August 31st, 2010 by Reed Allmand 
The truth is out, the housing industry is not recovering and the economy may be facing a double dip recession. Sales of previously occupied homes plunged to their lowest level in 15 years and that’s despite the presence of some of the lowest mortgage rates we’ve seen in decades. But what is driving this perfect storm of economic malaise? And why are the current conditions driving even more people into bankruptcy? Fear, unemployment and the mortgage industry’s resistance to change are three major factors driving the foreclosure crisis and the tsunami of bankruptcies hitting cities around the nation.
People are afraid, afraid of losing their jobs, losing their homes to foreclosure and not being able to sustain the payments on a new mortgage. This is why they aren’t buying the glut of houses on the market; but this is also why the mortgage industry has severely tightened their lending standards. The mortgage industry knows that unemployment, right now the leading cause of foreclosure and bankruptcy, is rampant and they are afraid of lending to the “wrong” people. But the irony of the mortgage industry’s stance during this foreclosure crisis is that they are primarily responsible for creating the quagmire that is currently crippling this economy. It is the mortgage industry that refuses to change, to modify toxic mortgages or to even untie the hands of the bankruptcy system so that bankruptcy judges can modify residential mortgages and save homeowners from foreclosure. But the other irony is that because the mortgage industry’s fear and resistance to change, even more homeowners are seeking the protection of bankruptcy. So many homes have lost significant value that many 2nd and 3rd mortgages are becoming unsecured debt and dischargeable in bankruptcy. In a twist of fate, this devaluation of personal real estate gives many homeowners the opportunity to save their home from foreclosure by using bankruptcy after all and many of them are jumping at the opportunity.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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