Loss of Income is Leading Reason for Foreclosure

While many people believe practically all foreclosures are the result of greedy borrowers who bought more than they could afford or proactively lied on their mortgage applications, according to a report by NeighborWorks, the loss of a job or reduced income is now the leading cause of foreclosures.

The organization, which administers the National Foreclosure Mitigation Counseling (NFMC) Program, said 54% of homeowners who received counseling via the program reported reduced or loss income as the primary driver of foreclosure.

“For the last year this nation has witnessed the highest unemployment rate and the largest number of job losses in over a generation,” said Ken Wade, CEO of NeighborWorks America.  “Our report proves what many already believed to be true – no longer are mortgage payment increases, or even health issues or divorce, cited as the top reason homeowners are facing foreclosure.”

Loss of income was cited as the top reason for foreclosure by 41 percent of homeowners in the October 2008 report, 45 percent in the February 2009 report, and 49 percent in the June 2009 report.

In our office at Home Solution Counselors a large number of clients report the same thing…loss of job or reduced hours.  While divorce is another driver which inherently reduces income the unemployment rate rising over the last year, it should be no surprise that loss of income is now the leading reason countless homeowners are facing foreclosure

If you or someone you know if facing a foreclosure or struggling to make ends meet with their mortgage payment please have them seek help early.  Texas foreclosure laws and procedures are not only quick but unforgiving.

-          The Bank Slayer