Archive for April, 2008

Foreclosures spare none – not even the brave young, staking their lives for the country abroad. Military and financial aid bodies are commenting that there are an increasing number of troops complaining about their failure to keep pace with mortgages and are facing risk of losing their hearth and homes to foreclosures. US troops are battling the enemy abroad and foreclosures at home.

Citing statistics from legal office, Army spokesperson Lt. Co. Anne Edgecomb commented that it has been noticed in the army that more and more soldiers and their families are seeking assistance for battling foreclosures. It is unfortunate that neither the Pentagon nor the Veteran Affairs department are detailing the number of military families caught in the foreclosure net. USA financial services company based in San Antonio keeps figures of the delinquencies of army families but they refused to release these. A large number of army families are involved in the total of 1.2 million foreclosures that have slapped the entire nation.

Nine of Veteran Affairs regional centres have noted increase in help calls from the veterans as well as from those in active duty. These are the findings of an informal pole. Houston based Money Management International said that the numbers of help calls coming from the troops have doubled. Previously the calls were two dozen per month during the first quarter of 2007 but this has become four dozen this year.

As per the law some amount of protection is given to the troops from foreclosures – Service Members Civil Relief Act. But it is not comprehensive as the lenders, with orders from the court, can foreclosure even if the owner is on the battle field. As the foreclosure problems worsen the legal officers of the army are gearing themselves for a flood of calls this summer. This is the time when the soldiers usually change their work and shift from one base to another. Often they are compelled to sell their houses. The foreclosure tide may affect GIs who live in rented accommodation.

One victim is Staff Sgt. Daniel Escamilla posted in Iraq in 2007. He had to negotiate from the battlefield with the lender regarding questionable penalties for rise in floating interest rates. His monthly payments had swelled from $967 to over $3,000. Escamilla has to worry not only about surviving on the war front but also about the day to day existence of his family back at home.

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Metro bus driver Eduardo Montesiro was one of the many house owners who crowded in to attend the Watsonville housing symposium held to help foreclosure victims last Saturday. It was organized by credit and mortgage specialists. Attendance was free.

Eduardo somehow slipped through the foreclosure net that trapped about 250 house owners in Santa Cruz County last year. In Watsonville he manages two mortgages. It is a balancing trick as he juggles to keep his income feeding rising payments while looking after his spouse and two children. Unfortunately he feels that by the end of the year he will have to surrender. The future looks bleak.

Eduardo was one of the participants at the workshop that was conducted both in Spanish and English. The aim was to help the borrowers to be realistic about their income-expense ratio and face up to the fact about keeping up with their mortgages.

The Latino families have been the worst affected by the foreclosure tornado raging through California. At the root are the sub-prime adjustable rate mortgages that were peddled to vulnerable borrowers. Today it has hit the general economic health of the region. The Hispanics are at the receiving end especially because of language problems, scant knowledge about mortgage implications and adverse changes in income patterns.

Owning a house is part of the Latino culture. Nobody understands it better than Maria Enomoto a consumer credit counselor. She was one of the prime movers of the workshop. A house translates into success. She has worked with many families ranging from professionals to field workers. She notes that the majority spend all their income battling with mortgage payments – there is very little left over for survival essentials like groceries or gas. So they dig into credit cards – something which cannot be sustained. The agency Enomoto works in, will start a new office in Watsonville office at 240 Westgate, Suite 240. She told the foreclosure victims that the first thing they should do is to be realistic and evaluate their income with their expenses.

On an average the first time Latino buyer is 24 years old , while a white buyer will not indulge in a house until the person is 32. The former does not have any idea about the loan implications and complications. The mortgage company should be contacted for loan modifications but this cannot be done unless the party is able to pull along.

