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Foreclosure Starts Hit One Million

According to the D.C.-based nonprofit homeownership research and advocacy group the ""Center for Responsible Lending"":http://responsiblelending.org (CRL), a dismal milestone was reached over the weekend - the organization says one million new foreclosures have been filed so far in 2009.
CRL's news comes on the heels of last week's first quarter 2009 National Delinquency Survey by the Mortgage Bankers Association, showing that 12 percent of all mortgages are now delinquent - the highest level since the industry trade group began compiling delinquency numbers 37 years ago.
Michael Calhoun, president of CRL, called the rapid escalation in foreclosures alarming. ""It's easy to think, 'Well, that's tough luck for the families that lose their homes.',"" Calhoun said, but he cautioned, ""The truth is that foreclosures are costing neighboring families hundreds of billions of dollars and dragging down the entire economy. Foreclosures started today's crisis, and foreclosures will keep the crisis going if this epidemic continues.""
The Center for Responsible Lending projects 2.4 million foreclosure starts in 2009. The organization warns that these foreclosures will reduce the property values of some 70 million nearby homes by a total of $502 billion - about $7,200 per family. Through 2012, CRL said, these numbers will rise to at least 9 million foreclosures that will cost 92 million neighboring families $1.9 trillion in lost home value.
The center points out that the industry's track record proves loan modifications that fail to lower a homeowner's monthly payments are not likely to succeed. The Obama administration's foreclosure relief plan, however, includes stronger incentives for servicers to pursue more sustainable loan repairs. And CRL says these new guidelines encourage earlier intervention and loan modifications more likely to reduce monthly payments -- tools designed to stabilize the housing market and keep people in their homes.
CRL points out though, that while the industry waits for the next wave of mortgage modification programs to be put into place, a new foreclosure starts every 13 seconds - tallying nearly 6,500 each day. The organization has sent out an urgent call to lenders and loan servicers, ""to work with homeowners in good faith to dramatically increase loan modifications that actually stop foreclosures and keep people in their homes.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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