Archive for the ‘Foreclosed Homes’ Category

Foreclosures continue to rule the roost despite much talk and hype about solutions. But what is self evident from numbers pouring in is that the Bush administration has failed to rein in the galloping foreclosure horse. Like myriad other problems this all-important one about foreclosures is going to be dumped on the new President and the succeeding Congress.

The lax lending of the previous bubbling years continues to ferment trouble and spread the rot. In May foreclosures were again on a running spree with many default numbers tagging behind, ready to be foreclosed. The pain today is not only the tears of individual families. It has spread its tentacles wide. House prices are falling, tax collection is declining while credit remains tight fisted. This is creating a vicious circle of continuation of the slump in the real estate market that is in turn telling on the general economic slow down. Lenders, borrowers, the ordinary citizen and politicians are now all boiling in the foreclosure stew. So far nothing positive has come forth from the Bush administration.

The sitting Congress may succeed in passing a foreclosure-help bill before 4th July. At best it will stop 5,00,000 foreclosures covering the forthcoming years. If it sees the light of day it will be something to trumpet about. But there are many ‘ifs’ – it has to be passed and then it has to be signed by Bush. Even then the weight of foreclosures that will be legated to the next administration will be gigantic.

At this juncture it is relevant to note what noises the two presumptive nominees, John McCain and Barack Obama are making on this all important foreclosure issue. Last March McCain had tagged along with those who blamed the borrowers for taking more loans than they could afford. He argued that they were not deserving of help. This led to a barrage of criticism. McCain came to be termed mean and ignorant of economic points. The argument was that there was no reason to make the entire economy suffer for the failings of few borrowers. From April, McCain began to sing another tune and supported administrative steps being taken to halt foreclosures.

Obama has more broad suggestions to offer – allowing bankrupt borrowers to have their loans modified via court protection route. This has been categorically dismissed by Bush group and the mortgage companies. Obama is also for local bodies to purchase foreclosed properties and thus help in easing the market.

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One has to be brave to think about buying in Las Vegas or Tampa where the real estate market is sliding down from bad to worse. But in other cities there are growing signs of stabilization and one can try to snap up a bargain in foreclosed properties. The best places are Charlotte, Raleigh, Oklahoma, San Antonio and Albuquerque. Right now these five cities are the top five best options for the buyer to go to.

The largest 100 metro areas have been categorized according to the number of foreclosures within the ranges covering 3% to 4%. Riverside is 3.8%, Detroit is 4.8% while Seattle is 0.4% and Austin 0.8%. From these figures the buyer should be able to gauge the mood of the real estate market.

Apart from taking foreclosures as an yardstick there is another method related to correct valuation of the house. Undervalued houses do not always mean a sound investment. For instance a house in Detroit may be relatively cheap but the economic atmosphere here is bleak and this tells on the market. If Detroit had more jobs then the picture would have been different.

The other cities that measured up to quality of life as regards local economy are Raleigh and Oklahoma where foreclosure numbers were low while economic climate was also good.

The next point of focus was how real estate had been performing since 2006. In no city had there been big jumps but nevertheless in San Antonio prices had increased between 2006 and 2007 by 8.24%. Thus this city carries far less risk than others like Sacramento where prices had dropped during the same period by about 10%.

Having sifted through all these angles it was now necessary to see the gap between average prices and the foreclosure prices from reliable data to find out where the largest discounts were being offered by the banks. Stubborn sellers will not negotiate but cling on to their demands. Those who want to short sale are the best options for here the house is offered at a price that is less than the loan amount. On this count Charlotte is a good bet. Here the houses of foreclosed units are 28% below the average thus causing an average saving of $56,874. It is nothing to be ignored in a market where the average sale price stands at $147,299.

