Myrtle Beach Foreclosures – Why People Have Trouble Getting Help

Myrtle Beach Foreclosures

Photo Courtesy of Williamor Media via Flickr

Thousands of homeowners on the Grand Strand are facing foreclosure. These counties include Myrtle Beach, North Myrtle Beach, Little River, Mt. Pleasant, Charleston, North Charleston, James Island, Murrells Inlet, Georgetown, Awendaw, Isle of Palms, Sullivan’s Island, Folly Beach, Kiawah Island, Hollywood, Ravenel, Beaufort, Bluffton and Hilton Head Island. And as if Myrtle Beach foreclosures were not enough, mortgage fraud cases have also occurred. What could be the reason why a lot of people are having trouble getting help to stay in their homes?

1. Foreclosure As A Widespread Problem

According to RealtyTrac, one in every 118 properties is in some stage of foreclosure in 2009. These people are victims of the economic downturn. According to the Treasury Department, about 1.3 million trial modifications have been made and about 460,000 of those have become permanent modifications since April 2009, but about 11 percent of those who got the modifications had defaulted again within nine months.

2. Foreclosure Process Is A Confusing Maze

A lot of people applying for modifications would fail. Often, default borrowers wouldn’t be able to get a modification until they had missed payments. At times, they would be asked to prove they would have to collect unemployment compensation for nine months to qualify for the loan, which is asking for the impossible. Recipients have to renew claims every couple of months and as such, they cannot prove they will collect unemployment benefits for nine months. Other reasons they would be rejected is because their debt-to-income ratio was above the 31 percent required by the Home Affordable Modification Program. While a $300 a month income would not be enough return to qualify either.

3. Government’s Foreclosure Programs Are Ineffective

Many homeowners face foreclosure because the government can’t get the lenders to reduce principal, especially on properties that had significantly dropped in value. Also, the response from the loan servicer are dependent in part on whether a homeowner’s loan was repackaged and sold as part of a mortgage-backed security, which would mean it is now owned by a group of investors, thus, limiting the ability of the bank on the modifications it can offer because it has to represent the interest of the bondholders. Had the banks or loan servicers been given different incentives, there might be more loan modifications and fewer foreclosures.

Myrtle Beach Foreclosures are just some of the many cases of foreclosures in the United States. Still, despairing is not the answer. Get help as soon as possible, weigh your options and act sooner because the sooner you do something, the bigger your chances of avoiding foreclosure.

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