Will More First Mortgage Defaults Lead To More Foreclosures?

Chicago saw the largest increase in first mortgage default rates as the rate for the country rose from 1.99 percent to 2.08 percent in October, United Press International reported on November 15, 2011. While UPI broke the news as “another sign that more foreclosures are on the way,” defaults on other credit categories declined.

Chicago’s increase was the biggest in moving from 2.47 percent to 2.64 percent, but Miami fell the most. David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices, told UPI that the 4.16 percent in South Beach was “well below the near 19 percent it had registered a little more than two years ago.”

“Home purchases are obviously very large investments, so first mortgage loans are substantially larger than any other consumer loan type,” Blitzer told UPI. “Consequently, when such a loan goes into default it is more serious from the perspective of the consumer’s overall financial status than the others.”

Troubles maintaining payments on mortgages lead many homeowners to consider bankruptcy . Do you think that an increase in first mortgage defaults will lead to more people needing foreclosure help ? Are you concerned that another wave of foreclosures could have an effect on your neighborhood? Tell us about your situation.

Benjamin Brand Services – Chicago bankruptcy lawyer

New Employment, Construction Reports Offer Hope

There were a couple signs of hope for the economy as new claims for jobless benefits hit a seven-month low and permits for future home construction rebounded strongly in October, Reuters reported on November 17, 2011. The Labor Department said initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 388,000, while the Commerce Department said permits for residential construction rose 10.9 percent to a seasonally adjusted annual rate of 653,000 in October.

While the news is not cutting into the 9 percent unemployment rate, Reuters noted that it was the second straight week that initial claims have held below the 400,000 mark “normally associated with some healing in the jobs market.” Furthermore, the four-week moving average of claims, considered a better measure of labor market trends, was the lowest since April after falling 4,000 to 396,750.

These figures would hopefully indicate more people getting back to work and hopefully less people needing foreclosure help . However, Reuters noted that there are still 6.77 million people who were claiming unemployment benefits during the week ended October 29 under all unemployment programs. Homeowners facing foreclosure because of a job loss need to understand that they still have options while the economy slowly makes a recovery. Let our Chicago bankruptcy attorney show you how you can keep your home and reestablish credit by filing Chapter 7 or Chapter 13 bankruptcy.

Benjamin Brand Services – Chicago bankruptcy lawyer

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