Archive for the ‘Foreclosures’ Category

Foreclosures have a close relationship with the purse of the average American. This is the issue being raised by candidates and something that every one wants to know. Inflation is at its worst since the last 17 years. Unemployment is soaring and foreclosures are galloping on.

To many these are just numbers and figures read over breakfast prior to rushing off to work. Mortgage dues continue to be paid while gas and food bills are denting into the income. This will mean a dinner or two will be skipped. But taking all things into account the American of today is better than what he or she suffered during the last recession that came to a close towards the end of 2001.

But that is only side of the picture. But for many statistics are a reality. They have lost jobs and are losing out to foreclosures. Rising food and fuel prices have made them give up the last hope of being able to keep the houses that are their homes. These unfortunate Americans are far worse than what they were seven years ago.

Looking at the two pictures can it be said that on an average Americans are better off? It is one of the crucial questions before the presidential candidates McCain and Obama. It is a question they are asking the voters to mull over.

There is no definite answer. Economists will throw the ball from one court to another without hitting the goal. For most the answer lies in the personal situation. CNN will be conducting a survey finding out of the hopes and fears of the ordinary citizen coming from all walks of life. To begin with CNN has asked individuals to submit photos and video clippings. Meanwhile the individual can go ahead with personal assessment against the background of the foreclosure crisis.

The first thing is employment – the foundation of economic health is the job or work. So the question to note is whether one is employed, threatened or unemployed with slim prospect of getting another proper job. Across the country unemployment has gone up by 5.7% - the figure of the late 2001.

The next thing is income. The earning figure might be the same but is it bringing in the same amount of goods and services? Perhaps the hours of work have increased or may be the salary has gone down making one work more for less. Nationally the income has not kept pace with inflation.

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New statistics pouring in show that foreclosures are on the warpath scorning all relief measures. The housing market is getting worse without showing any signs of peaking.
Across USA foreclosure postings increased by 8% in July from June of this year. Banks repossessed 77,295 houses – a rise of 183% from the previous year of 2007.
Foreclosure is a judicial process by which the lender takes the permission of the court to seize a mortgaged house when the borrower fails to make payments. The house is foreclosed upon after the borrower is duly warned. It is then sold at a court auction by which the lender realizes his unpaid dues. Today there are so many foreclosures that the banks are suffering form indigestion – having swallowed more than they can manage. Vacant foreclosed houses are creating another set of problems. For every one house the banks manage to sell, two more roll into the foreclosure net.
Ken Cleypool is a realtor working with Value Point Financial. He says that his office is overwhelmed with foreclosure related work. They have 65 listed units and 90 more are coming in. Three years ago it was half that number. According to another analysis there are 40,000 foreclosures entering the market each month in USA. The forecast is that before this year draws to a close in December the number will reach a peak at 70,000. Nearly 20% of the houses waiting to be sold coming from the foreclosure category are damaged. This is the natural outcome of frustrated house owners who vent their rage on the property they could not enjoy. Cabinets, sinks and faucets are ripped out together with fittings and fixtures. The damage is sometimes so extreme that it becomes difficult to sell the units. There are huge discounts but even then maintenance and repair bills fill up the gap. Discounts from 25% to 20% are offered.
This is a grand opportunity for investors and also for first time nest builders. Lisa Walt of Grand Rapids helped her son to buy his first house. It might need repairs but nevertheless it was a bargain. The problem is that although houses are going for peanuts one needs a good credit to be able to make the offer. The foreclosure crisis has shaken the mortgage industry and the group has tightened their lending practices making it difficult to get loans.

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The remedies prescribed by Bernanke for mitigating the foreclosure crisis are to be discussed at a forum. He was forced into the role of a foreclosure firefighter. This made him take bold steps during the past year to battle the worst catastrophe the nation is facing since decades.

There are many who opine that he had gone too far. Bernanke wanted to avoid further economic slump. But the actions of the Feds have been criticized. The charges are that the taxpayer’s money is being put to great risk. By expanding the safety nets the financial bodies are being encouraged to go on with their gambling ways. This does not bode well for the future.

A high profile debate will be held in Jackson Hole, Wyoming. In the forum the past financial crisis and present foreclosure problems will be discussed as also the challenges facing Bernanke and various central banks as efforts are afoot to stabilize the financial markets across the globe. The Federal Reserve Bank of Kansas is sponsoring the conference. It will be a three-day event from 21st August 2008. The Fed policy makers will be given a reception together with other economists, academics and bank officials of standing. The primary attraction is a speech by Bernanke about financial stability related to the ongoing foreclosure crisis. From Friday morning there will be piles of academic papers to swim through accompanied by discussions.

At a similar conference last year when the foreclosure crisis had started baring its fangs, Bernanke had been thinking about lowering the interest rates. He advised the Feds to do so and accordingly it was done seven times right through till April. But the problem remains and from all indications it will continue to smolder right through the following year.

