Delinquency and foreclosure rates are rising on subprime mortgages. As evidenced through the most recent results from the Mortgage Banker's Association National Delinquency Survey of first mortgage loans, foreclosure rates are on the rise. Currently, the national delinquency and foreclosure rates are dominated by four states: Arizona, California, Florida and Nevada.

Foreclosures occur when an owner is behind in mortgage payments and the lender initiates foreclosure action on the property. Foreclosures are devastating for the homeowners and unfortunate for the lenders. However, homeowners and lenders are not the only parties involved. Foreclosures also affect families with children living in rental units and set in place a negative spiral for at-risk neighborhoods. Foreclosures are harmful for borrowers, lenders, the neighborhood, and locality.

Foreclosures in Western states are increasing faster than in the Eastern US. Nationally, the number of foreclosures this March, 2007, was 47% higher than the previous year. Most experts agree that these high foreclosure rates are not likely to decline any time soon.

As this year has progressed, more and more individuals and families are being forced out of their homes by banks and lenders, yet half of the borrowers who enter into foreclosure never call their lenders. Sub-prime lenders are often cited as a big factor in raising the foreclosure rates due to adjustable rate mortgages and other forms of predatory lending. In addition, the lenders' attempts to auction off the wave of foreclosed homes as quickly as possible, to liquidate their falling mortgage assets, is pushing down home prices.

The real problem is that over the past four years, the government has been telling lenders that they've been discriminating against poor would-be home buyers, and that they haven't been making enough loans to low-income folks, or minority groups. At the same time, increased lending to households with limited financial resources raises the likelihood of higher default rates. While the impact will be felt most in low-income and minority communities, the national economy could also be severely affected if faith in the housing finance system falters.

The only good news is that an increase could mean lenders will work with homeowners rather than foreclosing immediately. Lenders contend they are helping borrowers work out troubled loans so that they can stay in their homes. Against a backdrop of rising foreclosures and increasing criticism over the way lenders are handling loan "workouts," housing advocates are stepping up efforts to prevent foreclosures that will lead to local residents losing their homes. Freedom Foreclosure Prevention Services (FFPS) is one of the leading companies in this field. Our primary focus is stopping foreclosure by using advanced loss mitigation techniques that help the homeowners and mortgage lenders reach resolutions, while keeping the best interest of the home owners in mind. With the state of the market, FFPS is recruiting thousands of consultants to keep up with the rising foreclosure rate. For more information on how you can do your part to help homeowners avoid foreclosure go to http://www.kpihomes.com .

As unemployment and mortgage defaults continue to rise, efforts to promote homeownership among low- and moderate-income households will only be successful if accompanied by measures to control default rates and increase cure rates for borrowers already reaching delinquency. With subprime defaults increasing and a grim forecast for the near future, many are calling for legislative changes to help keep Americans in their homes. Congress has addressed this issue through a number of hearings on the prevalence of subprime loans and the increased mortgage defaults and foreclosure rates that have resulted from their use.

The FHA has historically had a higher default rate because they loan more money to low income families than conventional financing. The way the FHA loan program is currently structured, FHA will give the lender back all of the money owed on the loan if the home buyer defaults. To qualify as a "high-default" lender, the mortgage banker must have a foreclosure rate that is at least 1. However, for all lenders who do FHA loans, the average default rate is just over 2.

Soaring foreclosure rates are sending states scrambling. No matter the reason, the fact remains that foreclosure rates are increasing drastically throughout the US. Other higher foreclosure rates are expected in generally high cost regions with or without minority communities. Foreclosure rates are expected to continue to increase as the subprime mortgage crisis continues.

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