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The year 2010 could be called “the year of the foreclosure.” The inventory of foreclosure properties spiked back then due to a spate of layoffs and continuing economic turmoil. Many previously credit worthy people defaulted on their mortgages – both homeowners as well as rental property investors. While 2011 seemed to show marginal improvement, the influx of the so-called shadow inventory served to dampen any positive economic impact.
The good news is that so far in 2012, the situation has continued to improve, albeit at a snail’s pace. The main reason is a renewed commitment from the government as well as the lenders to be more flexible and forgiving towards their delinquent debtors. They have offered to slash the principal amounts for those people who are finding it difficult to repay their mortgages.
One example of this changing attitude is Bank of America. In fact, Bank of America recently identified 200,000 borrowers who have qualified under this category. BOA is in the process of reaching out to these folks to alleviate their pains. And if making the payments is more than a person can afford, the bank might also agree to lower the interest rates. For more information regarding lending bank’s increasing willingness to work with delinquent debtors, click here.
The bottom line is that improvements are being made, which is better than seeing continued deterioration. Yes it’s going to be a long process, but as they say, slow and steady wins the race!