The International Monetary Fund has commented that the foreclosure crisis is the worst “since the Great Depression.” But Bernanke who had made in depth studies on the Great Depression said that the present situation is not even remotely akin to it, although it is “the most severe” episode in the era following World War II. The roots of the foreclosure crisis lie in lax lending practices given to borrowers without good credit history.

With elections round the corner the prime concern of the voter is foreclosure crisis. It is this that is causing the slump in the economy – something that both the candidates Obama and McCain will have to address.

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Foreclosures and related problems are nagging Congresswoman Laura Richardson, refusing to leave her. After being harried by default notices it is now the turn of code enforcement personnel to draw her attention to her house being a public nuisance. It does not speak well for her constituency.

The lawn in front of her house is piled with dead and dying foliage. The broken door is boarded but the gate is busted. The driveway is full of rubbish and debris. The windows have been patched up with brown paper but the backyard is full of rotting fruit and teeming with rats. Little wonder then that it raised the eyebrows of code enforcement officials.

Richardson had purchased the house following her election to the Assembly. Soon after it went into default and was foreclosed upon. Later court auction followed and the house was sold in due manner. But pressure was put on the mortgage holder to rescind the sale and return the house to her. Such a cancellation has never happened before. The guess is that of the two enemies breathing down its neck the lender, Washington Mutual, thought it would be easier to face up to a law suit filed by the buyer rather than stand up to the ire of a Congresswoman sitting in Washington for good many years to come. The purchaser of the house too thought it wise to settle the lawsuit quietly without a murmur.

The office of Richardson had nothing of worth to say about the code enforcement allegations. Steeper fines will be imposed unless she starts cleaning operations within 30 days.

Previously Richardson had explained away the foreclosure threat on this property and two other houses in San Pedro and Long Beach by saying that she had to take recourse to borrowing to fund her election campaign – she not being a wealthy woman.

Foreclosures and code enforcement scandals will not most probably come in the way of her re-election because she has practically no strong opposition in this region. One candidate is college teacher Peter Matthew. He has lost to her many times previously – the last instance being the latest Democratic primaries. Nick Dibs is a part time teacher who managed to secure 7,725 signatures as an independent candidate. Her opponents do not seem to be even remotely qualified to take her on. The ordinary voter down the road does not have much choice.

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There was a recent announcement that thousands of foreclosure victims who have been impacted by the failure of IndyMac Bank will get help from US banking regulators.On July 11th 2008, The FDIC (Federal Deposit Insurance Corporation) of Pasadena, California seized IndyMac – it being the third largest bank in the country. Modification proposals for 4,000 mortgage holders under threat of foreclosures are being considered. It is expected that within the next few weeks modification notices will be sent out to 25,000 borrowers.

Shiela Bair, the chairperson of FDIC said that their goal is to “get the greatest recovery possible on loans in default or in danger of default, while helping troubled borrowers to remain in their homes.”

In 2007 IndyMac was the 9th largest mortgage lender according to Inside Mortgage Finance. It has under its umbrella 740,000 loans either directly or through the services of others. The mortgage portfolio amounts to $184 billion. For many months Bair had been pulling up banks for not speeding up the process of loan modifications. Now is the turn of FDIC itself to practice what it has been so far preaching. Bair thinks that most of the modified mortgages of IndyMac will exceed its foreclosure value. She wants FDIC to play the part of a role model for other financial bodies to emulate.

The modified loans will be for most of the borrowers who are on their first mortgage either directly owned by IndyMac or serviced by it. It will be for those who are seriously in default. It will be only for the borrower’s primary residence. The modified loans will come with an interest of 6.5% - this being the current rate of Freddie Mac for similar mortgages. But rates will be lower for some other mortgages. The goal is to achieve a ratio of debt to income amounting to 38%.

Bair commented that the foreclosure process is costly as well as destructive. By modifying the mortgages at risk from foreclosures, the value of FDIC will be maximized making it easier to find a buyer for IndyMac. Simultaneously the returns to the creditors of IndyMac will improve.

Immediately after taking over the reins of IndyMac, FDIC had for the time being halted all foreclosures amounting to $15 billion mortgage loans. Bair said that servicers had been reluctant to proceed with modifications apprehending reaction from the investors. She is hopeful that with this new approach, confidence will be built up for all sides concerned.

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South Florida cities are no longer willing to lie low – they are fighting foreclosures tooth and nail. As foreclosures leave behind a trail of vacant houses it is the taxpayer’s who are feeling the pinch of keeping the neighbourhood safe and clean. Deerfield Beach has sanctioned money for the maintenance of foreclosed units.

The foreclosure numbers are galloping ahead in Florida without any signs of slowing down. The rates spiked in Broward and Miami-Dade counties within one year from 2006 to 2007. Miami-Dade reported 9,814 foreclosures in2006. This increased to 26,931 in 2007. In Broward County the jump was from 516 to 3,616 in 2007. This is having a chain reaction on those who are not foreclosed upon for indirect reasons. Property values of all are plumbing down with neighbourhoods becoming unsafe hemmed in by vacant foreclosed houses.

