Foreclosures are up nationwide, and will continue to rise as prices continue to go flat in many markets. For some, the problem is painful. Ask New Century Financial Corporation, the nation’s second largest subprime lender, who recently filed for bankruptcy. Ask the guy down the block from you whose house is in foreclosure.

Foreclosures are up nationwide, and will continue to rise as prices continue to go flat in many markets. For some, the problem is painful. Ask New Century Financial Corporation, the nation’s second largest subprime lender, who recently filed for bankruptcy. Ask the guy down the block from you whose house is in foreclosure.

Some pundits think the rising foreclosures will bankrupt our economy, causing pain for people who lose their business or job as a ripple effect of all these foreclosures. Others think that the rise in foreclosures is a healthy adjustment to the end of a long real estate boom, and is nature’s way of taking care of a free-market economic cycle.

Who’s right? Time will tell, but it’s alarming to see politicians trying to fix this problem. Here are some of their solutions.

Give People Money

Tax the rich, give to the poor. The federal government now wants to fund programs to help people stay in their homes.

Second foreclosure-prevention bill introduced in Senate

A new bill in the Senate proposes giving money to people who can’t pay their loans. We taxpayers are confused. If these people are in trouble because they never should have been given such a loan, why should taxpayer money be used to keep them in their homes that they could not otherwise afford?

Maybe someone in Washington has the answer to that question?

Regulate Foreclosure Investors

I have written extensively about the assault on foreclosure investors that have been initiated by consumer advocate groups, resulting in a tsunami of new “Foreclosure Protection” laws across the country.

A Review of the NCLC’s “Dreams Foreclosed” Report

While protecting innocent homeowners from unethical investors is a good idea, new legislation is not always the answer. Enforcement of existing consumer protection laws and prosecution under existing criminal laws is certainly a better option than creating new laws that limit the options of a seller in foreclosure. The best solution to a foreclosure epidemic is a free market that allows investors to gobble up inventory. By hamstringing investors with complicated, punitive regulations, it will only discourage transactions and result in more properties in lender inventory. More lender inventory forces them to sell at lower prices, which hurts the entire real estate market.

Stop the Foreclosure Process

The Government of the State of Massachusetts just handed the State Banking Division the authority to put up to a two month delay on any lender foreclosure. All a homeowner has to do is file a complaint with that office.

State Orders Foreclosure Delays

It is not year clear on how many lenders this will affect, but certainly this move is troubling. If the government’s action is based on a consumer complaint, what kind of complaint deserves the kind of government involvement that stops a lender from collecting on its debt?

Certainly, any homeowner whose legal rights have been violated under state or federal law can stop or delay a foreclosure with a court order.

Opponents, of course, will argue that since these people in foreclosure can’t afford lawyers, they won’t have the means to seek this remedy. Such is life, that people who are in debt can’t afford lawyers to protect their legal rights. Do people in $1,000,000 homes deserve the same protection as people in $100,000 homes? Do lenders and their shareholders have the right to foreclose and get their collateral back?

And, think about the next logical step… will the government stop allowing landlords to evict if the problem gets bad enough?

Stop the Lenders from Lending

Nobody can seriously deny that lenders got sloppy in how they lent mortgage money over the last 10 years. As a result, many people got into loans they couldn’t pay back, and we now see the consequences.

Conversely, with the exception of gross overreaching by mortgage brokers, it’s hard to deny that most people didn’t understand the risk involved in borrowing money they couldn’t pay back. If you buy a house with no money down and a negative amortizing loan, you are gambling that you will make more money in the future and/or the price of your home will increase. If you are wrong, you lose your home. That’s the gamble. It’s like Vegas, except for one thing – the house doesn’t win when the customer loses. Everybody loses, except the attorneys who get paid to foreclose.

Should the government stop lenders from offering “risky” loans? The answer, I believe, is emphatically “NO”. If lenders go too far, they suffer financially. Thus, the market will take care of itself, in that lenders who lose profits will tighten up loan regulations, and Wall Street will downgrade or reject portfolios of risky loans.

