Despite various efforts by state and federal governments to stem the tide of foreclosure, foreclosures are on the rise around the country. Calls for moratorium on foreclosures have gone unheeded, and the cycle of foreclosures continues to bog down the U.S. economy. CNN Money reports on the current foreclosure cycle:

"We have never seen a foreclosure cycle like this one
before," said Rick Sharga, Realty Trac senior vice president. Other
periods of elevated foreclosure rates have been preceded by signs of
economic weakness. However, "in this cycle, we have foreclosure
problems that have caused an economic downturn."

Why the foreclosures keep on coming

One of the major reasons that the foreclosures keep mounting, I think, has to do with the fact that right now programs are voluntary. Mortgage lenders don’t have to renegotiate terms if they don’t want to, and there are no government programs in place to force the issue. (John McCain wants the government to buy up the mortgages in trouble.)

Another problem is that, in some cases, the homebuyers are wholly unable to afford the homes they are in even with modified terms. Part of the reason some of them got interest-only and teaser-rate loans is because they couldn’t afford a traditional fixed rate mortgage in the first place. Others have since lost their jobs or had other problems due to the economy. These are causing a new wave of foreclosures that can’t really be helped because the ability to pay just isn’t there.

And some people just do not want to deal with their mortgages anymore. There are increasing instances of people simply walking away, refusing to pay anymore and just letting the home go.

With all of these factors at play, it’s no wonder that foreclosures are still creating problems.