Archive for the ‘Foreclosures’ Category

Queens is the epicenter of the foreclosure crisis in New York. Councilman Joseph Addabbo (Democrat) is trying to focus on a stalled bill that will address the problem of vacant foreclosed houses.

Anjad Brijlall’s garden stands as a watered oasis in sharp contrast to the eerie vacant foreclosed houses in and around the street. Refuse and weeds strangle each other. Brijlall explains that no one has been living in these units for the last six months. He eagerly looks forward to having neighbours.

Addabo is vying with senior Republican Senator Serphin Maltese. The latter came in for heavy criticism for failing to push ahead with a bill that would permit the city to go ahead with cleaning up of foreclosed houses and then send the bill to the banks who are now the current owners. Addabbo bemoaned, “As the foreclosure crisis spreads, we’re seeing a ripple effect as property values plummet and surrounding neighbourhoods experience an increase in quality-of-life issue like graffiti and crime.” He was speaking in front of a vacant foreclosed house in Ozone Park.

Scoot Reif speaking on behalf of the Senate leader of the majority, Dean Skelos observed that after talks with Governor Paterson, a compromise bill had been passed in June. As per its terms the banks were to give 90 days notice to the borrowers before proceeding with foreclosure.

Addabbo however showed a report that showed Queens to be saddled with 9,297 foreclosed houses – amounting to a third of similar filings. The figures were given by reliable data provided by Center for Responsible Lending. Foreclosures had brought down the value of 411,929 houses in Queens – the amount in monetary terms totaling to $12 billion.

In one Senate District (15th) that extends from Maspeth south to Howard Beach are concentrated 14% of all bank-repossessed houses of the borough. The spokesperson of Maltese, Kristin Lord, argued in favour of the steps taken by the Senate in addressing the problem of the foreclosure related crisis. She cryptically remarked, “The Senate has been dealing with the sub-prime mortgage crisis long before Joe Addabbo got involved. We are trying t keep people in their homes.”

There is a strong opinion that the minorities and especially the Afro-Americans have been targets of the predatory sub-prime lending. Loans were forced on them by slick talking mortgage agents and now today they are the unfortunate victims of the foreclosure crisis that is throwing them out of the houses that are their homes.

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Even at the end of October record levels of foreclosures are causing grave worries. It seems that worse days are ahead. In the third quarter the number of foreclosures increased by 71%. It calculated to 8,500 houses going into foreclosure per day!

The foreclosure is a judicial process that consists of many stages. By it the lender seeks the permission of the court to realize unpaid dues from the borrower by foreclosing on the property that has been kept as security.

It is feared that before the year draws to an end over three million houses will be gobbled up by foreclosures – it is a million more than the previous worst predictions. Lenders are repossessing units at double the rate than the normal pace as per the findings of RealtyTrac. It calculates to about a quarter of all the houses that are in the housing market waiting to be sold. This will lead to a one third increase of the houses to be sold resulting in a further drop of prices.

For the investors the situation is tricky with the banks not be fully relied on as yet. The banks are staggering by the sheer number of foreclosed houses. They do not have the infrastructure to deal with so many modifications that would involve reduction of interest as well as the principal so that the people can continue to stay in their homes.

The situation is complicated because one house may have more then two or even three mortgages tagged to it. This will require negotiations with other parties.

The primary problem is the grouping together of the mortgages as securities that have been sliced and sold to investors across the world. The terms of these securities strictly limit the ability of the borrower to negotiate a new deal. The banks that service the mortgages by collecting the dues, fear that they might be sued if they go ahead with loan modifications so as to avoid foreclosure. These banks do not have any incentive to go ahead with workouts with borrowers.

The net result is that foreclosed houses are flooding the market causing further slump in the real estate market. There seems to be no way out of this cycle. The prices of most of the houses are less than the loan amount causing many borrowers to just walk away leaving behind foreclosed empty houses – not caring for the consequences.

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The advice is to fill in your debt but not to enter foreclosure. Are you deep in debt? Are there a lot of highly overdue credit card bills, medical bills and mortgage payments to prevent your house from going into foreclosure? Most importantly, are collection companies harassing you? Then the perfect solution for you is to seek counseling from a non profit credit counseling service. If you agree to their budget plan, they give you the required contacts for creditors. This just helps you gain more time to pay all your bills and prevent foreclosure. But of course, you must be careful so as to not fall into the trap of one of the umpteen for-profit scammers. Remember to keep an eye out for any organization affiliated to the National Foundation for Credit Counseling .
However don’t let your hopes rise too high. Travis Plunkett with the Consumer Federation of America, says, “Counseling isn’t for everyone.” Plunkett goes on to say that even though a credit counseling organization “can provide some breathing room” by negotiating reduced payments with creditors, “if you’re really in serious financial trouble, they can’t provide enough breathing room to help.”
Plunkett and Gerri Detweiler have authoured numerous books on consumer credit. They feel that filing for bankruptcy is your only alternative if your financial condition is in an especially bad state. If you think the only option left for you is to file for bankruptcy, then you should meet with a bankruptcy lawyer as soon as possible.