Online there are details of all the houses listed but it is wiser to go through renowned routes

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In the Michigan real estate business the top option by many home buyers is to go in for Michigan foreclosed homes. This is based on sound reasoning that the Michigan foreclosure process is caused by many eventualities, namely bankruptcy, financial strain, death of house owner or shifting of residence to another place and the like, thereby the property owners defaults in repayment of the mortgage. The mortgage lenders are initiating the process of foreclosure for retrieval of their loan. Here the point to be noted is that the lender would have already got back a portion of the loan through paid installments and the remaining portion should only be recovered. So the mortgage lenders, private and public sector institutions like HUD, Banks and Insurance Companies, are ready to dispose of the property through foreclosure and are keen on getting back only the amount due to them. Michigan foreclosed homes also have this unique advantage.

Selecting the best location for purchase of a property is of paramount importance. The State of Michigan gets the merit of location ideal for investment as explained below:

The mid-western State of Michigan of the U.S.A. located in the east north central portion of the country, bounded by four great lakes, is blessed with the longest shoreline of freshwater in the world and second best in U.S., next only to Alaska. This is the only bi-peninsular state divided into Upper Peninsula and Lower Peninsula.

The State capital is Lansing and the largest city is the famous Detroit, a world-renowned automobile manufacturing venue. Michigan ranks 8th in the U.S. population-wise and has nearly 10 million people available for the realty market business.

Michigan has a humid continental climate throughout the state, irrespective of the two peninsular divisions, the Upper Peninsula being densely surrounded by green forests. More than 80% of the population is white Americans descended from Europe and the realty business is designed to suit their tastes in housing properties.

Economy wise Michigan State houses for high-tech employment in information technology, life sciences, engineering and heavy manufacturing inclusive of automotives. Apart from automobiles the State holds a pivotal position in manufacturing technology equipments like computers, hardware and software, bio-technology, Research and Development of technologies, aero-space equipments, which are mostly white-color jobs. The state provides ample scope for tourism development with its natural resources of forests in abundance and the related opportunities of employment. The personal per-capita income is assessed to be of 20th rank in the country. The important information for realty business is that Property taxes are assessed on the local level and not State level.

Hence, arising out of the factual advantages of location described above, Michigan also right on timing for realty business, particularly in Michigan foreclosed homes. The fact that increased availability of foreclosed homes due to downward trend in economy and mortgage lending interest rates, as prevalent elsewhere in the country is catching up Michigan also.

There are totally 143,918 foreclosed homes available for sale, listed in the MLS of Michigan at an average price of $169,900 and the Michigan foreclosed homes available are 39,169 Nos. at an average price of $96,999. With the above basic information, you are invited to get all the help, guidance and assistance in locating the exact Michigan foreclosed home of your choice as well as finalizing the deal amicably by visiting www.foreclosurelistings.com

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California continues to reel under the foreclosure tornado. More foreclosed homes are being sold and the picture remains grim. The weather is showing no signs of improvement. A report has been issued about 9,477 foreclosed homes by one of the most reliable prime online data collecting sources focusing on August 2007. The total value of the loan was $3.86 billion. Auction sales picked up speed state wise by 10.4% as compared to the total sales in July of this same year.

4,199 of these foreclosed homes comprise of 44.35% of the total sales. The latter have been described as ‘spectacular owned’ units. Their total value is $1.71 billion. These spectacular owned units are generally not occupied by the owner but had been bought for investment and speculating purposes.

According to analysts it is these types of investment foreclosed homes that cause the greatest damage to the sub-prime mortgage market. The speculators have practically nothing to lose when they move out. These investments consist of 44.3% of the total sub-prime investments. The owners are just walking away with a casual shrug. They lose neither hearth and home nor memories. Even those with good credit history were not averse to this rampant speculation. This is the main reason for the foreclosure debacle.

The latest report on the August hones in on some important pointers. 90.3% of the total foreclosure sales in California belong to either homes purchased or refinanced during the two years of 2005 and 2006. Approximately 95% (9,015) of the units sold in the auctions reverted to only the lenders. The total value amounted to $3.7 billion.

