Archive for the ‘Foreclosed Properties’ Category

The country is in the grip of foreclosure crisis – the worst in 16 years. The Federal Reserve and other allied banking regulators have taken the unprecedented step of appealing to the mortgage lenders not to rush on with proceedings. The man in the street has been surprised by the move – the likes of which they have never heard of hitherto. The authorities can only make appeals as the securitization transactions are contractual and anything contradictory to it cannot be enforced. It is not a good sign as it exposes the hard fact that except for appealing nothing can be done to rein in financial bodies playing havoc with loans. The government is giving priority to helping citizens keep their home fires burning in their own houses. Those who have provide services of securitized mortgages are asked to reach out compassionately to distressed house owners.

The strident appeal has come straight from President Bush and also from Federal Reserve chairperson, Ben Bernanke. They assured of standing beside those who had been trapped into teaser loans. Bush spoke of a plan to permit government housing administration to try to help besieged borrowers keep home fires burning. It is not just a mere coincidence that the joint statement is made a day ahead of a hearing of sub-prime collapse before US House Financial Services Committee.

Foreclosure figures are alarming. These point to worse days ahead. Nearly 1.3 million sub-prime mortgages is about to reset to higher rates this year. In the following year another 1.2 million will follow suit. It is the combination of high interest rate and low property value that has caught house owners unawares. Late payments and or debts rose to more than 14% during the first quarter of 2007 – making it the highest in four years. In July this year the number of foreclosures across the country doubled from what it was last July.

Sub-prime mortgage agents themselves are in trouble and many have been forced to down shutters as credit supply from investors has begun to dry up. Many jumbo lenders are desperately trying to contact borrowers for their own interests. For the lender foreclosure procedures are time and money consuming. Idle property is dead weight. They want money to trickle in. Generous options about refinancing and modifying rates are being made with Wall Street averse to real estate business.

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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 manufacturing industry is in the doldrums. Unemployment is high forcing people into the foreclosure process. The number slipping into its grip is rising by the day. Munster ranks among the highest foreclosed regions. Indiana, Ohio and Michigan have been reeling under shutdowns and vanishing jobs. This triad accounts for 20% of the foreclosures countrywide. Most of the foreclosure victims are also victims of unemployment. They are losing their homes and the fires of their hearth are soon going to snuff out.

Indiana Bankers Association sends out the advices that if there is some equity left on the property then fall back on it. It will steer you through. Realtor’s associations in Indiana have been doing a lot of digging. Their opinion is that what we are seeing today is the outcome of years of sub-prime mismanagement that is now affecting the locality as well as the nation. Experts apprehend that more than 2 million adjustable rate mortgages (ARM) will push in for higher rates all across the country within a few years. Indiana has a high rate of house ownership – as high as 75%. On the negative side it ranks second with the largest number of foreclosure listings. Indiana comes 44th in the recent counting of one-year price growth done by a federal body dealing with the relevant subject.

It is the thinking of the borrowers that went awry. They bought houses that they could not afford. They never gave a serious thought to the fact that after the honeymoon period of low rates the latter would swell and balloon up. During the first years an adjustable rate is low – being known as teaser rates. These tempted buyers to opt for the non-conventional loans. The borrower kept hoping that things would look up on their economic front within few years. But in reality this never happens. There is logic behind everything. The main causes were low appreciation rates of properties, affordable housing and high loan-to-value loan rations.

Operations are underway to assist people. One of them involves more down payment assistance that does away or lessens cash down fees. Those who plan to buy property must first become financially literate and understand all the legal and other implications. Secondly a minimum amount of foresight is a must. The most important issue is creating jobs. Without jobs there cannot be home fires burning.

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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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In only three months time Round Rock, the home of the Stony Point Tigers registered 248 foreclosures. This makes it the 182nd most foreclosed in the country. In Texas it ranks 6th. Pflugerville ranks 450th in the country.

Mortgage experts of the locality pin down the cause to the usual disasters that grips the populace from time to time – divorce, death and unemployment. The situation gets aggravated with natural calamities. Unfortunately this reasoning is not holding water this time.

McCoy, President of Mission Mortgage points her experienced finger at the investors who speculated in Austin. Based on promises investors would walk in and buy up units. But reality did not live up to their dreams. These investors are now having problems tackling their mortgage payments in their home territory. So they want to get rid of units here in Austin, which is having to shoulder other people’s crosses.

Mortgage broker Bray of Lone Star Lending warns borrowers never to sit idle on default notices. Communication lines between lender and borrower must be kept open at all times. The lender doesn’t want the house but wants the money coming from it. It is to their interest to see that the borrower is doing the utmost to keep the home fires burning.

