Miami Foreclosures Expected to Spike in Wake of Government Shutdown
Whether you like Obamacare or not, there is no denying that the government shutdown resulting from contention over the new healthcare law is going to hit home hard for millions across the country.
Our Miami foreclosure defense lawyers recognize that it goes beyond just the federal employees who aren’t currently receiving a paycheck. It’s going to impact the economy in a major way, as the ripple effect is felt throughout the service and retail industries that will see a marked drop-off in business.
Here in Florida, our tourism industry could tank. We will have fewer people taking vacations, making out-of-state business trips and purchasing second homes.
It’s going to mean a slow down in the real estate market in general, as people are going to hold off on seeking new home loans. That’s going to hit realtors, lawyers, mortgage brokers and others.
In the same way, we’re going to see many homeowners for the first time defaulting on their loans and suddenly facing a foreclosure. Plus, there may be snags in federal government programs that were initiated to help struggling homeowners. Already on the brink, these problems and delays could be enough to push people over the edge and force them from their homes.
Meanwhile, whatever housing recovery was underway is going to be slowed dramatically. A headline from ABC News in mid-September, prior to the shutdown, crowed, “Foreclosure Crisis Fading Fast.” The article discusses the big drop-offs in new homes entering the foreclosure market, as compared to what the figures were six years ago at the start of the Great Recession.
RealtyTrac reported that while there were 56,000 homes having entered the foreclosure process in August, that was an 8 percent drop-off from July and a nearly 45 percent drop from August 2012. Also, banks were selling more foreclosures, suggesting that these firms were more confident with the prices they could get for these properties, which are now more in line with the actual market value of the properties.
But just two weeks after that ABC report, CNBC reported that the government shutdown will inevitably be felt on the Main Street housing markets. Some have said that the result is going to be an essential “freezing of the pipeline.” People will be able to take out new loans, but without the IRS and Social Security Administration to provide certain verifications, closings can’t be finalized. It’s even worse for federal government workers, who are not only unable to work, but they can’t verify their employment on their applications.
The Federal Housing Administration is continuing to operate, but staff has been significantly reduced.
If the shutdown lasts long enough, it could also strike a blow to mortgage refinancing efforts as well, resulting in delays in rate locks and costing pricey extension fees.
In the meantime, we’re going to see banks filing foreclosures and credit card lawsuits in record numbers. For the most part, those cases will end in default judgments because many homeowners don’t bother to fight back.
We want you to know that you do have options. We’re here to help.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.