Foreclosures are legal actions through which lenders have the right to terminate mortgages before their terms are over should the debtors fall behind in payments or stop making payments for whatever reasons. Lately the rate at which homes are being foreclosed are increasing and their statistics are highly alarming.For these reason, careful interventions should be put in place to check this situation so as to avoid a crisis. In order to circumvent any problem it is always crucial to look at the causes of it all so as to determine the best cure for it.The following are the reasons believed to cause this increase:

Subprime mortgages

These are mortgages that are designed in such a way that they have a low opening interest which after a few years will change to higher values.These mortgages pose a threat since they are usually availed to people with low credit scores as the major recipients, which goes without saying that it might be impossible for them to pay the interest rates adjust.

Negative equity

The values of homes are overwhelmingly declining thus homeowners are finding themselves owing more than what the houses can fetch in the market thus their options are exhausted leaving them with foreclosures as the only viable option to solve their problem(s). This negative equity can be attributed to the prevailing economic downturn and the availability of very risky mortgages that have made it possible for people who initially could not qualify for the mortgages, to actually afford them.

Medical reasons

Unforeseen medical bills and maybe on top of that these people are not covered by health insurance. These medical expenses can lead to people abandoning their monthly payments to cater for illness such as cancer, diabetes, heart diseases and mental illness are among those that drain peoples resources and attention from other obligations and are stressful and even can disable people from working.


Losing a job and surviving on unemployment benefits or savings may have a constraining effect on the ability to continue being current on your mortgage payments as it is impractical to do sobecause of the sudden decrease in your monthly income which is coupled with unchanging expenses.


This is a reality issue that is so profound in the societies today that results in split ups of family households and can be a reason behind foreclosed homes. Due to the poor communication associated with divorces, this causes neglect and defaulted payments as well as the question of who will take over the payment of the house is also another challenge in question.


Actually 9% of the foreclosures are associated to have accrued from the basis of fraud that can be either on the borrower’s side or on the lender’s side. 


Death of the bread winner in a family can also be catastrophic to the surviving family members and the might lose their home to foreclosure if no one among them can work or to cure some of the default through life insurance proceeds.