Foreclosure activity declined in the third quarter. This is a positive sign for the future of the housing market. Although foreclosure rates improved so far this year, there is still work to be done.
During the three-month period, foreclosure activity fell in 131 of the nation’s 212 largest housing markets, according to RealtyTrac. This may be the result of households getting a better handle on their finances. Others may be using an FHA and VA refinance to restructure their loans into more affordable terms.
“Two-thirds of the nation’s largest metros posted decreases in foreclosure activity in the third quarter, indicating that most of the nation’s housing markets are past the worst of the foreclosure problem,” said RealtyTrac vice president Daren Blomquist. “In fact foreclosure activity in September 2012 was below September 2007 levels in 58 percent of the metro markets we track.”
How to avoid foreclosure
In today’s housing market, mortgage borrowers have a number of ways to avoid foreclosure. According to the Department of Housing and Urban Development, two government initiatives are very popular. These are the Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP).
Under HAMP, borrowers can lower their monthly loan payments. Specifically, guidelines indicate payments should be reduced to no more than 31 percent of a borrower’s pre-tax income. Nearly 18 percent of homeowners who have used HAMP reduced their monthly payments by more than $1,000.
Meanwhile, HARP works in a similar way, but is often reserved for underwater borrowers. Millions of homeowners currently owe more on their mortgage than their properties are worth. This makes it difficult to qualify for a conventional refinance. HARP may be able to provide relief.
Arming yourself with the most up-to-date housing market details is a great way to stay informed of current mortgage loan rates. Freedom Mortgage offers some of the most extensive news, homeowner tips and personal finance information in the industry.
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