Reports have indicated that home loan defaults for December 2010 were lower than the previous month, which is a hopeful sign to many that consumers are beginning to improve in their financial position and, as a result, it’s hoped that overall economic conditions may begin to show similar signs of restoration. While there are those who argue that defaults and foreclosures on home loans may continue into 2011, it’s hoped that default and foreclosure prevention plans will offer the assistance that homeowners still need to get back in a financially stable position and avoid the loss of their home or miss payments.
According to a report on Housingwire.com, primary mortgage default rates for December were 2.93% and for seconds mortgages 1.74%. These numbers dropped from November, but many feel that the rise in defaults in November may have been an anomaly and a decrease in defaults in December may not be as positive as some may feel.
However, there are still opportunities for homeowners to avoid defaulting on their home loan through various assistance programs and refinancing opportunities for more affordable monthly mortgage payments. Homeowners, throughout 2010, used either home loan assistance from federal default programs, proprietary modification plans, or other foreclosure prevention efforts as a way to gain the affordability they needed to avoid the loss of their home, but low mortgage rates also allow for an environment where homeowners could refinance to meet their financial needs.
Obviously, modifications have been a popular choice among homeowners who feared defaulting on their home loan and are in need of some form of assistance, but there are also housing counselors which have been beneficial for homeowners who were in a troubling financial position. Also, homeowners who had been able to take advantage of record-low refinancing rates in 2010 may still be able to see a drop in their home loan interest rate by refinancing, despite the fact that there are predictions interest rates may increase in the new year.
Opportunities to gain more affordability in one’s home loan and avoid defaulting will depend on a homeowner’s financial position and their ability to qualify for this assistance plans, but advisers are still prompting homeowners to consult servicers or housing counselors if the need for more affordability arises. While modifications have, again, aided to distressed homeowners over the past month, refinancing may still offer options for homeowners to either lock in a fixed-rate mortgage which could bring lower payments or shorten their mortgage term so that their overall costs may drop.
The opinions of analysts and advisers on home loan defaults and troubles which still remain do vary, but one area that these individuals agree on is that homeowners who may be considering refinancing or who fear defaulting on their home loan or facing other economic hardships need to take action sooner rather than later, as this obviously can lead to a higher likelihood of finding foreclosure prevention assistance and affordability options on their home loan.