Perfect Storm Brewing Trouble for Homeowners, According to HomeSavers USA
If the American Dream, is owning a home of your own, then the American nightmare might be losing it to foreclosure. And according to one expert, more families may be heading in that direction.
(PRWEB) October 30, 2005 -- If the American Dream, is owning a home of your own, then the American nightmare might be losing it to foreclosure. And according to one expert, more families may be heading in that direction.
“We haven’t seen this many separate troubling factors in recent memory,” says David Moakler, CEO of HomeSavers USA, a national mortgage relief center, which helped over 16,000 families stop foreclosure since 1993.
When evaluating the future financial health of American families, consider these 8 separate factors:
1)Heavy Job Losses- over 500,000 just from the recent hurricanes alone.
2)Heavy reliance on credit – each year, American families increasingly rely on credit to finance consumption lifestyles.
3)Lowest savings rate – For years, the percentage of family income saved for a “rainy day” has dwindled to record lows.
4)The Two Breadwinner trap – When both parents are already working to make the regular bills, there is little reserve capacity to beef up the income further with a part time job. If something bad happens, they borrow from credit cards to buy time.
5)Greenspan’s warning – The chairman of the Federal Reserve warned us of evidence of a possible housing bubble. If the value of housing should experience a sharp correction, many troubled homeowners will find it impossible to refinance their way out of a hole.
6)Recent popularity of adjustable rate mortgages – As rates dipped over the last few years, many families refinanced their homes into adjustable rate mortgages which can quickly climb with recent rate hikes.
7)New Bankruptcy law – The recent changes will, in many cases, restrict consumer relief from debt, and increase the powers of mortgage lenders to evict defaulting homeowners. Credit counseling centers, such as CCCS, may be overwhelmed with bankruptcy filers, reducing their capacity to make time to help homeowners.
8)Soaring energy costs – Not only found at the gas pump but also in home heat and power bills. Rising fuel costs lead to price increases on all consumer goods, due to increases in production and shipping.
According to Moakler, the increase in fuel prices at the pump are stealthy, in that many drivers don’t have a clear understanding of what they spend in a normal month. Although it may cost almost twice the amount to fill the tank each time, they are slow to make real effort to curtail their driving. The result? A surprisingly high credit card bill.
For more information and resources for relief, visit www.homesaversusa.com.
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