Dino Lapena is a resident of Deerfield Beach. He complained that the adjacent property has remained derelict since it was foreclosed. This is bringing a bad name to the entire locality that was once a ‘nice neighbourhood’. He said that a nearby house that had been worth $300,000 was sold for $180,000. There are no buyers despite the surge in vacant foreclosed units.

Deerfield Beach Commission approved last week the sanctioning of $50,000 as emergency fund to appoint contractors for mowing lawns, cleaning pools etc. Some of the fetid pools are breeding mosquitoes and disease is spreading. At places the grass is 4’ high reported Michael Mahaney the city manager.

Deerfield Beach noted 81 foreclosures in 2007 but this year it has already crossed 600 in June 2008. A meeting of the Code Enforcement Board was held to decide on the condition of the foreclosed vacant houses. Mahaney wanted as many as 37 houses to be declared unsafe and a threat to the locality. This will not solve the continuing foreclosure problem but it will somewhat address the safety and health related issues of the locality. The money will be realized by placing liens on the properties that will be dealt with. It is uncertain when the money will be realized but what is certain that prevention will be taken so that innocent children do not die from West Nile fever. When the board gives the green signal, clearing and cleaning operations will swing into action from Thursday.

Palmetto Bay leaders are taking similar action.

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The American families would now have the US Loan Assist to counsel borrowers on foreclosures and save them from losing their houses. The US Loan Assist announced its plans to offer services and aid to house owners in danger of losing their properties due to foreclosure. Borrowers, who were lagging behind on their mortgage payments or were facing an upward revision of their mortgage installment payment amount, would now be able to avail themselves of the counseling services to be provided by the US Loan Assist and decide on appropriate measures to avoid foreclosure.
The US Loan Assist offer multi-dimensional services that help keep the house intact and take care of the goodwill of the borrowers as well. The services rendered involve assisting the borrowers to renegotiate the payment plans or formulate a permanent modification of the original Loan Agreement, including VA loans. The US Loan Assist in also aid the house owners in the negotiation of short sales. The work of the US Loan Assist in handling short sales was to recommend to the borrower the precise time when the value of the house was less than the debt amount outstanding with the mortgage lender and negotiate with the lender to accept the net sale proceeds as a full pay-off of the loan due. The other activities of the US Loan Assist were to give Loan Refinance, Loan Forbearance, Partial Claim and Deed-in Lieu of foreclosure services.
SalesNexus.com work in partnership with US Loan Assist and have restructured their technology with the specific intention to coordinate US Loan Assist’s unique Affiliate and Homeowner recruitment processes. It provides online solutions for marketing automation and hosted contact management to businessmen in any industry. The US Loan Assist had partnered with SalesNexus.com in order to reach the maximum millions facing foreclosure within the shortest span of time by recruitment of Affiliates such as Realtors, Mortgage Brokers and Investors whose customers might be facing the axe of foreclosure.
Founder and CEO of US Loan Assist Clayton Sampson claimed that there were million Americans who needed immediate guidance and help in order to avoid the foreclosure problem and the strategy of the US Loan Assist was to work with Affiliates to speedily identify distressed house owners and reach out to them instantly. SalesNexus.com helped in this process.
Craig Klein, President of SalesNexus.com said that the US Loan Assist was doing a good job especially when the banking sector was in shambles in the housing loan business.

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Foreclosures are no longer confined to the urban and metropolitan centres of USA but are spilling over to the rural countryside. Foreclosures are spelling more work for the villages.

The code enforcement officers in Oswego and Montgomery are busy trimming lawns in vacant houses. It is straining their working power this summer. Till 31st July there were 49 bank repossessions in Oswego (zip code 60543) and 104 in Montgomery (zip code 60538) including the sub division of Boulder Hill. Most of these houses are lying vacant and neglected dotting the rural countryside.

Oswego village administrator, Gary Adams says that the village has been utilizing its own staff or appointing private landscapers to trim the grass of about 15 houses in the village during the past three months. The number of yards that need trimming has increased over the past few years. He adds that the number is not about a hundred requiring attention per day, but there are quite a few units that are falling apart with the wild taking it over. The administration has tried its level best to locate the lenders but when that fails they have to take on the task themselves. After all it is their neighbourhood that is at stake. The village has placed liens on abandoned properties that need urgent maintenance works. Adams added that in the end the village will get paid back when the deal goes through because the village liens will also have to be cleared before any sale is effected.

The community development director of Montgomery, Jane Tompkins, told the board of the village on 22nd July that about 80 houses in the village are in foreclosures. She said “As these properties become vacant, some lawn aren’t getting mowed; houses just aren’t being maintained.” Randy Caho is the code enforcement officer of the village. He has been spending a lot of time trying to locate he lenders, usually the banks and mortgage companies, regarding this maintenance issue. He is not always successful. Meanwhile a landscaping company has been given the job to mow lawns where the grass is overgrown beyond permissible limits. It is taking up a lot of time, energy and funds. The neighbours are a worried lot concerned about the vacant properties inviting all kinds of trouble. Primarily the values of the adjacent houses are going down. Then there is the law and order problem apart from spread of disease from unkempt property.

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