The Federal Deposit Insurance Corporation (FDIC) has compiled information from different sources on the rate of foreclosures in America and the outlook is not promising. According to the report, the Mortgage Bankers Association (MBA) reported that every three months 250,000 families enter into foreclosure in the U.S. That translates into one out of every 200 American homes. Mortgage default has reached epidemic proportions in our country and an ever-increasing number of families are facing homelessness or at least the loss of their homes and financial uncertainty.

U.S. Department of Housing and Urban Development (HUD) offers some tips to try to avoid foreclosure, they include:

HUD suggests that a borrower prioritize his/her spending if they are having distress keeping up with their mortgage payments. They recommend that the borrower’s first order of priority should be healthcare and after that, it should be to keep his/her home. They should review their finances to see where they can cut spending in order to make the mortgage payments. The individual should make a budget and sacrifice nonessential spending until he/she can catch up with the mortgage payments. HUD also recommends sacrificing assets in order to keep the home. The liquidation of assets such as a second car, jewelry, or a whole life insurance policy can help reinstate the loan.Steps to Foreclosure

If a borrower defaults on his/her mortgage, the mortgage holder can typically initiate foreclosure according to the timeframe specified in the mortgage agreement. That period of time can vary but it will be specified in the mortgage agreement. There are two basic types of foreclosures recognized across the country but there are also regional foreclosures that are used in some jurisdictions. Most foreclosures are conducted in state or local courts but a few are conducted in Federal courts. A foreclosure is a legal action and all parties involved must be told, even though requirements for notification vary from one jurisdiction to another.

Any profits from the sale of the property are used first to satisfy any outstanding taxes then to pay the outstanding mortgage and any legal costs of the lender. After that any funds that are left are use to compensate other liens against the property. The borrower is allowed the remaining proceeds if there is any money left after all debts are satisfied.Types of Foreclosures

Hundreds of thousands of U.S. families are losing their homes to foreclosure every fiscal quarter making this a foreclosure and financial plague on our society that will be reeling for years to come. The FDIC published information from a study conducted by the Homeownership Preservation Foundation (HPF) on some of the reasons for the high rate of foreclosures in America. The study suggests that many U.S. households are at a financial tipping point and many families are on the verge of losing their homes.

The economic tipping points for American families in danger of losing their homes outlined by the HPF include:

The HPF estimates that forty-three percent of U.S. households live beyond their means and that nearly half of all homeowners in this country spend more than they earn. The foundation calculates that approximately fifty-two percent of American employees live paycheck-to-paycheck and that roughly forty-two percent of Americans do not have enough liquid assets to support themselves for the recommended three months should they have a financial crisis.

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Tagged as: Basics, Foreclosure, Process