Foreclosures are rising in the USA, and repossessions in the UK. In fact, the amount of homes repossessed in the UK this year is likely to exceed 75,000 - more than double the amount in 2008. There are a number of reasons behind the rise, not least of which are the tracker mortgages which reset to higher rates after a grace period, meaning many are in houses they are unable to afford. These mortgages are similar to the Option ARM mortgages in the US, whereby a low introductory rate was offered and then the rate rose at a later date. Unfortunately the intention of many of these mortgages was to refinance the mortgage when the original reset. Oops.
House prices have fallen, the banks have all gone broke and we are seeing a return to rational lending practices. Which means anyone who had intended to refinance these mortgages, is, to use a technical term, shit out of luck. In the current market, poor credit refinancing is hardly an option. Realistically, the options for those with bad credit being able to refinance their loans are slim to none. Hence the prediction of one of the largest amounts of repossessions and foreclosure, both in the U.K. and the U.S.A. this year and next.
House prices have fallen, the banks have all gone broke and we are seeing a return to rational lending practices. Which means anyone who had intended to refinance these mortgages, is, to use a technical term, shit out of luck. In the current market, poor credit refinancing is hardly an option. Realistically, the options for those with bad credit being able to refinance their loans are slim to none. Hence the prediction of one of the largest amounts of repossessions and foreclosure, both in the U.K. and the U.S.A. this year and next.
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