Can payday loans help you stave off foreclosure? Home foreclosures are finally gaining some much needed attention. On Wednesday, Rep. John Conyers Jr. (D-Mich.) introduced a new version of the bankruptcy expansion proposal in the House of Representatives. This proposal would empower bankruptcy judges with the discretion to reduce payments and principal for homeowners with troubled mortgages, waive payment penalties, stop or modify the interest rates on adjustable-rate mortgages and to extend the length of mortgages to 40 years.
Good news for struggling homeowners.
This is good news for homeowners who are suffering during the current recession, taking out payday loans just to hold off the foreclosure beast. Just a few weeks ago a similar plan was struck from the federal financial bailout bill.
Foreclosure and unemployment statistics are staggering.
According to Foreclosure.com, as of today’s date, pre-foreclosures are at 483,470; sheriff sales are 32,312; foreclosures are at 546,488; and bankruptcies total 280,363.
Adding to these staggering numbers, are the current unemployment rates. The Department of Labor reported last week that employers cut 533,000 jobs in November, and that the unemployment rate has reached 6.7 percent. This rate would have been much higher but for the fact that 400,000 Americans have stopped looking for jobs, and therefore were not factored into the labor force.
The Labor Department estimates that companies eliminated 1.9 million jobs this year. Thursday the Labor Department stated that unemployment applications for jobless benefits rose to 573,000 for the week ending December 6th. The number of people taking out payday loans is also increasing.
Foreclosures are bad for everyone.
The cost of home foreclosures causes banks to take a major hit as well. There are all kinds of statistic floating around as to the average cost for a bank to foreclose on a home. Basically, it all depends on the location of the home and the bank. Average statistics seem to be around 50,000 to 70,000.
Will re-negotiated terms increase bankruptcies?
Some might say that allowing judges to re-negotiate the terms of troubled mortgages will open the flood gates of bankruptcy courts, however, you might be surprised. After all, if the banks know that bankruptcy judges have the power to re-negotiate the terms, banks might be more willing to take a pro-active approach in re-negotiating the terms directly with the homeowner before a troubled home owner even takes the first step towards filing bankruptcy. If you need to stall another month while this all sorts itself out, payday loans are available to help.
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I didn’t know that the unemployment rate had gotten to be this high and the scary part is it would be higher if it wasn’t for the fact that so many workers have just given up looking. Mortgages are also being renegotiated which is a good thing because anyone in their right mind would have known that the rate they were allowing customers to buy at was ridiculous and should have never been allowed.
Getting the judiciary on the side of the consumers instead of the lenders is a great idea. Recessionary periods are when keeping the income stream coming into the financial sector, and massive foreclosures are not the way to achieve it.