During August the default notices to 16,563 foreclosed homes, shot up by 16.3%. In the foreclosure process this is the first step. But trustee sale notices were issued to 12,896 foreclosed homes – a decrease of 2.25%. The latter notice predetermines the date and time of the auction sale. The foreclosure process starts with delinquency when the borrower defaults for more than three months. Then notices are issued and these are followed by sales and repossession. It consumes time and money.

So far the data that has been released is comprehensive and includes complete figures of all the counties in California. Riverside County is the highest offender in foreclosures during August. San Bernardino County notched up one step to rank 8th by increasing 18.1% in the total number of foreclosure sales during August.

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The story of one family is the same as that of thousands of others across the country. The Greenes tired of being tenants grew confident that their joint income would enable them to become house owners by paying $1,000 per month towards mortgage. But their hopes turned to dust when spiralling living costs combined with mortgage increases left them stranded. Twice they have applied for bankruptcy in about ten months to keep home fires burning in their own house. This is just one instance of what is happening to many other families across Floyd County as well as nation wide.

According to reliable sources there has been 175 foreclosure notices at some stage or the other since May in the County. The different stages are default notices followed by auction and bank repossessions. In Georgia the situation is grim – 1:299. It is double that of the national average.
The culprit is the sub-prime market where interests shoot up after a honeymoon period of grace. Those with weak credit creditability had benefited from these loans during the last ten years. Through this route they had been able to own a house. Little or no down payment was required initially but later rates soared.

The crisis peaked this month when numerous lenders including jumbo ones like Homebanc Mortgage Corporation of Atlanta said quits to the mortgage business. It set off international tremors in the stock market. Investors withdrew cash from the markets causing available credit to dry up. The Federal Reserve had to quickly intervene to allow stocks to rebound on 17th August.

Locally Floyd County continues to stagger with the weight of foreclosed units. About four years ago the housing picture was rosy in this region. Low interest rates with high appreciation value of properties tempted investors and buyers to hope for high profits. Swayed by publicity they took the risk. Even longtime house owners fell for the trap and refinanced. Then came the shock! Suddenly interest rates began to skyrocket. It meant additional monthly payments. For others the prices of essentials began to soar; so too did medical expenses and coverage. Unemployment and shutdowns added to the woes. The net result was that people found it difficult to sell their properties and save themselves. The tightening of the mortgage industry has made it more difficult to avail of house loans. The circle is viscous.

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The crisis in the sub-prime market is being held responsible for world wide heart palpitations. Figures and statistics are rolling in and experts are struggling to analyze and pin point the issue. Generally the accusing finger points to lax mortgage practices. On the other hand if ordinary folks were not able to avail of easy loans how would the great American dream of becoming a house owner be realized? Unfortunately both the borrowers and the lenders overstretched themselves creating a situation in which a snow balling effect is being felt in all spheres of life. There has been a socio-economic fall out.

The detailed picture is not the same everywhere. According to experts a tendency to be noticed is that 90% of the owners with loans of $250,000 or less are worst affected. As yet the giant loans are sitting pretty. This is the picture in North Texas. Foreclosure listing sleuths are tracking details of more than a dozen Texan Counties came to this conclusion. This has been the tendency during the last three or four years. It is not that the low priced houses are more in number. During the first nine months of this year nearly 31,000 units valued around $4.5 billion are up for sale by the lenders. It reads a 12% rise in numbers and 19% in value during the same time period in the previous year – 2006. This year the loans that are being foreclosed started its loan history in 2003.

In Dallas Forth Worth the house loans were in the kitty of the nation’s giant mortgage firms – Fannie Mae and Freddie Mac. Less than 2,000 of the foreclosed units (6% of the total) came from house owners defaulting on the equity loans of their properties. Specialists opine that the effect on real estate is not that bad as anticipated. These still represent a fraction of the market.

