While reports suggest that the economy is on an upswing, new research also indicates that foreclosures may be on the rise in Cleveland and throughout Middle Tennessee. The continued debt crisis, compounded by unemployment, has left millions of Americans struggling to pay their mortgages. The rocky economy as well as changes in foreclosure law could impact the housing market through 2012.
Since the first wave of foreclosures, banks have been more heavily scrutinized for improper and illegal actions. It is often the case that there is not enough documentation to support a foreclosure. As regulators have been more thorough in investigating and reviewing lender actions, banks have taken a longer period of time to take control of property. Due to this delay, it is projected that 2012 will bring a new wave of foreclosures, further depressing the housing market, even as other signs trend towards an economic recovery.
A $25 billion dollar federal mortgage settlement involving state attorneys general and lenders has formalized foreclosure proceedings. Experts anticipate that clearly defining these rules and regulations will help to streamline and clarify the process in the future.
While 2011 may have seen a decrease in foreclosures because of delay, 2012 could mean a 15 percent increase in foreclosures. For those who do want to protect their home against foreclosure, Chapter 13 is an option. Bankruptcy immediately halts any creditor action. It also gives homeowners the opportunity to negotiate a mortgage modification or establish a manageable payment plan to reduce or eliminate debt.
The Tennessean, “Middle TN may see second wave of foreclosures,” Bobby Allyn, March 19, 2012.