Archive for August, 2006

Denver’s foreclosure rate continues to climb. More than 9,500 real estate foreclosures have been filed in the Denver area in the first half of the year, about 34 percent more than in the first six months of 2005.

If the rate of increase continues, we could see a record number of foreclosures by the end of the year. 1988 saw 17,122, foreclosures, and experts are predicting this record to be broken by the end of 2006.

Experts are concerned about the number of people in danger of losing their homes because of the impact on a local economy that is otherwise showing strength by most measures. Tom Clark, executive vice president of the Metro Denver Economic Development Corp. remarked on the trend: “The thing that continues to puzzle me is that all of the other underlying parts of the economy are strong. Our job growth is good, our personal per capita income is among the top in the country, our productivity is going up. Everything is strong except for the rising foreclosures.”

However, even a strong economy and the presence of new jobs sometimes isn’t enough to help homeowners keep up with the skyrocketing interest rates associated with Adjustable Rate Mortgages.

Kevin Marchman, executive director of the National Organization of African Americans in Housing, and the former head of the Denver Housing Authority, noted that blacks and other minorities have been hit particularly hard and are often victims of predatory lending and scams.

“My best guess is that upwards of 30 percent of the foreclosures are due to predatory lending,” he said.

One of the best ways to avoid predatory loan scams is to educate yourself on the types of loans available to you and to realize that if a deal sounds too good to be true, it probably is. And unless you’re sure you can afford them, be wary of ARM loans. This is a lesson millions of Americans are now learning too late.

Tommorow, the ForeclosureListings.com Blog will feature some tips on how to avoid mortgage and loan fraud.

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Since so many ForeclosureListings.com blog readers are involved in foreclosure and real estate investing, we felt it would be a good idea to provide some advice on how to avoid becoming a statistic in the growing foreclosure trend sweeping the nationwide market. We know that some of you out there have probably gotten involved in the past few years in Adjustable Rate Mortgages with the hopes of selling quickly, and with interest rates rising as rapidly as they are, we know it might be tough to keep up. So here’s some advice to help you stay on top of your mortgage situation, so that you can avoid foreclosure and be ready to deal with any problems that may arise.

The following information is taken from FreddieMac.com, where you can find more information on programs available for helping you avoid or deal with foreclosure:

-Do not ignore your lender. Contact the loss prevention department of your mortgage company as soon as you realize you are unable to make your payments. Tell them about your circumstances. Your chances of keeping your home are most effective when you are only one or two payments behind. Lenders prefer working with clients rather than moving to foreclose.

-Contact a nonprofit housing or credit counseling agency. They can help you organize a budget to repay the mortgage, or help you find local services or programs that provide financial, legal, medical or other support.

- Sell your home yourself or with a real estate agent. If you can’t sell your house for the amount you owe on the mortgage, your lender may agree to a ‘’short payoff” and write off the portion of your mortgage you still owe.

-Do not sign anything you don’t understand, and find a consumer attorney to review complicated contracts. Beware of contracts containing unreasonable repayment terms for loans, high interest rates and unfamiliar or undefined fees.

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New statistics have showed that Oklahoma foreclosures have increased 45 percent over the past year to a rate that is more than two-and-a-half times the national average. The new figures place Oklahoma’s foreclosure rate as the thirteenth highest in the nation.

As in other sectors of the country, the rising rate of foreclosure is attributed to rising interest rates nationwide, and especially their effect on Adjustable Rate Mortgages. In other states, the key to avoiding a skyrocketing foreclosure rate has been an increased economy where people can earn enough and afford to keep up with their loan payments. However, with interest rates rising as quickly as they are, it will be very hard for more and more people to make payments as time goes on.

If you’re looking to buy in Oklahoma, finding a foreclosure or pre-foreclosure home could be your best bet at a time like this. Not only will you be able to buy for a discounted price, you will also be helping someone who can no longer afford their mortgage payments by buying them out of debt.

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One of the most common topics discussed both on this web log and in the general real estate sector these days is the effect of Adjustable Rate Mortgages on the rising national foreclosure rate. As explained previously, in the past years many investors and homebuyers sought to capitalize on the thriving real estate market by buying up anything they could in hopes of being able to sell it for a profit. The best loan to use for this purpose is an ARM, given that it has very low initial costs, making it perfect for those who don’t intend to hang onto their property very long.