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Foreclosures are not something that is happening in sanitized court rooms involving reams of paper and signatures. It is something far more realistic than that. With foreclosure numbers rising so is the reek from the filth and stink of foreclosures – literally. With more and more vacant properties dotting the scene like pox, routine administration is becoming impossible. Increased foreclosures mean increased number of evictees and this translates into rising number of homeless and vagrants. Not all manage to find or afford a rental. Nature hates a vacuum and so in moves the vagrants, mosquitoes and even snakes with frogs.

There are code enforcement officers who have many tales to tell. Tom Curl and Jose Mendez inspect the vacant damaged houses taken over by the banks. Sometimes they find a brazen squatter who answers to the knock. The person had taken over the unit for quite sometime. The place, sans electricity or plumbing was vandalized with fungus on the walls and feces all over. This is the stench – the inside story of the judicial process known as foreclosure. The foul stink is so pervasive that others not affected by the sub-prim melt down are vacating the locality. In such an atmosphere healthy families will suffocate for lack of fresh air and safety. The number of abandoned units will soon be outstripping the inhabited ones if something is not done fast to stem the foreclosure tide.

The National League of Cities conducted a survey and found that 33% of the cities across US are vacant. These are literally pock marks blighting the localities. Mothers with children find it difficult to sleep properly; they jump at the slightest sound. The local governments are trying to keep vagrants out but the sheer size of the problem tips the scales against their efforts.

Some intruders are sharp. They somehow spruce up the place, hook in a line, change the locks and even rent it out. The banks are handling so many foreclosures that they hardly follow up the vacancy even after many months of repossession. Tenants moving in are unsuspecting victims of this new type of fraud. The scammers have even posted a website to net in tenants.

Ultimately when the banks send a checking party much water has flowed through the river and it is difficult to find out who is entitled to stay and who is not; it is like going back to square one!

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The story of Dorothy Galbreath and foreclosure scammers is just one of the many dotting the scene – the stuff out of which novels are woven speaking of the times.

Doroth, a bus driver, had been married for long 43 years when death took away her husband. He had built her a house in University Park, Illinois. His death plunged her into financial troubles and she had a trying time keeping the foreclosure wolf from knocking at here door. Desperate she sought the help being offered by a company – Alternative Options. The end of the story is that today she has lost the house that had been her home. Alternative Options, took advantage of her age and vulnerability. She hardly had words to describe her situation. It was like being ‘crushed’ she said.

Legal experts opine that Dorothy became the victim of a typical foreclosure scam. The scammers operate in two ways. In the first kind a smart talking agent appears representing a company that may or may not exist. The person offers to negotiate with the lender to bring down the mortgage payment to an affordable figure. For this a hefty fee is taken after which the scammer vanishes; nothing is done. The second type of scam is even more dangerous. The firm promises to save the house from foreclosure but the borrower has to sign over the title to the rescuer. This is what happened to Dorothy. She was made to believe that Alternative Options would help her refinance but after waiting for a month she found herself falling further behind in payments. By the time she learnt of the fraud or even got suspicious it was already too late. It was not until she sat down across the table with Alternative Options that she came to know that the plan was to write over the title of the house. It was a psychological moment and she was rushed through it. The confidence building had been done previously. She found that she had sold the house at less than the market value. The company then leased it back to her and she was allowed to stay on as a tenant. But the rent was higher than the mortgage she was paying. She had the option of buying back her house but the price was exorbitant - $37,000 more than for what she had sold it for!

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Recently NeighborWorks America has granted Family Service Association of Greater Elgin an amount of $123,674 towards housing programmes including counseling. Those hit by foreclosures are being targeted. NeighborWorks has now taken up a positive role in the raging foreclosure crisis. Ann Rodriguez of Consumer Credit Counseling Service of Family Service Association of Greater Elgin Area opines that foreclosure prevention is essential not only for the borrowers but for the entire community. Help is available in Elgin, Hanover, Streamwood, Dundee, Rutland, Hampshire, Plato, Burlington and Schaumburg.

