At the end of 2010, many experts were predicting the foreclosure and bankruptcy rates to continue to increase through 2011 and 2012. As 2011 finished up, we saw a slight decline in Americans filing bankruptcy. This also crossed over to the foreclosure rates. This makes many economists and experts question the reasons for this phenomenon. It’s pretty obvious that the economy is not rebounding like the media keeps telling us it is. According to the Department of Commerce, unemployment numbers are down to 8.1% as of last month. After digging a little deeper it became obvious that these numbers didn’t include a large group of people. This group included the 99 weekers, or otherwise known as the people whose unemployment has run out and still haven’t found a job. Then let’s not forget the self-employed and independent contractors. Different economic groups have put the true unemployment number between 13% and 21%. Then there are the group of people that have gone back to work, many of them have taken lesser jobs or the same job for lower pay. This doesn’t sound much like a recovery to me, but sliding down the muddy slope into bankruptcy.
After doing some research, I came to the conclusion that the reason foreclosure rates are down is because . Initially, back in 2008 when everything fell apart, banks were foreclosing on properties is fast as they could process them. What happened was, many of the banks were Robo Signing all their forms and not doing diligence to even see who actually owned the property. Prior to 2008, real estate paper was being bundled up and sold to hedge funds all over the world. Many of them broke up their bundles and sold them to different investors. With the notes being transferred numerous times, it was pretty hard to find out who was actually the lien holder on the property. In 2010, after being sued by a new group of attorneys that figured this out, banks decided to take a step back and make sure their i’s were dotted and the t’s were crossed. This gave many Americans some breathing room to stop foreclosure on their property they were behind on. So in reality, the foreclosure and bankruptcy filing problem still exists but it is just not rearing its ugly head yet.
People in financial trouble need to use this time to heed to the warnings of what’s to come. Just because the banks are waiting now, doesn’t mean it won’t be coming soon. There are many stories how people have lived in their home for up to three years without making a payment and have not gotten a foreclosure notice. It’s pretty obvious, the writing is on the walls and these people should be speaking with a bankruptcy attorney to make plans for what is to come.