Federal Reserve Says that Foreclosure not a Solution to the Housing Crisis

The federal government has been trying to come up with solutions to the housing crisis and curtail the overwhelming number of foreclosures.

Federal Reserve Chairman Ben Bernanke released a report to the leaders of the House of Representatives’ Committee on Financial Services arguing that relying on foreclosures to deal with troubled homeowners is “costly and inefficient” for the housing market, according to the Huffington Post.  Empty and neglected homes drive down market values further depressing the housing market.

The report instead states that lenders should aggressively pursue mortgage modifications for delinquent homeowners and servicers should be given incentives to seek alternatives to foreclosure. A foreclosure attorney can assist with a mortgage modification.

The report emphasizes the fact that foreclosed homes have a negative effect on all Americans and not just the ones losing their homes. Homes in the process of foreclosure drive down property values twice as much as a vacant property. Foreclosure attorneys can help people avoid foreclosure if they don’t qualify for federal foreclosure relief programs.

They feds are also weighing the option of allowing people to rent out the properties owned by Fannie Mae and Freddie Mac. Or allowing people to turn over their deeds to the bank if they cannot pay off their mortgage instead of going through the foreclosure process, called a deed-in lieu.

Millions of homes are still in the pipeline and headed for foreclosure. Delinquent homeowners have options to avoid seizure, which can be outlined by a foreclosure lawyer.