Archive for July, 2007

In Carpentersville the Parrish family realized their house dreams with just the right touch in everything from the kitchen to the swimming pool. But soon the milk curdled. The man got ill. The woman lost her job. They both lost the house with memories and mementos unable to meet monthly mortgage payments. The foreclosure cancer closed in.

The Parrishes were only one in thousands in the Chicago region and across the country caught in the tentacles of the deadly foreclosure. In Elgin and South Elgin the first half saw a 32% hike since last year. It was the same elsewhere.

The blame is put not merely on unrealistic borrowers but on the general economic slowdown and changes in the lending sector. It is a raging storm. There has been a sharp shift from the traditional 30-year mortgage schemes to others with teasers like interest-only and the like. This has led to chaotic foreclosures.

Borrowers walked into it without giving a second thought to the rise in rate hake after a year or two. Many like the Parrishes complain that they were smart talked into the scheme. It was not just the borrowers but the lenders too faced a crisis. These new loans gave no importance to the equity issue. Without equity there is nothing to lose in a foreclosure. The way is open to bankruptcy. Stay put until the house is forcibly taken away.

The bitter pill for curing this ailment is to pay off the loan by selling the property and move into affordable rented quarters without the hanging sword of debts. But with hectic development work going on all around it gets difficult to sell the house. With stiff competition prices are bound to fall. The headache is not only for the borrower but for real estate agents as well where auctioneers find themselves unable to off load the weight at the end of the session. In fact the house of the Parrishes remains unsold even after a knocking off blow to the asking price.

The foreclosure numbers of 2007 will put to shame those of 2006! The faint ray of hope is that perhaps the crisis has reached its peak. This means that it couldn’t get much worse in some localities. The experience has been a shock to the Parrishes now living in rented accommodation where they continue to dream.

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At the eleventh hour a Norwich Superior Court Judge cancelled the foreclosure auction proceedings against Waterford Speedbowl property that was scheduled to be held on Saturday. This means hope for short track racing enthusiasts. The weekly event will continue to be held in Southern Connecticut.

A spokesperson of Waterford Speedbowl, Terry Eames, confirmed that his group had managed a financial solution to the foreclosure. This has enabled them to continue with its racetrack operations. Rocco Arbitell of Southbury and Peter Borelli of Derby refinanced and bailed out Speedbowl from the ignominy of Foreclosure.
In the first half of 2006 Washington Mutual Bank had initiated foreclosure proceedings against the property owners and had got a date on Saturday noon for holding auctions. But on Thursday Eames and his group completed refinancing formalities. A new mortgage was availed of through two private individuals – Rocco Arbitell and Peter Borelli. This allowed Norwich Superior Judge to cancel the auction on Friday morning. Eames and his organization have now nothing to do with Washington Mutual Bank. It was a narrow victory. The victims had till 5 pm on Friday to scrape out of the auction.

For Eames it was a moment of great relief after the close shave. Although for the last few days the redress plan was taking shape he could not sit back on his oars until the thing was finally done. It was only on Thursday evening that he could put up his heels and sit back.
1080 Hartford Road, LLC purchased Speedbowl in September 2000. Eames has been running Speedbowl since its inception but had surrendered operational control of the track since the last season. The track has now been leased to Jerry Robinson, a local businessman and to the general manager of the Track Bill Roth.

Harvey Industries will be purchasing 8 of the 39 acres of Speedbowl land and plans to set up on the site a distribution centre.

Eames waxes eloquent as he ruminates on the recent happenings. The Roccos and Borellis as family units refinanced the deal as a personal favour to him. Also as racing enthusiasts they were keen to see the track running and alive. Eames also expressed his deep gratitude to Attorney Tom Londregan who was a pillar of steady support and a perfect gentleman striking at the opportune moment to clinch the issue on the correct legal point.

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The housing market is collapsing like a house of cards. Walls Street is beginning to wake up with a foreclosure headache. Figures released by Equifax/Moody’s Economy.com reveal that the number of foreclosures in Fort Lauderdale spiraled to 335%. In Flint, Mich, and Visalia, California the shooting up was as high as 986% and 1,587% respectively.

But Hari Sreenivasan of CBS News points to the silver lining behind the clouds in a series dealing with property solutions –‘Real Estate Real Solutions’.

Donna Young was one of them who did not buckle under. Last year this time with four children clinging to her and a divorce hanging over her head she did not lose either her heart or her suburban Atlanta house.

Nearly $4,000 behind in mortgage dues depression was beginning to get the better of her with all her hopes and efforts going up in smoke. Fortunately she turned to The Impact Group, a non-profit organization. It steered her with financial education and chalked out a budget for her by persuading the lenders to give her the opportunity to pay an extra $300 per month and catch up on her dues. She was also given extra time to regain her balance. Lenders are interested in getting back money.

