruptcy. This came just after another lender to small business, CIT, filed for bankruptcy.
• We know credit card companies have jacked up their interest rates sky-high to 32% and more. Since the new Credit Cardholders Bill of Rights Act takes effect in Feb. 2010, banks have done all they can to pre-emptively gouge the consumer.
• In August it was reported that Canadian credit card default rates hit record levels. Obviously, this economic strain has hit almost all “first-world” countries.
• In August it was reported that banks were cutting credit limits for 58 million card holders.
  According to the LA Times, in August mortgage default rates soared to 13%.
• The third-largest issuer of Visa credit cards, Capital One Financial Corp. (COF) stated a rise in its net annual charge-off rate to 9.60% in Nov 2009 from 9.04% in Oct 2009. See more figures in this Reuters article.

Throughout the spring and summer articles report that default rates by major lenders increased. This is all the more reason to learn what CRC has to teach about the true nature of banking and debt, as well as what you can do if faced with debt collection actions or foreclosure. Learn how members are being successful in stopping these collections and foreclosures. Also, being part of an excellent support network is key. Having the right knowledge and connecting with the right people will make all the difference.

If you’re in search of knowledge and support, find out how you can become part of CRC’s Legal Club.