Foreclosures

The foreclosure processes which has been sparking controversial and judicial statements in many areas typically mean that a lender who has not received the mortgage of his property from the borrower for more than 90 days.

This foreclosure process has enabled a lender to take judicial and non-judicial action which has resulted in pure eviction of the borrower from the former’s property.Sometimes, a lender may also take to notice a certain strategic default which typically is interpreted as the borrower who is capable of paying the mortgage but is atypically trying to avoid the situation.

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Accordingly, there has been quite an authentic research provided by Von Furtstenberg, (Jung, 1962, Page, 1964, Von Furtstenberg, 1969; Von Furtstenberg, 1970a; Von Furtstenberg, 1970b; Von Furtstenberg, 1974) who has stated that there is a keen relationship between the interest rates and the loan to value ratio. He has determined that the higher the interest rate and the higher the loan to value ratio would ultimately result in strategic defaults in foreclosure methods.

The study also showed the main variables that were keenly used by previous researchers and has arisen to the fact that there had been a complimentary increase in foreclosure methods in a typical area; whether the area includes urban or rural properties. It also may support the prevalence of unemployment in that area.

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Many micro studies have initiated the fact of taking the log of the number of housing units which helps them to determine the actual number of housing units in that area. However, the number of mortgaged units could not be determines but in such a case, there has been linkage within the number of housing units of that area.

Also, many studies use the age of mortgage, refining of loans, prepayment penalties and the interest rate as important variables.

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