"Counselors Seek Ideas to Slow Foreclosures"

This article popped up this morning in some of the morning articles I read with regards to real estate. I found it interesting. With the number of foreclosures on the rise, I think education is an excellent idea.

Wisconsin Dells Events (08/01/07) Krejci, Anna

A recent Wisconsin Collaborative for Affordable Housing conference featured a brainstorming session in which financial counselors, representatives of various state government organizations and other professionals discussed ways to prevent foreclosures. According to ForeclosuresWI.com, the number of foreclosures in the state has risen 23 percent since the first of the year. In Columbia County alone, there have been 124 foreclosures filed so far in 2007. Dialogue at the conference centered on offering post-purchase programs for new homeowners, along with recognizing and developing future funding sources to help in preventing foreclosures. Some even suggested rewards or coupons for Home Depot and other home improvement retailers as incentives for new buyers to attend post-purchase programs. Among those in attendance at the conference were Morris Reece, director of Fair Housing for the city of Racine; Noel Halvorsen, executive director of NeighborWorks Green Bay; and Diane Schobert of the Wisconsin Housing and Economic Development Authority. Reece blamed the recent rash of foreclosures in Wisconsin on first-time buyers being rushed into making a purchase. Halvorsen, meanwhile, supported the idea of ad campaigns designed to educate the public on the demands of homeownership.

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I think there are a lot of home buyers who don't realize what they're getting themselves in to when they purchase a home. Unfortunately, there are also a lot of home OWNERS who don't understand how to effectively manage their money either. . . . .which is a factor contributing to the growing number of foreclosures as well.

People take second mortgages, home equity loans, lines of credit & the like from the equity in their house with the feeling that it's "free money". What they fail to understand is that there is no such thing as FREE money. Suddenly they can't pay that money back and the bank comes looking to collect on the loan. . . . .to take their house.

In this article the director of fair housing for Racine blames the up rise in foreclosures in Wisconsin on first time home buyers being "rushed" into a purchase. Again, education is needed. The first time home buyers I've worked with lately tend to take what the bank has to say they can afford at full value. They don't factor in the costs of owning a home. . . . they just see the dollar amount they're told they can afford, what that price point of a house looks like, and they go for it. After all, it's an "investment" right? "Rushing" has nothing to do with it. . . . . . .they're simply not educated on the bottome line, what it's going to cost down the line.

I think education starting with the lending industry is a must. Again, not all these foreclosures we're seeing are "first time home buyers", but most of them are "uneducated" from the standpoint that they don't understand the mistakes they made in order to get where they are. Perhaps it's time we do something to help solve that problem before we're ALL paying.