The dark clouds of foreclosures have made housing advocates and lenders set up an umbrella for protecting victims. Foreclosure is not an isolated incident – it has a snowballing effect that sucks in the entire economy and society. A congressional report stated that it infected the property owner, the lender, property value of the region and consequently caused loss to the local government. Information about assistance is given out on the city’s water bills in Arlington, Texas. Public service announcements loudly offer help to the 1 million affected families annually drowning in foreclosures.
On an average a foreclosure costs $80,000 whereas preventing one is less than $3,300. The best time to anticipate the crisis is even before the first stumble. The trouble is that about half the victims never contact their lenders.

To come out of the crisis visit HUD and make sure that credit counselling agency is approved. Get in touch with your lender as soon you see signs of trouble in the horizon and start negotiating. The possibility is there of delayed longer time payments being allowed. Donna Young tells you to just hang on like her and eventually survive!

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The city of Chula Vista in San Diego County is one of the fastest growing cities. Over the years the city has witnessed an increase in its single-family homes. However, the increase in number of homes came along with an increase in adjustable-interest loans. This led to an increase in homeowner’s payment, and many homeowners were unable to keep up with the payment. As a result of which several properties in the city of Chula Vista are facing foreclosures.

The rising rate of foreclosures has led to an increase in number of vacant homes. According to officials in South Bay city, the area has witnessed more than 700 vacant homes. Doug Leeper, the city’s code enforcement manager says that city has nearly 3000 distressed properties, due to which nearly 700 to 800 properties are lying vacant.

In fact in several areas of the city, one will witness abandoned homes, which one can easily identify due to the condition of the property. Several properties are seen in pathetic condition with dried up front lawn, broken windows, dirty swimming pool etc. In this regards Art Deford a local resident who lives near such vacant foreclosure property says that the look of the beautiful looking home has changed ever since the lender has taken it over.
While the rising foreclosure rate in Chula Vista has not only led to an increase in empty homes, but due to conditions of these empty homes, rates of near by areas is getting affected. According to former City Councilman Leonard Moore, people walk away from areas having such properties.

To handle this situation, and to prevent property values from falling further, the Chula Vista administration has adopted a program. Based on similar programs formulated in Chicago and Detroit, under this program lenders will be compelled to maintain homes, which they seize and register vacant properties with the city and a $70 fee will be charged to titleholders on registering the property. Besides as the property is security for loan, the lender will be held accountable for a home even before the foreclosure procedure is over.

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Yuba County has the dubious distinction of leading in foreclosure trippings. During the second quarter of this year the fall out was four times more than during the same period last year, according to La Jolla based real estate services, DataQuick Information Systems.

The first step is issuing of default notices. This increased by 280% in this county. The number this year was 171 as against 45 in 2006. There had been an increase in 2006 in relation to 2005 but that had been negligible and not spectacular like this time. It was the highest number of notices in ten years. The causes were pinned down on rapid fall in prices and slow sales. The balloon of frenetic buying during 2004-2005 seems to have burst. Till now property owners had been able to survive because of real estate boom. They sold their homes and refinanced.

But of late the noose of foreclosure is tightening with few being able to slip out of it. Nearly more than half of property owners are in the red. 54.6% scramble out somehow by refinancing and getting some equity on their houses. A year ago this route had saved 88%.

DatQuick puts the blame on the slow market and homes bought with multiple loans financing method. In Yuba County the average prices of property fell by 10.4% in June 2007. A year ago it was 8.5%. Sacramento is the weakest spot in the region. Till last Tuesday there were rumours that the foreclosure crisis would make a u- turn but nothing happened. This is just the reverse of the coin when the atmosphere had been such that lenders came forward to give loans even to those who were not technically credit worthy.

Many questionable loans were made during summers of 2005 and 2006. The price of property was hopping and jumping up by double digits allowing lenders to tease borrowers on to stretch beyond their maximum financial capacity. It is the latter that is kicking off the storm.

The prediction is that there is little hope in sight. Foreclosures will keep on rising as a fall out from loans of 2006 that had 2 year fixed rate periods. The interest would be reset in 2008 at a higher notch – thus putting more pressure on monthly installments.
Coupled with this are unemployment problems making it impossible for owners to remain masters of the house.

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The foreclosure crisis in the country is getting worst day by day and several homeowners are getting affected due to this. A lot is being said and written on the ways and means of handling the foreclosure situation in the country. In this context author Ralph R. Roberts has some up with his book Foreclosure Investing For Dummies, which was presented at the RISMedia’s CEO Exchange in Sedalia, Colorado.

Speaking about his book, the author said that primary aim of his book is to provide solutions to homeowners who are the victims of foreclosure. The author is of the opinion that homeowners who are facing foreclosure are unaware of the variety of options available to them, as a result of which they eventually end up loosing their property as well as their equity. However, through his book, Robert has attempted to provide several options for distressed homeowners.

