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Shutdown increases homeowner foreclosure rates

The federal budget crisis may have had an unexpected side effect; it appears that an increasing number of homeowners in the Washington, D.C., suburbs are facing foreclosure because they could not pay their mortgages during the shutdown. Even though default numbers fell throughout the country, initial filings for foreclosure more than doubled in at least three counties surrounding the nation's capital.

Officials say that the most recent budget crisis was just a continuation of other financial woes that have plagued federal workers in recent months. Furloughs began as early as June for some workers, who were further devastated by the wide-reaching shutdown of many government agencies. Even though the shutdown has been stalled for several months, partial closures could have drastic effects on homeowners throughout the area; a shutdown may occur again when the budget comes up for consideration in the very near future.

Experts report that the Washington economy has suffered because of the government shutdown, and foreclosures are expected to continue to rise in the coming months. Maryland seems particularly hard-hit by the financial constraints, with a rise in initial foreclosure filings that was eclipsed only by Maine during the month of September. Maryland's foreclosure proceedings admittedly take longer to process than most other states'; even so, experts say that the rise in foreclosures can be tracked to the beginning of the sequester, which occurred earlier this year.

Further economic woes may be on the horizon for the region, as small- and medium-sized businesses are feeling the pinch of a down economy in the area. Experts say they are certain that government workers are suffering, and that effect is trickling down to real job losses among private sector businesses.

Residents of the Washington, D.C., area may be facing more foreclosures, but they do have other financial options. Those who believe that their financial future may be in jeopardy should consider seeking the assistance of a qualified bankruptcy attorney, who can provide additional information about legal and financial decisions.

Source: www.businessweek.com, "Foreclosures rise in D.C. suburbs after federal budget cuts (1)" Dan Levy & Elizabeth Dexheimer, Oct. 10, 2013

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