Only a few pieces of data are necessary to confirm that the housing foreclosure situation in America is bad and getting worse. This depressing portion of our economy is impacting families in a terrible manner.
Consider the following: in the just past month of September 102,134 residences were repossessed in our nation by mortgage holders; in the first 9 months of 2010 there were 930,437 new foreclosure actions filed in our nation's courts; and pundits have estimated that there could be as many as 25,000,000 home foreclosures in America before the housing/real estate market recovers some stability.
The worse three states in this foreclosure mess are Nevada, Arizona and Florida.
The idea of a mortgage is rather simple. You obtain legal title to a home and you borrow money from a lender for any number of reasons from actually buying or upgrading the home to paying other outstanding obligations. You use the home as collateral for the loan and you agree to pay the loan back in designated installments. The loan documents you sign direct that if the loan is defaulted upon then you could lose the home through a mortgage foreclosure action.
A very bad economy, the like of which we are currently experiencing, always comes with a rash of new and numerous foreclosures. This economic truth is part of the capitalistic system which is an integral part of the American way of life. Some liberals would point a finger at this unfortunate aspect and complain, "The rich get rich and the poor get poorer!" Although this may be true, few if any other nations in the world can favorably compare to the standard of living the vast majority of Americans enjoy much less to the percentage of citizens that own ( or are buying ) a residence. This is true even today as we face over 10% unemployment; massive debt to foreign nations; and an economy the is at best stagnant.
Here is the problem. The government is getting involved.
All 50 states and the District of Columbia have begun investigations into the mortgage foreclosure segment of court actions. The biggest gripe appears to be the execution of suit documents and maybe even the actual ownership of the sued upon mortgage and promissory note. Several major players in the national mortgage scene have announced a suspension of the prosecution of pending foreclosure cases but only until procedural issues are examined.
There is no question that some foreclosure actions have been loose and sloppy but the vast bulk of foreclosures are simple procedures and handled correctly. Additionally, the primary mortgage companies do not rush to reclaim the liened property. The mortgage industry has been allowing, on an average, over 400 days of default before a foreclosure suit is filed. Every foreclosure action is monitored by the judge assigned to the case and no Final Judgment of Foreclosure is issued until the presiding judge is satisfied that the case has been proved.
Our court system is far too competent to allow any abuse by the mortgage industry much less significant abuse.
The real fear is government involvement. Any time a government agency, be it local, state or federal, involves itself in a matter the situation always gets worse. Every court system has built into its operations various steps that force a full and fair "day in court" for every person facing a foreclosure and eventual loss of a place of residence. It will not help our economy for bureaucrats to create pages of new rules governing the foreclosure of mortgages. These type of restrictions can only lead to a further decline in real estate activity and the availability of mortgages.
Don't be surprised by the government efforts to get involved in this foreclosure aspect of the economy. It is still the goal of all liberal/progressive/socialists to control all portions of American life and this is just another aspect in their goal.
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