As the market has cooled off considerably, many people are now stuck with the homes they have purchased with an ARM. While the ARM had low initial costs and a standard fixed-rate for the first year since its inception, now these owners who are unable to sell are stuck with the rapidly rising interest rates, leading to foreclosure and/or financial stress for millions of Americans.

However, we have recently seen many homeowners taking steps to make sure they don’t get in any deeper as they do. With interest rates rising and some analysts predicting rates as high as ten percent within a few years, many are looking to refinance for a comparatively low fixed rate loan while they still can.

Although interest rates offered on fixed loans may be higher than they were when the homeowner first bought their home, many are hoping to simply secure a stable payment before it gets any higher. A small hike in interest rate can mean a drastic hike in mortgage payments, especially for those already struggling to meet their current payment.

This is an attractive option for anyone who has invested and finds themselves stuck with payments. While it may require some higher costs to start, it might be wise in the long run, considering the market does not seem to be improving in terms of home values or housing supply anytime soon.

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These days, many citizens dream of owning their own home, but too many are unable to accomplish this goal due to low wages, credit problems and high minimum down payment costs. As a result, many turn to low initial cost loans like ARMs, which can be extremely risky. The rising national foreclosure rate indicates that many people who take out these loans cannot afford to keep up with their rising costs.

However, the Housing of Urban Development is seeking to change all that. HUD has proposed groundbreaking changes to renovate and modernize the system by which the Federal Housing Authortity (FHA) works. The FHA helps low to moderate-income individuals and families who either need financing for a new home or refinancing for their present mortgage. However, HUD feels that the Federal Modernization Act it has proposed will make the Agency more effective in meeting its goals and helping American citizens.

Some of the new changes include creating a risk-based interest fee, which matches the interest on loans provided by FHA-insured lenders to borrowers based on the borrower’s credit history, instead of the current flat fee. Other provisions include eliminating a minimum down payment percentage, and raising the maximum amounts that a loan can provide.

While some have doubts about the effectiveness of the new Act, especially the sections that involve risk-based pricing, HUD believes this will truly help make FHA a more attractive option for citizens. By keeping prices on loans low, especially the often deterring down payment prices, they think more people will seek and be able to receive loans for ownership.

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As June, President Bush

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New-home sales in the northeastern sector of the United States have dropped by more than 8% in May. The northeast is the only region of the country that did not experience a rise in housing sales, as most other areas gained between 3-6%.

Experts attribute this drop in sales to be the significant end up the swell in home values and the real estate market that had been rampant throughout the northeast in the past years. Being that the area is considered very desirable to live in, many homes there were bought up as property values skyrocketed. However, as we have to come to realize, this era is over.

What these decreased home sales lead to however is a subsequent drop in home values, which can be good news for those still considering purchasing a home in the northeast. In Massachusetts alone, the median price of a home dropped from $344,700 to $331,000 since May of 2005.

These statistics become especially indicative of the market condition in the northeast when compared with those for the rest of the nation. The nationwide figure for new home sales actually rose 4.6% in May, given the sales are still plentiful in other parts of the country. One of the reasons for the drop in home values in the northeast is also that the market is flooded with homes for sale as many are still trying to cash in on the purchases they made hoping the boom would continue.

Coupled with the rising foreclosure rate in Massachusetts reported on yesterday, it doesn’t look like the market in the northeast will be significantly improving for investors anytime soon. For homeowners, the problem of falling property values also means that those facing foreclosure won’t be able to sell at the prices they wanted to avoid a full foreclosure. With a flooded market it will be difficult to sell homes. However, with a strong economy and stability in the job market, many feel that the effects of the drop in the housing market will not become out of control.

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New data on Massachusetts foreclosures shows a rapidly increasing foreclosure rate in areas across the state. The amount of new foreclosures for the month of May 2006 is 105% higher than that of May 2005. As in other states, homeowners are struggling to deal with interest rates that are rising at a consistent pace since the housing market has started to slow down and property values continue to fall
Real estate experts in the state expected the foreclosure rate to rise, given the national trend, however many feel that the current numbers are much higher than anyone predicted.

Counties with especially high rates include Barnstable County on Cape Cod, as well as Suffolk County, which includes much of the Boston area. These areas are generally considered high value property areas, and homes there were bought up quickly during the inflated market scenario of the past five years. It might be a goodtime for potential homebuyers to consider buying a Massachusetts foreclosure, as the slow market has cause many homeowners facing debt and foreclosure to sell for lower prices than usual. However, it is probably not the best time to buy a foreclosure here if you are looking to invest and re-sell the property quickly, as the potential for a worthwhile profit is low.

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