The grant stems from federal funds totaling to $130 million being disbursed through NeighborWorks America. The latter has initiated a Foreclosure Mitigation Counseling Program working through 16 house counseling agencies all of which are approved by HUD. Also cooperating are 32 house finance agencies of the state and 82 community-based organizations under the umbrella of NeighborWorks. Counseling and help to the foreclosed victims are the top priorities in these inter connected operations.

Those who reach forward to Family Service Association of Greater Elgin Area for help as regards foreclosure problems can be sure to get their problems analyzed thoroughly by a certified housing counselor. The latter will try to match the remedial medicines with the individual foreclosure related ailment. They will also contact the lenders on behalf of the traumatized borrowers. The problem is that many do not know that help is at hand.

The parent organization of NeighborWork Systems with its subsidiaries have been working for the uplift of communities since 1978. One of these – NeighborWorks America is a non-profit body built by the Congress to help communities financially and technically with training opportunities. Recently the focus has been on foreclosures and over two hundred counselors have already registered with NeighborWorks for imparting counseling and help. For five days a session was held regarding foreclosure intervention through Center of Homeownership Education and Counseling during the middle of April. Funds have been released by the Congress for such training sessions. Timothy Adams of NeighborWorks America opined that currently more than eight million families are in houses whose value is less than the mortgaged amount. One out of four of sub-prime mortgages are in the delinquency stage – just a step behind foreclosure. More counseling is needed to keep pace with the astronomical foreclosure figures. It is estimated that by the end of this year, 3,000 persons would have qualified for counseling certificates around the country.

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With foreclosures running at about 20,000 per week, at least 100,000 more families are likely to lose their homes before Congress passes a relief bill. And even then, the measure may fail to stanch the problem unless Congress comes up with something that is significantly better than proposals currently in either chamber. To produce a worthy relief package, lawmakers will first have to scrap most of the provisions in a bill passed last week by the Senate.
That bill would cost $21 billion over 10 years, with $15 billion of the total going to tax cuts that offer no direct help to at-risk families or hard-hit communities. One set of cuts would subsidize renewable energy; another would let businesses take temporarily larger write-offs for losses. A proposed $7,000 tax credit for buyers of foreclosed homes could backfire, encouraging more foreclosures by allowing banks to charge more for repossessed property. A measure to let non-itemizers deduct property taxes is dubious tax policy and bad foreclosure prevention, since it does not target the neediest.

Lawmakers will also have to ditch an unhelpful item in a bill from the House Ways and Means Committee — a tax break for first-time home buyers. It makes no sense to encourage buyers to jump in when further price declines are likely. Scarce resources should be put toward preventing foreclosures.
There are parts of each of the bills that should be preserved, including money for foreclosure-prevention counseling, for issuing tax-exempt bonds to help refinance subprime mortgages and for local governments to buy up foreclosed properties. But that is only a start.Democratic leaders want a final bill that would have as its centerpiece a bold plan for the Federal Housing Administration to guarantee the restructuring of mortgages for at-risk borrowers. An advantage of the plan, given the scale of the problem, is that loans could be modified en masse.

But the plan also has flaws. One is political: taxpayers could be on the hook if F.H.A. borrowers defaulted. Congress cannot ask taxpayers to step up without doing all it can to solve the problem without shifting the risk to taxpayers. The way to do that is to allow bankruptcy courts to modify mortgages for troubled homeowners.
The Senate dropped a provision from its recent bill that would have done just that. In the House, separate legislation on bankruptcy has stalled. It is up to Democratic leaders of the House and Senate to close ranks in support of the measure. Neither chamber can wait and hope that the other will stand up to the mortgage industry, which must not be allowed to undermine a policy aimed at fixing a problem it helped to create.

The plan for an F.H.A.-backed rescue also would rely on lenders to voluntarily reduce the loan balances to a level where the F.H.A. could take over. Volunteerism is not working. What\’s needed is a stick like the bankruptcy amendment. Lenders will be more likely to modify a loan if they know the alternative is having a judge do it.
Lawmakers know what to do. They just need the political courage to confront the mortgage industry.