There are five clear instructions. Take the initiative and contact lender for discussion. Secondly arrange for debt counselling with the object of refinancing the deal. Thirdly if the house has equity then the monthly payments may be lowered for a short term with high interest loan to tide over the immediate crisis. Fourthly grace periods are not impossible to get. Lastly directly sell the house. This option is much better than slipping into the foreclosure coma. A foreclosure victim has rights. Know it.

There are agencies of renown that buy these loans and do whatever is feasible to help people keep the roof above their heads.

Many Americans are losing hearth and home because of defaults in the sub-prime market but that is not happening in Texas. Of 7,000 loans here not a single one is ARM. It is not saleable here in Austin, Texas. This means that the people here are not those who cannot afford the readjustment in instalments. It is good news for the market. Texas is standing out as an island in the turbulent sea all around.

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It was no easy matter for Coconut Grove Playhouse to extricate itself from a jumbo financial mire by raising more than $470,000 to calm down a creditor and plug a scheduled foreclosure aimed to slice away a part of its property. The portion of the Playhouse property is a vacant plot next to a theatre – The Bike Shop. It was scheduled to go in for auction on Wednesday morning.

Playhouse is South Florida’s oldest theatre set to celebrate its half-century when it was closed down in April 2006. As a fallout of this imbroglio the employees were let off with a big question mark on their dues. The long-standing controversial art director, Mittelman, resigned in May. Other board members have followed suit.

The legal representatives of the principal creditor James F. Perry & Co confirmed that Playhouse had taken a loan of $350,000 on November 2004 but by last Tuesday night they had repaid the loan together with interest and incidental fees in its entirety. It was settled with the payment of $471,705.51 involving a lot of hard work, grit and determination.

Playhouse chairperson Spivack was not available for commenting on how the money was raised. Former board members of Playhouse who had a stake in the Perry loan, Wiener, Steinberg, Mitchell and Ruwitch, were also silent on that point.

Miami-Dade County’s department for cultural affairs actively came forward to sort out the knot. Most of the dues of the former employees have been cleared. The sanction of a grant for improvement of the building from Florida Department of Sate amounting to $125,000 went towards clearing some salary dues. But since some are still pending the theatre as well as Mittelman remains on the default list of unions. No actor or manager can work here until debts are cleared. The county came forward with a budget of $500,000 to help managers, lawyers and accountants who had worked on the salvage operations. Theatre lovers had bought advance subscriptions for 2006 – 20007 but to their dismay the theatre closed down without refunding their money. However the cultural affairs department of the County has come up with a plan why which these subscribers will be able to see play at other theatres for the specified season, in the region without paying further money. The hope is that if Playhouse reopens the subscribers will be again offered vouchers.

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One out of every 47 houses is popping into the foreclosure oven making it one of the hottest cities in the grips of the reigning real estate crisis. It ranks 8th among the leading 100 cities buzzing with foreclosure activity during the first half of this year. The figures have been released by one of the premier tracking groups online, based in Irvine.

The apprehension is that things are going to get worse. 82 of this group of 100 consisting of the prime metro cities in USA are reporting a year-over-year escalation in the number of foreclosures. The numbers are taking everyone by surprise. Things were bad but nobody thought it was that bad. Kern County stood 8th in the first quarter of this year.

According to reliable figures the foreclosure pot continues to boil in California. Stockton, Sacramento and the combined Riverside and San Bernardino region having the dubious distinction of being including among the top 10 rankers. The tracking group makes use of records given out by the counties. The figures are inclusive of default notices, pending lists, sales by trustees and real estate owners. Stockton ranked first. Here one out of every 27 units came under the foreclosure cloud. Among the prime ten defaulters were Las Vegas, Detroit, Denver, Miami, Memphis, Tenn. and Cleveland. The least foreclosure activity was noticeable in Richmond and Va.

The foreclosure fall out is the result of many factors – mismanagement of sub-prime mortgages combined with general economic ill health of the country leading to unemployment. If the reasons are multifarious the results too are many pronged. With too many houses up for sale the real estate prices are plummeting. This is touching those units that are not directly under the foreclosure hammer. The mortgage industry has tightened its belt with the result that there are not enough buyers for houses. The banks are sitting with idle properties and empty coffers. This is sending alarm signals to brokers in Wall Street. The Wall Street sneeze is making international stock markets catch a cold. Closer home vacant houses are happy hunting grounds for vagrants and addicts leading to law and order problems. A new group of advisers have cropped up trying to help foreclosure victims. Politicians take this as an opportune moment to fish in troubled waters and make loud noises about cooling the heat and switching off the oven.

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