Before you get too excited by this last paragraph, I do believe that some regulation is appropriate to protect the consumers and shareholders from getting duped in the process. Additional disclosures to both homeowners and Wall Street investors are appropriate considering the large number of defaulting subprime loans. However, if people want to borrow money under risky terms and lenders want to lend under a high risk of loss, why should the government stop them? Pawn shops, check-cashing stores and used car lots all operate on a high-level of risk.

Step Up Enforcement of Existing Laws

Instead of stopping the business, I believe the government should throw money at enforcement. Prosecute the bad people and leave the options open for people who want to do business under their own terms. There are enough existing laws that give the state and federal prosecutors plenty of room to go after bad operators, and many of them already have.

The government can put bandaids on it, but only the market can solve it the foreclosure problem. When demand exceeds supply in a given market, prices will go back up, and people will have enough equity to sell their homes. Somehow, I don’t imagine people will learn their lesson and, thus will continue the same cycle in the future. But, most Americans believe it is not the government’s job to stop people from willingly doing stupid things.

When it comes to your financial decisions, be responsible, read the fine print, and remember… “buyer beware”.

Click Here for more info for Foreclosure Problem

Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.

There are just moments in a person’s life wherein he or she feels that a new beginning is crucial. Whether it is a bundle of bad moments with an ex-wife or husband, financial difficulties or loss of a loved one, sometimes one just needs to get away from it all. With these moments, one just needs to detach himself or herself from the relics of a bad past. What is one to do then? Sell the house, and start anew.

As in everything in this world, almost nothing comes as a piece of cake, even selling one’s property. It is a common misconception with first time homes sellers that the only way to sell one’s house is through hiring real estate agents or estate realtors. With real estate agents, you would have to pay extra fees and commissions for them to put up your property for sale in the open market. Also, it usually takes a while before you cash out. It could take as quick as four months or as long as 2 years. Meanwhile, you are paying commission fees, renovation fees, and mortgage costs. You would still have to pay maintenance to keep the place clean and attractive for prospect buyers or maintain them yourself for who knows how long. Little do you know that in keeping up with maintenance and pesky real estate agents, your lender has filed for foreclosure.

What is a foreclosure?

You apply for mortgage loans when you put up your property for sale. With mortgages, a lender loans you the money but this money is not given for free because lenders are not usually interested in procuring your estate/ house/ property/ land. With mortgage loans, you are required to meet mortgage outlays such as the initial down payments and monthly outlays. Initially, you would think that you could keep up with all these costs. On the contrary there are several uncontrollable factors that may come into play and may affect your disbursement power. One is the ratio of your income to the monthly rates. Moreover, employment is scarce and hard to hold on to nowadays. Another is that disasters and tragedies are unpredictable. The worst thing that could affect your mortgage payments is the flux in mortgage rates. These could all lead to a foreclosure. More often than not, foreclosures are tied up with repossessions. At the end, you not only lose your money, but your house as well before even being able to sell it!

Foreclosure Solutions

It is often not wise to avoid foreclosure by ignoring your lender’s calls and mail. This could just get you tied up with legal problems. A good way to prevent foreclosures is to know firsthand vital foreclosure information such as those found in your loan documents and your state’s foreclosure laws and timeframes. These could help a lot with avoiding foreclosures. The safest way in stopping a foreclosure is not to let it seep in at all! You do not have to have your house on mortgage and face foreclosure problems in the future. Cashout Options is a company involved in purchasing properties for whatever reasons, location and or state of condition. Cashout Options purchases properties directly from the home sellers thus eliminating the need for middle men such as real estate agents. No extra fees or commission costs are required. By filling out a free online request form, the company will assess your property and make an offer as quick as 48 hours to 7 days. The best thing about Cashout Options is that they give foreclosure assistance to those in dire need of it. People who are heavily indebted to their lenders can obtain foreclosure help from the company. The company is even willing to shoulder the remaining balance that you may have and help you move on with your lives. Depending on the case, the company has various foreclosure solutions to offer.