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The Attorney General of Hennepin stated that some consulting firms have been duping foreclosure victims with promises of help. Six firms located outside the state have been charged by Hennepin County District Court. Injunction is being sought to prevent them from continuing with their business in Minnesota while the court proceedings are in progress. In the suits it is stated that these firms violated the laws of the state by raking in handsome fees for services they promised to deliver. But in reality they did nothing of the sort. As a result of this this foreclosed suffered intensely. More money and time was lost that ultimately led to the very thing they were trying to avoid – eviction.

Attorney General Lori Swanson commented that these firms ‘made a bad situation even worse.’ The companies were blatant enough to host websites advertising their claims. They also used direct mail services to make contacts with the house owners and sweet talked their way into the traumatized hearts of their prey. In each particular case these firms asked for consultation fees ranging from $1,000 to $,2,400. However they slowly made more demands matching further promises from clients who were already neck deep in debts facing and foreclosures.

These scammers approach at the point when the victim is first hit with the news of foreclosure when fear and despair traumatize sanity. Lonnie Sievert lost her house in Brooklyn Park to foreclosure. Her situation was made worse with these cheats. The trio against whom law suits were filed were National Foreclosure Relief of Nevada operating in California, Lewis Loss Mitigation of Alabama (using many names like American Foreclosure Specialists amongst others), also in California and Home Assure of Florida.

Each individual has a story to tell, Terry Lake is one. She has filed for bankruptcy in an effort to save her house. She gave something around $2,400 to one of the trio for this advice of filing bankruptcy. Another person, Lake, had more or less the same story to tell. Intuition had warned him that the promises were false and yet he got taken in by smart sales talk. To add sacrilege to injury the website of the American Foreclosure Specialists underlined the fact that the firm was run by Christians quoting lines from the Bible. One of the victims who chose this particular firm for its religious tone was Chantae Grandsberry of Brooklyn Centre.

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In Marion County the sheriff’s men have had to arrest a foreclosure victim in his eighties when he turned violent when faced with a foreclosure notice. He threatened the Sheriff’s men with a gun!

Black Diamond Process Service was being represented by 24 year old Robert McGuinness who went to 3933 N.W. 100th Street around 8 p.m. last Wednesday to serve legal papers regarding foreclosure to Frank W. Conrad. Conrad opened the door in his pajamas. Initially he was cordial but upon hearing of the purpose of Robert’s visit he lost his cool and left the scene saying he would have to change his clothes. But he returned with a hand gun and pointed it at Robert shouting “you have two seconds to get off my property or you will go to the hospital.” Senior Frank was joined by younger Frank, his son aged 61 who also talked aggressively with his hands on his hips. Fearing that he too might have a gun Robert decided to make a run for it. Frank junior called after him –“Get off the property or you will be gutted”.

Initially Robert did not want to report the incident to his supervisor but later the offenders admitted to the deputies of the Sheriff that the gun had been pointed at Robert. The gun was also exhibited - .38 caliber automatic. It was however not loaded. Younger Frank said that he only wanted to impress upon Robert that he possessed a weapon.

Following this altercation senior Frank was arrested on charges of violent assault and taken to the county jail. He was then released on bail for $7,000. Robert could not be contacted. His superior Ron Ragle said that they have hired an attorney and did not want to talk about the details at this point. The property is in Pinellas County. Ragle said that this was not an isolated incident. His staff had been exposed to knives and dangerous dogs but the gun was a bit of a rarity. Speaking about increase in number of foreclosures Ragle commented that two years ago they had served 40 to 50 notices per month. Now the number has gone up to 300.

Rising number of foreclosures has led to a pervading charged atmosphere. People thrown out of their houses that are their homes cannot be expected to act normally – irrespective of the fact whether they are in the right or wrong.

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