The housing boom from about 2000-2005 allowed many people to get into homes that normally couldn’t.

This was mostly in part to subprime loans that allowed people with bad credit or who had a financially shaky past to get into homes that they couldn’t with more traditional mortgages.

There are many ways that subprime mortgages help people, because without them many would not be able to get into homes with normal loans. The problem is that many of these people are now falling behind on their monthly payments.

Many of these people also happen to be minorities.

A December 6, 2006 article by Vikas Bajaj and Ron Nixon of The San Diego Union Tribune, “Subprime loans going from boom to housing bane,” discusses how foreclosures and mortgage delinquencies are rising among these minority homeowners with subprime loans.

“In the housing boom of the last six years, millions of blacks, Hispanics and members of other minority groups achieved the dream of homeownership. While a steadily growing economy helped, experts say a new breed of high-cost home loans deserved much of the credit. Now, however, those gains are being threatened by those very same mortgages, many of them resetting to even higher interest rates.”

“Delinquencies and foreclosures, though still low by historical standards, are rising fastest among these borrowers, a group that is commonly referred to as subprime because they have troubled credit records or otherwise have difficulty obtaining a mortgage. There were almost six millions such loans outstanding at the end of June.”

Many of these people who are beginning to fall behind on their mortgage are concentrated in areas that are having other economic problems as well. Although most economists do not think that this will have a huge effect on our economy, there will be major problems for these specific homeowners.

“Housing advocates, regulators and lenders who have anticipated the problem are trying to pre-empt it by reaching out to borrowers before they fall too far behind on monthly payments. They are moving to help them refinance, sell their property or restructure their debts.”

What many of these homeowners do not realize is that the lenders and banks do not want to take their homes. Nobody wants to deal with a foreclosure, which just ends in lost revenue for everyone involved.

“The risk of losing a home is greatest for borrowers who face several hardships, housing experts say, not just a variable-rate loan. Rising interest rates will not by themselves force homeowners to default, but they will increase the risks for borrowers living on a fixed income, who do not have enough equity to refinance, obtain a second mortgage or who happen to be living in areas where home values are falling.”

Homeowners in these situations need to work together with their lender or bank and do all they can to stave off foreclosure.