Attorney Stephen Elias provides the consolation that when your bankruptcy filing is public record, and it remains on your credit history for half a decade, it is not as bad as you might think. The above is most applicable when most of your debt is not secured. This means that most of your debt is not supported by some definite property (for example, a car or real estate) that can be foreclosed. Elias goes on to show that if you have already not paid several payments, “your credit is in the tank, anyway, and that stays on your record for seven years.”
Stephen Elias has been the author for many file-your-own-bankruptcy books. He feels that this is a really good method. He says, “First you have to file your papers. Thirty days later you go to a creditors meeting and under oath swear that your paperwork is correct. A minute later you walk out.” It’s as simple as that.

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Illegal undocumented immigrants are responsible house owners and have managed to avoid foreclosures.

Jose Perez is one of these. He bought a modest condo in northeast San Francisco for about $250,000. This is the first time he has bought a house. Jose has been closely following the rise and fall of the housing market but unlike others who bought property during the time of the property boom, he is not under foreclosure threat. The fact that has helped him is that he is an illegal immigrant.

The case of Jose Perez is not an exception. Many other illegal immigrants like him have contracted similar loans made by the citizens of the country, but they have not become delinquent. At the time of making the loan the illegal immigrant were exposed to stricter lending standards. Tim Sandos of the National Association of Hispanic Real Estate Professionals said that the performance of the illegal immigrants as regards warding off foreclosures is much better than the others.

Foreign-born legal residents had to have a special identification number –ITIN. In reality these numbers are widely known to be used by the illegal immigrants. The approximate estimation is that among those with ITIN who had taken loans the foreclosure rate was lower by 1.15% compared with 3.5% of other house loans in 2006.

Illegal immigrants are also suffering from the foreclosure crisis but their position is comparatively better because of these factors. In the case of taxpayer identification mortgages, bigger down payments were required prior to house purchase counseling. The mortgage rates were fixed and not floating. Another important point is that the immigrants are passionate about a secure future and they will “move heaven and earth to keep” the house for which they have given their sweat and labour. The house is a home to them and not just another ATM card.

Perez said that his wife stood beside him and took up a housecleaner’s job when he lost his job of a chef. Together they dipped into their savings to keep the family running. Twice they were late by a day in paying their mortgage dues. But soon Perez got another job and finances stabilized. The couple avoided foreclosures not only because of fixed rate interest and long-term mortgage involving down payment but also because of strong family base, grit and love for the home that was not just a house of bricks and mortar.

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Foreclosures victims feel that a two-year halt on foreclosures can help them. Lawmakers echo same sentiments and are proposing a moratorium on house foreclosures.

Sandra Applleberry of Grand Blanc is 53 years and is a pastor of a church in Flint. She is one of the thousands who are threatened by impending foreclosures as they are behind in their mortgage payments. This tense situation has caused the three senators of the state to support a bill that will put a hold on mortgage as well as tax foreclosures in Michigan.

The legislation would permit foreclosure victims a respite for two years according to court orders. The time could be worked out to reduce the amount of monthly payment. During the first quarter of 2008 there were 1,734 foreclosure postings in Genesee County according to the findings of RealtyTrac. It is the same as the last quarter of 2007 and an increase of 47% from the first quarter of the previous year, 2007. Michigan as well as Genesee County has been attacked simultaneously by foreclosures and high unemployment rates. Senator John Gleason (D-Flushing) sees this problem as exasperating. “It’s not ending. It’s getting worse.”

The situation began to get problematic for Appleberry from the fall of 2007 when her mortgage monthly amount suddenly zoomed to $1,700. Just at that time she had lost the allowance she got from housing. Her husband, Leslie is disabled and received payments from social security.

The ACORN branch of Flint mediated to stop an auction of the house of the Appleberry’s some month’s ago and is now pursuing the matter with the lender to bring down the interest rate to 9.5%. Sandra is optimistic that some sort of agreement will be reached – something that they can afford. Hitherto a proposal by the lender had been well beyond their means.

The legislation will also permit the owners of houses to ask for a freeze on property tax for two years. The plan allows Michigan State Housing Development Authority to issue bonds that would ensure mortgage guarantee during the time of the freeze. The money from the bonds would be utilized to help foreclosure victims about to lose their houses.
In the past a tax postponement plans had helped many out of tax foreclosures. In six years 1,700 families have benefited. ACORN hopes to utilize a $7.8 million grant to help more families threatened with foreclosures.

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Foreclosures have caused real estate prices to drop in 24 of the 25 metropolitan areas in USA from what it was one year ago.

The biggest drop was noted in Las Vegas with a slump of 33%. A drop of 28% was noted in Los Angeles, Phoenix, San Francisco and Sacramento. Of the five worst performing markets lashed by foreclosures California tops the list.

Michael Feder of Radar Logic says that the purchasers are getting more and more shy about buying houses. The talk about drop in the real estate is keeping them away.

