FORECLOSURES AND HOME VALUES IN WASHINGTON
As foreclosures influence falling home values in Washington, homeowners are currently watching more and more For-Sale signs sprout up in front of houses in their neighborhoods. In the past three months alone, approximately one million homes were foreclosed. Washington's housing market is following the trend of states like California, as home values fall due to foreclosures. [Reuters, 6/11/2009]
Skyrocketing interest rates caused by Adjustable Rate Mortgages shifting to exuberantly high rates have pushed borrowers into a corner. Many find that they owe far more than their home is now actually worth, and there seems to be not end in site. Home values are down 32 percent since the second quarter of 2006, and U.S. households saw $1.3 trillion of their wealth vanish during the first quarter of 2009 alone. [AHN, 6/11/2009]
As Washington housing prices continues to decrease, market competition likewise is thriving due the vast numbers of homes selling far below market price. Coincidentally, selling is no longer an option for these homeowners.
Inside this competitive and undervalued market, homeowners unable to refinance are now forced to walk away from their homes due to foreclosures. While foreclosures continue to impact the home values in Washington, loan modification is the only possibility for most homeowners to get out of their downward spiral.
The majority of Washington homeowners now qualify for hundreds of dollars in monthly savings with a loan modification under the Obama administration's "Making Home Affordable" plan. Thanks to the HAMP program, a homeowner's mortgage payment cannot exceed 31% of their gross income, and because most home loans exceed 31%, the majority of borrowers are eligible for assistance.
Washington homeowners facing foreclosure, or about to be, should immediately begin exploring all the options available to them.
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