No one wants to find their house among the home foreclosure listings that are generating fast across the country. It is an embarrassing and emotionally strained event for anyone to have to experience. Unfortunately, this is where a large number of Americans have found their dream of home ownership. The house that they worked hard for, saved for, and sacrificed for has been placed on an auction block. Not only does hit affect their status as a homeowner, but foreclosure also affects their credit score, in a bad way. Foreclosure makes it difficult to purchase a house in the future. The homeowner becomes a credit risk to any future lender.
It is a fact that many of the home foreclosure listings could have been avoided. The real estate crisis has revealed the unethical lending practices of mortgage brokers and lenders who were looking to make a fast buck. Many houses were sold to people who fundamentally did not qualify for the home under normal, ethical practices. The industry term is “liar loans”, where the income and assets of potential borrowers were inflated in order to get loan approval for adjustable rate mortgages (ARMs). This puts the onus not only on the borrower, but also the lender who gained the trust and confidence of the borrower
