Foreclosures are definitely going to keep on rising, even with attempts by the government to bail out this situation. The biggest disaster would be if banks failed as a result of this foreclosure fiasco. Bear Stearns already collapsed under the weight of bad debt from houses that had to go through foreclosure proceedings. Most banks profits are at a standstill, or a 90% drop since last year.
Foreclosure is happening all over the United States and that is why it is so vital that you try to learn more about ways to prevent foreclosure from happening to you and your family. You should never take the loss of your home and major investment lightly. If you are buying a home in this rock-bottom market, make sure you factor foreclosure into your equation.
Careful forward planning will remove a lot of your financial worries and anxiety over owning a home, and given the economy going into recession, we should all definitely be trying to come up with some plans to help manage our bills each month and possibly even save ourselves some extra money. Put the plastic away, brown bag it for lunch every day, cut down on takeaway, or lattes.
Your home is the most important thing you own, but you don’t own it until you’ve paid every last cent on it. So you need to protect your investment in that home and avoid foreclosure. Stick to your budget and pay down debt, then remain debt free. Check your terms on your mortgage and find out if there are any penalties for early repayment (this might seem silly to you, but that is how the banks make their money, from all the interest you pay on the loan!) If there is no penalty, then go for it.
Even an extra $10 a month will help if it is the difference between being in debt for ages (think those minimum payments on your credit cards-again, they are making all their money from the interest you pay!) and getting out of debt as rapidly as possible.
If there is a penalty, once you are debt free, save that money in an interest bearing account, and start looking at safe short term investment opportunities, such as treasury bills, to keep growing your nest egg.
You might find that using these strategies, you can not only avoid foreclosure, you will be on the road to better asset management and true financial freedom.