Of the foreclosure units only about 1% during the first nine months of 2007 were for properties worth more than $500,000. But soon the picture might change for the worse with lenders asking for more interest. It might very well cause the number of the big loans sliding into foreclosures to rise. There is much talk and speculation about these jumbo loans. Builders are putting their heads together and trying to find out which way the wind is blowing.

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The foreclosure crisis marches on and following its trail are hungry predators who are making a living out of people’s woes. Better Business Bureau of Central and Northern Arizona have sent out a loud warning.

It is apprehended that nearly 1.7 million houses will soon be tainted with foreclosure. The affected will be desperate trying to save their home and hearth. In the melee they will catch on to anything – even a straw. Here lies the danger. The wolf will knock wearing grandmother’s clothes. Beware!

The bureaus are flooded with complaints from foreclosure victims who reached out to questionable foreclosure rescue companies. The whole thing is another scam. In the last three years there have been 111 complaints.

The usual mode of approach is that these crooks first make contact over phone or mail. Sometimes they make themselves available on the web where they make tall claims about refinancing loans and stopping foreclosure procedures. The bait is that they promise to return fees if the services are not properly delivered. Desperate sufferers had paid as much as $1,300 only to come up against a blank wall – no redress and no refund.

Better Business Bureau gives the following tips to foreclosure victims. They should immediately contact BBB over phone or through Internet and ask for a Reliability Report, which is free. Without this report no payment should be made to anyone plying a lifeboat.

The other option is to check the rescuers credentials with the office of the Attorney General. In general one should be cautious about the personal approach like a handwritten note popping out of the mailbox or under the front door. The language will be gushing and flowery about help being at your doorstep. The tone is that only your interest is on their minds!

The best thing is to directly approach the lender. Negotiate with the mortgage company.

A legal document should never be signed under duress. Especially be cautious about trusting smart talkers and signing away your property rights. Before putting your name on the dotted line consult a family member/friend, lawyer or financial expert. Give them time to scrutinize the paper.

If the feeling persists that the ‘rescue’ team has duped the victim, do not hesitate or delay but immediately contact BBB or any recognized government body. The authorities are alert about these roving wolves baring fangs underneath granny’s bonnet.

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One by one the chapters of the foreclosure story are unfolding. That which began in Wall Street has spread on to Main Street. The author of the script is the ARM or Adjustable Rate Mortgage. It initially gives the borrower a teaser interest rate, which is low. Later it resets at a much higher rate. The borrowers fall for the smart talk of the lenders who tell them that to avoid the increase they can easily go for refinancing.

Inevitably ARM’s gained in popularity during the first half of this decade. Brokers with the bait of commission dangling before them went all out to sell the mortgage scheme. The legal side with was purposefully not fully explained to the borrowers. But when the time came for the actual work of refinancing it was difficult to get in touch with the person whom the lenders had never seen. When the foreclosure went public prospective buyers began to crowd in. Such a situation spells trauma for a family with children.

Some are fortunate to refinance into a longer period fixed rate mortgage but others have to move out bag and baggage unable to repay mounting debts.

Chicago recorded 10,294 foreclosures in 2006 according to reliable sources keeping track of the situation. The number is 36% higher than the figures of 2005. This year and in 2008 the fear is that the numbers might rise to anything between 16,000 and 17,000.
During the early part of the defaulting crisis the families who were mostly affected came from the low or moderate income groups. However the scenario in Chicago is not quite so bad as that in other parts of the country because the economic picture here is diverse. A factory closing down in one place does not affect the whole of Chicago, unlike the tendency in places like Michigan and Ohio.

In Chicago foreclosures on prime loans jumped to 46% in 2006 as compared to 21% in 2002. Until the new players butted in Fannie Mae and Freddie Mac were the two largest loan wholesalers dealing with conventional loans. But the new comers saw to it that borrowers could not go back to the shelter of the traditional market by imposing fines for premature loan closure. The mortgage market became liquid trying to accommodate all and sundry. Solutions are being tried out but till then the borrowers remain in limbo.

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