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Why do people lose their homes in foreclosure?

bulletMortgage companies' willingness to lend 100 to 125 percent of the value of the home
bulletUsing overtime pay to meet mortgage payments, then the overtime stops
bulletJob loss and not enough savings
bulletPrices drop and insufficient equity
bulletMarital problems
bulletConsumer overspending
bulletBaby boomers taking care of three generations --    their parents, themselves and their children and not having enough money to do it
bulletLack of health insurance followed by serious illness
bulletDeath of providing spouse
bulletDrugs, alcohol or gambling problems
bulletLegal or tax problems
bulletExcessive borrowing to buy a home

You can reduce the risk of being affected by the above as the lender by never lending too much and never lending unless the borrower has a cash investment in their property.

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