CNN Money ran a story on August 31 about how the government's attempts to stabilize the economy by stalling foreclosures might actually be causing our ongoing woes. The article quoted housing experts as pointing out that about 37% of the borrowers who are in trouble haven't made mortgage payments in over two years, and another 34% are 12 to 23 months behind. Those experts who in the beginning warned that preventing foreclosures might only be prolonging the inevitable may have been right.
There are experts who disagree, however. Many point out that other methods of assisting troubled borrowers haven't been tried out on a large scale yet. Adjusting payments, forgiving a portion of the balance due and refinancing at a lower interest rate are all ideas that have been suggested.
My thought is, the best course of action is a combination;get the already-foreclosed properties sold, make the short-sale process faster for those who are too far behind in their payments, and help those who can still catch up.
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