The number of foreclosures in the country increased to a record of 2.75% of the entire number of mortgages during the second quarter this year according to Mortgage Bankers Association. The foreclosed houses are usually being sold at 20% discount as per survvey conducted by Lehman Brothers Holdings Inc. These discounts are pulling down the prices of those units that are not coming from the foreclosure category.

Although the House rejected the bailout bill of $700 billion, the Senate passed it on October 1st. Pressure is being put on the House of Representatives to reconsider the matter. The earlier version had been rejected. The legislation will permit the government to purchase the soured assets of the financial houses that were in trouble. The House Republicans favoured two clauses – raising the limit on the amount the FDI insurance levels and authorizing the regulators to check asset-valuing rules. The uncontrolled assessment of property is being blamed for the foreclosure crisis.

The bill that will struggle through the Congress will have a dramatic impact on the housing market. Three foreclosure tides hit the country according to Moody’s Economy. The first one rushed in during the first half of 2006 when the investors realized that the boom days of housing was over and walked away. The second one hit the country in 2007 when those who had taken sub-prime mortgages during 2005 and 2006 were faced with steep rise in interest rates. Unable to cope with it they fell into foreclosures. The third wave is due to falling real estate combined with rising unemployment. California has noted the biggest fall in prices.

The only exception is Milwaukee that saw the price of houses increase by 2.9% in July in comparison to what it was in July 2007. Charlotte too in North Carolina saw a modest increase of 1.5%.

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The husband of Carlene, John Balderrama is reflecting and going over the incidents that led to the foreclosure related suicide of his wife.

On that fateful Tuesday afternoon John had a premonition of something going wrong when Carlene called him on his cell phone. She just told him to return home immediately and abruptly rung up. Balderrama is a plumbing expert working for a construction company based in Denver. He was at his work site in Andover when his wife called. Sensing trouble he kicked off in his truck driving hard for an hour to reach his home at Taunton. He was met by the police on his front lawn. In a haze he remembered half noting the foreclosure auction notice posted on the door of his modest house.

In respond to his anxious queries he was told that his wife was dead! 54-year-old Carlene lay inside the house in the basement. The wound appeared to be self-inflicted. It was a shotgun blast from one of John’s hunting rifles, which he used to keep, locked in a case. Initially he thought she was murdered. John recalled that she was allergic to rifles. He kept them because on in November for seven days he would go hunting deer with his buddies. He was surprised that she managed to find the keys and load the gun.

The news of Carlene’s foreclosure related suicide hit the headlines across the globe. Official investigation is still continuing.

Just an hour before the police came upon her body, Carlene had faxed a letter to her lenders, PHH Mortgage Corporation of New Jersey telling them in no uncertain terms that if they foreclosed upon her house they would find her dead. The suicide note also had another line, which was not initially released at the time of the news flash. It read, “I hope you’re more compassionate with my husband and son than you were with me.”
John continues to stay in the house with their 24-year-old son.

The PHH had cancelled the foreclosure auction that was scheduled to be held that day at 5 pm but it is not clear whether it was done before or after receiving the fax. Neighbours did not know about the shooting but they noticed that people were coming to bid at the foreclosure auction.

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Opinions differ as to Virginia’s ranking in the foreclosure race. Is Virginia the third lowest or is the state in the middle?

On Tuesdays auctions are held on foreclosed houses on the steps of the court. On June 10th Heath Greathouse stood on the top of the steps of Kanawha courthouse and read out the notice of default. Passersby hardly paid attention to him. Heath was foreclosing on a 67-year-old woman from Dunbar who was a health care worker. The Notice for Sale was being read out. None attended – neither the owner nor the bidders.

According to a law dating back to the 19th century it is mandatory for the trustee to read the sale notice aloud in the courthouse where the property is situated on the day the sale is scheduled to be held. After this reading out session the staff of the county registers the sale particulars in the Record of Trustee Sales Boom.

The present mood of the sluggish market dominated by the foreclosure crisis, is such that generally none attend the sales and the property becomes the property of the lender – is repossessed by the banks. Greathouse concluded the deal by saying loudly “Sold to the bank.”

Foreclosures have created jobs for many – jobs of a different nature. Greathouse is in the employment of Liberty Title Services of Parkersburg. He was doing the reading as a representative of Riverside Trustees of Martinsburg. The lenders were foreclosing on behalf of Ace Mortgage Funding Company that had its headquarters in Indianapolis.

Six miles away from the scene of foreclosure sale, the woman of Dunbar was sleeping. She had just lost her property. Later she bemoaned that she had “been working overtime to make these payment. I’m doing the best I can, but I’ve had to take care of my mama too, and that’s just how it is.” She shrugged, as there was nothing else to be done but accept the inevitable foreclosure sale. She declined to be named, as things were already tough. But she permitted the Sunday Gazette-Mail to take a photograph of her front door. Ironically the doily hanging from the door read “Bless our home as we come and go.” Her property was the 181st foreclosure sale noted in Kanawha County in 2008. In 2007 there had been 357 foreclosure listings while in 2000 the number of foreclosure postings was 220.

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