Loan Modification Fails to Address Leading Causes of Foreclosure
The Boston Federal Reserve Bank has examined a couple of the leading causes of foreclosures across the country, and neither of these causes are the often-cited “unaffordable mortgage payments” due to adjustable rate loans. The two main causes of the high foreclosure rate and failure of loan modification programs are declines in property values and unemployment. The housing market bubble encouraged speculation and buying of properties (or second and third homes) as investments.
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