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Foreclosure - the process of having one's property reclaimed by the mortgage financier as a result of non payments. There are several things that can be blamed for causing foreclosures. The number spot, however, belongs to negative equity while other factors can be listed as death, denial, illness, divorce and drugs. More recently, with the government basically at a standstill in regards to raising the debt ceiling the increasing rate of foreclosures does not look to decrease any time soon. Negative Equity Negative equity refers to the fact that due to declining prices the house or property is now worth an amount less than what it was originally paid for. Property is an asset that, under normal circumstances, increases in value, not the other way around. Unfortunately with a recession, the opposite has become the reality in many areas of the country. This is true of New Jersey, which is cited as being among the leading 10 foreclosure states in the U.S. As a result of falling prices, home-owners will find that they owe more on their home-loans than what the property is actually worth. These unfortunate individuals also do not have the options of refinancing or reselling as in the first case they are too deep in arrears to qualify and with the economic downturn they will not be able to resell and make a profit. Therefore, the only option left is to foreclose and as such foreclosures NJ are a common occurrence. Death The death of a primary breadwinner or the head of the household can significantly reduce the consistent income of the family, preventing them from meeting financial obligations; not least of which are mortgage payments. Not everyone has insurance coverage or sufficient to cover the needs of the remaining family members in addition to paying for the house. Denial When situations change such as through death or employment situations, individuals may become so despondent that they fail to function. They may realise that they can no longer afford to pay their mortgages but be too much in denial to let go of the home that they cherish and have gotten so accustomed to. Illness Major sickness and disease can cripple the finances of a household. Medical care can be costly, especially if long term care or surgery is needed. If the person who is ill is a main breadwinner, then this may contribute to the non-payment of loans. Divorce During or following a divorce, property may be put up for foreclosure if the two parties are in conflict as to who should live where. After having become attached a house, leaving it may be too difficult for sentimental reasons. The other party in the conflict may also be unwilling to continue making the monthly payments. Drugs A persistent drug habit can put many strains on the household finances. Addicts are more concerned about feeding their habits and often deplete all resources to get the next "fix". The bills will eventually pile up resulting in the foreclosure of the property. The effects of death, denial, sickness, divorce and drugs on foreclosures are experienced in every state, even those with a strong housing market. Click here for more information about bankruptcy attorney new jersey or bankruptcy attorney nj. Original Source: http://goarticles.com/article/7936281
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