Foreclosure Crisis

AAA

DEFINITION of 'Foreclosure Crisis'

A period of unusually high home foreclosure rates that caused high uncertainty in the housing market from 2008-2010. During the crisis, the number of foreclosures rose so high that banks were unable to process all of them properly. In many cases, banks were so overloaded that foreclosure proceedings would not be initiated for many months after the homeowner stopped making payments.

INVESTOPEDIA EXPLAINS 'Foreclosure Crisis'

The process for recording the transfer of ownership for mortgage notes was overly lax during the housing boom, leading to difficulty in proving whether a bank even had ownership of the mortgage being foreclosed. Due to the widespread nature of these problems, banks halted all foreclosures in certain states for months until proper documentation could be assembled.

RELATED TERMS
  1. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  2. Ability To Repay

    An individual's financial capacity to make good on a debt. Specifically, ...
  3. Robo-Signer

    An employee of a mortgage servicing company that signs foreclosure ...
  4. Involuntary Foreclosure

    When a borrower defaults on a home mortgage loan and the lender ...
  5. Right Of Foreclosure

    A lender's ability to take possession of the property used to ...
  6. Foreclosure Buyout

    A refinancing program that allows a homeowner to avoid foreclosure ...
Related Articles
  1. Foreclosure Opens Doors For Real Estate ...
    Home & Auto

    Foreclosure Opens Doors For Real Estate ...

  2. Are You Living Too Close To The Edge?
    Budgeting

    Are You Living Too Close To The Edge?

  3. Saving Your Home From Foreclosure
    Options & Futures

    Saving Your Home From Foreclosure

  4. Subprime Lending: Helping Hand Or Underhanded?
    Investing Basics

    Subprime Lending: Helping Hand Or Underhanded?

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center