The F Word: Foreclosure
Foreclosure occurs when a home owner can no longer make payments on their mortgage and defaults on the loan. This usually occurs after several months of missing payments. The bank then legally obtains the home, forces the occupants to move out, and sells the house at a public auction. The bank actually loses an average of $50,000 every time this happens, so it is definitely not something that either party wants. It is still quite common, unfortunately, and today happens to 1 out of every 200 Americans. The heat map below shows just how common it is.
September 2009 Foreclosure Rates, courtesy of RealtyTrac
The subprime mortgage crisis ended with an unprecedented number of people losing their homes. If you are worried about a possible foreclosure in your future, there are things you can do to possibly prevent it from happening, which you can learn about by reading my article on how to stop a foreclosure.