Archive for the ‘Foreclosed House’ Category

To keep track of foreclosed houses Temecula has taken the novel step of starting a registry. It wants the lenders to lend a hand for the safety and cleanliness of the city. Councilperson Maryann Edwards admitted that although nothing can be done to put a stopper on foreclosures something could be done to update lists on empty foreclosed houses.

Edward and her team have been working for months to find out ways to address the problem of safety and health of the city arising from the innumerable foreclosed houses. Last week the city council passed an ordinance that aimed to lessen the negative results of the foreclosure crisis. She reiterated that although “no community is immune from economic distress” some cities are more affected than others. Here the role of the community comes into play to lessen the impact.

The ordinance has come in for criticism. It will require of the lenders who own the abandoned foreclosed houses to register these with the city authorities. This will make it easy for them to be contacted if and when maintenance problems arose. The lenders would be penalized if they failed in their responsibilities as owners of the units. Although violation may lead to imposition of penalties the underlying idea of the city fathers is to get cooperation from the lenders. During the foreclosure process the houses must be kept clean and safe. The registration will add teeth to the endeavours of the local authorities to keep the city shipshape. Registration will not entail any expenditure. But if life-threatening situations arise due to abandonment of houses strong legal action will be taken. For example it will be expected that all pools will have safety fences for protection of straying children.

Edwards reiterated that only in cases of extreme emergency would the authorities step in to drain the pool, for instance. There are liability issues at stake. The city does not want to intrude upon property rights. A fine line has to be drawn.

The neighbours of the foreclosed houses should be the first ones to report any out of the ordinary happenings. The next step would be to contact the code enforcement department of the city to check if it has been properly registered with the city authorities. If it has not been done then within 24 hours strong steps will be taken and a search will be made for the rightful owner.

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According to ForeclosureRadar that monitors daily foreclosure activity in California, the lenders repossessed property worth $10.4 billion in foreclosure auctions where the units could not be sold to third parties. But despite this figure there seems to be an increase in investor activities in these auctions.

Foreclosure is a judicial process by which the lender takes the permission of the court to take over the property under mortgage to realize unpaid dues. The first step in the operation is the issuing of a default notice to the borrowers. These default notices decreased by 2.5% in May. In all there were 43,011 new foreclosure postings. The daily average filings jumped by 2.4% however, counting to 2.009 being noted each day.

The Notice of Trustee Sale is served after 3 months from the default notice. By it the date, time and location of the foreclosure auction is set. Trustee sale notices increased by 15.6% in May, counting to 34,564 new ones.

Auction sales increased by 11.8% counting to 25,523 houses. Of these 24,831 did not receive any bid higher than the opening bid and thus became the property of the lender of REO. This new REO lot of properties came to be valued at more than $10 billion – thus creating a record.

Although 97% of the units came back to the lender there was an increase in sales to third parties by 34.6%. This scurry in buyers is viewed as a renewed interest of investors in the discounted properties. Once more the nest builders and investors are getting an opportunity to snap up an affordable deal.
Sean O’Toole the founder of ForeclosureRadar comments that it seems lenders have at last overcome their stubborn and unrealistic attitude about opening auction bids. Finally they seem to have woken up to the immensity of the problem and beginning to offer appropriate discounts. 86% of all the houses going into foreclosure auction were offered discounts amounting to 28% on an average. Sacramento, San Joaquin, Stanislaus and Merced counties witnessed the largest discounts in opening bids – about 31% to 37%. Riverside in southern California and San Bernardino saw houses being offered 27.5% and 25% discounts respectively.

There was considerable housing sale activity in Riverside and San Bernardino – witnessing an increase of 22% in May. This was the highest in recent years.

California has been one of the top rankers together with Florida, Arizona and Nevada in the national foreclosure race.

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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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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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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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Keeping in pace with the rising number of vacant foreclosed houses are problems relating to it. Nature hates vacuum and in the void enters snakes, weeds and human beasts otherwise known as criminals. The neighbouring community shivers at the growing menace although these houses are not in foreclosure. Shenee Martin walking through her locality look at the eyesores and are concerned about the weeds and deserted pools causing health hazards and danger. In Martin’ southwest Valley this is a common scene with nobody caring for the abandoned units. Squatters have moved in increasing fire hazards.

