It’s Bad Now and the Immediate Future Doesn’t Look Much Better —
but Credit Unions Can Offer a Ray of Hope.
The numbers tell the story. And behind each number a real person or family is hurting.
In 2007, some 2.2 million U.S. households — one in every 100 nationwide — were facing foreclosure, up 75 percent from the previous year. According to real estate marketing company RealtyTrac, foreclosure filings continued to rise at the end of 2007, with December marking the fifth straight month of more than 200,000 foreclosures reported.
A collection of factors — rising unemployment, losses on Wall Street, a shrinking credit market, declining real estate values and unsound underwriting standards — have combined to turn an issue into a problem, a problem into a crisis. In a vicious circle, the billions of dollars in losses have resulted in lenders putting money out of reach for many borrowers who had depended on getting new loans or refinancing an adjustable mortgage before these loans reset at higher monthly payments. And lower appraisals on homes have also prevented borrowers from refinancing into loans with easier terms.