Foreclosures recently hit a four-year low but that doesn’t mean the decrease in foreclosures will last. Quite the opposite. The number of foreclosure proceedings begun in January leaped 28%. Although five banks made settlement agreements in answer to claims their foreclosure proceedings were unwarranted and too aggressive, foreclosures are expected to increase now that the settlement has been reached.
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Banks feel the barriers for foreclosure are behind them. Fannie Mae and Freddie Mac have instituted programs to bundle foreclosures for investment. Homeowners still struggling with the effects of the deep recession continue to fall behind on their mortgage payments. A government grant program was set up designed to help but it expires in 2013.
It’s also very difficult to catch up once homeowners get behind on their payments. Just as it takes making more money than the decline to restore a stock to its previous value, more money is required to make homeowners current on their loans. Unless banks are allowed to decrease the principal value of the homes, it is predicted the foreclosure crisis