The author is of the opinion that homeowners facing foreclosures must proactively contact their lender. By doing so they may either be able to save their property or can sell their property and repay their debt, rather than letting the property go in for an auction, where the owner does not gain anything.

The books also provides insights regarding the foreclosure process, and is useful to real estate professionals who want to grow their business by purchasing such foreclosure properties and earn a fair amount of profit. The book provides information on investing in pre-foreclosure and foreclosure properties where by investors will not only be able to make good amount of money, but at the same time can provide a helping hand to distressed homeowners. By investing in foreclosure property, Robert believes that the foreclosure crisis in the country can be handled at least to a certain extent.

On being asked the reason for presenting the book on this occasion, the author said that the purpose was to send message to real estate professionals such as brokers, agents, loan officers etc to help foreclosure victims by educating and encouraging them to contact their lender and take the first step to save their home and equity.

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RealtyTrac, made its debut two years ago by becoming the first data collector of the country’s mortgage crisis. It made its entry at a point of time when such a service was of invaluable importance. The information provided by RealtyTrac has been widely quoted by national news media and even by the Congress.
But it is not free from criticism. Colorado State Housing Division had problems with RealtyTrac figures and had to do its own sleuthing. Under pressure of censure for having played around with numbers, the company will for the first time issue a statement in its quarterly report explaining the contradictions in its data.

A spokesperson of RealtyTrac, Sharga, said that the unjust criticism is a backlash from trading groups who are uncomfortable with the bad news. Some do not understand that the foreclosure issue is not just an incident but also an ongoing process. The numbers are based on public information pointing to a problem.

Duncan of Mortgage Bankers Association agreed about the problem but said that the data was incorrect because of triple counting. It damaged the public image of the industry. Each step of a single property was counted more than once. The Association has its own data bank representing 80% of the country’s mortgage transactions.

The ace foreclosure websites like RealtyTrac.com, Foreclosure.com, Foreclosures.com and Bargain.com charge monthly fees from those interested to view foreclosure, defaulting and reversion to bank lists. The data of these data collectors varies. RealtyTrac claims to be the largest and most comprehensive publishers of national statistics relating to foreclosure and bank-owned properties – more than 1 million units stretched across 2,500 counties. The collection includes all the three steps of foreclosure – notice for default, auction proceedings and completion of it when the property returns to the bank. It is the detailing that has led people to misunderstand its method of calculation. One property cannot be in more than one phase of the process. But the explanation is given that in the quarterly report, a property may have been counted more than once. A property is sometimes foreclosed simultaneously by more than one lender.

RealtyTrac is happy about the service it has done to society as many state offices come to them for details – the objective being to find out escape routes for the unhappy victims. It has brought about cohesion between government and private enterprise.

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Jacksonville is being sucked into the whirlwind of foreclosures ranking among the top defaulters in the country. Lake Forest area with a high concentration of houses is the worst hit. The virus has infected all levels of income and localities. Jacksonville has one foreclosure per 123 households – with the highest focus on Lake Forest area. Catchy signboards offering help are sprouting like mushrooms. The phone line however does not connect directly with the owner but with mortgage brokers fishing in troubled waters, trying to rope in more clients.

Some residents are living in an island unaware of the surrounding roaring waves. Leaflets jamming their letterboxes are taken to be normal junk which all have to bear with.

Realtor Peggie Wattron acting for Lighthouse Realty informs that she has her arms full with about 90 foreclosures to deal with. Her experience is varied. There are ex-house owners who refuse to budge until the police come with assistants and literally kick them out bag and baggage. Then there are city campers who calmly break in and squat on foreclosed properties.

Wattron has often tried to contact the victims to show them the dignified escape route but they usually prefer to remain like ostriches and protest that they are unaware of the coming eviction. Even when she goes and pastes a notice on the door the evictees tend to look the other way and pretend that nothing is there to read or see. Nobody contacts Wattron by burying their heads in the sand.
The Lake Forest region is a scene of devastation with piles of trashcans and personal knick-knacks strewn in front of crumbling houses with broken doors and windows. Sometimes the frustrated ex-owners do their utmost to damage the structure before leaving by pulling out as many fixtures as possible.

In the middle of the mess lenders, investors and advocates of borrowers throw mud at each other. The large number of defaults has had a snowballing effect on Wall Street and forced some lenders to down the shutters.

The story started with people with dreams and low income being refused loans. Cashing in on this scenario mortgage brokers came forward with teaser loans – tempting in the beginning but turning bitter with each passing day. Details of the agreement were purposefully kept in small print.

The grave situation has caused USA Senate to regulate sub-prime lending by legislation.

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