The mortgage crisis may be behind us, but homeowners are still feeling the pain.
More than 1 million properties in the U.S. are in some stage of foreclosure. In fact, in July, the number of foreclosure filings actually increased 2 percent from the month before.
Some states are still in crisis mode. For example, in the state of Maryland, one out of every 553 homeowners is on the path to losing his or her home.
Financial literacy is low. Only 40 percent of Americans say they have a budget and keep track of their spending. If families can’t handle their day-to-day spending, financial disaster is merely a matter of time.
When a family loses their home to foreclosure, not only are the dreams of that family put in jeopardy, but the community takes a financial hit. The entire mortgage industry feels the consequences as loans are defaulted on and fewer people can qualify for new homes in the future.
So how can we solve this dilemma? The average person needs guidance and direction to better understand what they can do to avoid foreclosure. Once they experience financial troubles, people need someone to guide them through the process of getting help. It is up to lenders, government agencies, businesses and non-profit homeownership organizations to work collectively to make sure that gets done by:
Emphasizing the value of financial education and counseling. Homeowners who are better able to manage their money are less likely to experience a financial crisis.
Educating people on government resources. Many homeowners don’t know about sources of aid such as the federal government’s Making Home Affordable Program and the FHA pilot program Homeowners Armed With Knowledge (HAWK). The Making Home Affordable Program has saved homeowners on average $500 per month, and HAWK makes first-time homebuyers eligible for mortgage insurance premium reductions if they participate in a comprehensive housing counseling process.
Publicizing homeowner events. Homeowners are often unaware of events that are designed to help them save their homes and avoid the foreclosure process. For example, HomeFree-USA will be hosting a More Help for Homeowners event on Sept. 18 to help struggling homeowners gain piece of mind and speak with mortgage servicers if they are behind on their mortgage loans.
While the mortgage situation isn’t as perilous as it was a few years ago, there is still plenty to do to ensure that ALL homeowners experience financial success.