Marc Slavin works in the Arizona Short Sale Office and has been to some localities where all the houses have been left vacant, thanks to foreclosure. Once the foreclosure process is completed the lenders, usually the banks, take over the responsibility. But while the matter is pending the houses are in a state of limbo, belonging to no one. The lender has to be notified about the impending grave danger. The matter has to be taken up with them, says Slavin. The best way is to educate the people about foreclosures. Fear traumatizes the victims so that they bury their head under the sand. It is this that has increased the number of foreclosures. The best thing for the borrowers is to talk to the lenders and open up communication lines. Lately the banks are more than eager to sit down at the same table with the borrowers to thrash out matters. Slavin says that there are many alternatives to foreclosures.

But such arguments do not impress the neighbours who feel that the equity on their own houses suffer because of the foreclosed houses adjacent to them. Maricopa County had to place a sticker on one unit warning of the unsafe pool. It is such a common occurrence (that is getting worse by the day) that the some of the neighbours are cleaning the houses themselves. Sometimes rowdy parties are disturbing the neighbourhood as these usually ends up in violence. Gangs move in to strip the houses of whatever if left of fittings, doors and windows. Vagrants are having a ball moving from one house to another lurking in the dark.

Last Tuesday new 354 foreclosures were filed leading to a sense of despair that things will not work out easily after all. It seems there are even darker days ahead.

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There are some prize pieces to be picked up in the foreclosure market but it is not as easy as it sounds. The media gives out the feeling that it is all smooth sailing. But reality is far from it.
Not all the houses listed for foreclosure auction finally slips out of the hands of the owner. The latter will find tooth and nail to keep his hard earned gains. At the last minute they come up with some solution and snatches the house from the jaws of death.

Sometimes these foreclosed victims contact a real estate agent to recover as much of the equity as possible before surrendering it to foreclosure auction.

There are some who will offer the house for peanuts but generally these houses are not worth a dime. It is not because the buildings are dilapidated or the neighbourhood raises questions but because the property is riddled with multiple debts. The debts on a house valued at $375,000 may run up to $450,000. In such a case the house owner would be only too eager to hand over this basket of financial problems. Should anybody but a fool accept this gift?

Once a property is sold at an auction, automatically the past liens are wiped off. In that case picking up a $450,000 house for $350,000 sounds good but instant cash has to be produced then and there to clinch the deal. It leaves little time to apply for a mortgage loan.
Undoubtedly all this procedure cuts out competition. This is why a foreclosure auction is happy hunting ground for professional investors whose pockets are bulging with cash.

There is a three-month gap between foreclosure and auction but the bargains to be had during this time are not many. It needs a lot of calculation and peeping into the future. Buying 30% to 40% below the market value leaves little scope for turning over quick profits considering the trend of the market. One must persevere and afford the time. Those aiming to convert the house into rentals might decide to go 10% to 20% below the market price. The successful investors are full timers. These deals cannot be made viable giving spare time attention.
It is fair game for those who want to set up a home in these houses. For them 10% below the market line is a bargain.

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It is difficult to stay next to a house that has been barred up since the last six months. The overgrown garden is infested with rats and snakes. The swimming pools are stagnant and stinking. Lenders take on a step motherly attitude towards the foreclosed houses. Who will bother to take care of these orphans until the foreclosure procedure is duly completed? Neighbours in desperation for the sake of their own survival, are pitching in to give a clean touch and safe look to the locality.

Code enforcement departments are reporting increases in overgrown yards. High percentage of neglected reports came in from Osceola, Volusia, Lake and Orange as compared to the previous year. Seminole’s position is slightly better. Most of the reports are from abandoned foreclosed properties. A person about to be evicted cannot concentrate on the weeds in the backyard. The middle and upper income localities are worst affected. This is of course surprising for blue-collar areas. In some place the grass rises up to the hips.

Steps are being taken to bring back some sort of order and cut the grass down to its stipulated one-foot level. But the future owner will have to foot the bill. Fines are being levied in addition to the costs. But immediately the authorities are not equipped to tackle the problem of looking after so many units. The very nature of the problem is different. It needs immediate attention.
Neighbours are alternately helping but the problem is of such proportions that sporadic help is not the answer to it. On the practical side it devalues the area as many who are not in the foreclosure want to sell and get out of the abandoned eerie vicinity. Naturally prices tumble.

Some associations of house owners have allowed provisions that permit neighbours to mow the lawn. Funds are being raised for this that will later on be realized from the future owner.
The abandoned look is not only an eye sore but is also posing health hazards for the entire community. Each month code enforcement officials are dealing with more than one hundred instances of deserted houses. Vandals and drug peddlers are having a free time and this often leads to violence and murder. The neighbours can never tackle such situations without coming out unscathed in an unwholesome brush with the intruders.

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