Posts Tagged ‘bankruptcy’

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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Attorney Pray dealing with consumer cases focusing on bankruptcy opines that after having read an article on foreclosures he is at one with the columnist Paul Wenske (MoneyWise September 16th). If it becomes absolutely impossible to keep the house then the homeowner must open talks with lenders and negotiate about selling it via a realtor or a homebuyer professional like himself. The realtor may be able to fetch a better price but if that road too gets blocked then the investor is the next best bet
Some of his clients are running around with cheques to different loan offices just to keep up with interests. These offices are franchises run by ill trained personnel blatantly flouting consumer protection laws and bullying clients to believe that bankruptcy clause would not help them – rather they would be criminally prosecuted for bad cheques!
In the article mention was made of a suit (Quik Payday Inc v Stork) in which consumers of Kansas were given extra protection. But how to enforce it taking into account the type of borrowers? The statistics of these loans speak volumes. One lender during 45 months lent $967,550. It meant that the company pocketed $485.165 as financing fees. It is little wonder that with this ratio of returns for investments made makes the running of the show attractive.
During the Carter presidency certain lending practices were reined in after the famous Bert Lance case. But with the latter’s discontinuation as per federal regulations, the people began to use credit cards at random. When this reached a saturation point the licensed loan predators began to move in for the kill. Pray does not have the specific answer to the question that arises – something should be done so that reasonable loans are available while the business of providing these continues to continue.
Another writer compliments the columnist on an article about secrets to a successful career and behind the scenes action to meet up ends – MoneyWise Kids & Money – 9th September. The writer asked his 7-year-old daughter about her future plans. The child vacillated between an artist who would exhibit her creations in a museum to being a nurse like her mother. The writer wishes his parents had in their turn spoken about choice and options. Today’s child can be given the push by setting the right talk and example.

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Foreclosures are hitting the headlines leading to a feeling of panic everywhere. Will I be the next victim? At this juncture it is vital to know what it is all about. By focusing on one region it is possible to gauge the general trend.
In New Hampshire foreclosures are on the rise. A lender uses the process of foreclosure to repossess the house that has been kept as security for the advancing of a loan, when the borrower fails to meet monthly commitments. The borrower can now sell the house and realize dues inclusive of costs.
The most important thing is to never get trapped into such a situation. As soon as warning signals blink immediately without delay contact the lender. Do not fall too far behind. Then the situation cannot be salvaged. The typical lender is also averse to the foreclosure process. It spells loss to the lender as well. Secondly seek professional advice from registered counselors.
Forbearance is one of the alternatives that may be negotiated. The lender will excuse a payment or agree to a special repayment schedule. The forbearance agreement must be in writing and the borrower must understand all that is contained in the terms.
Another escaper route is loan modification. The lender may modify the terms by lowering interest and extending the period.
In partial claim the lender may stake a partial claim on any insurance that the borrower may have taken out on the loan.
If all the above avenues are blocked then the borrower might opt for a pre-foreclosure sale. In doing so some equity might be saved and also the tag of foreclosure will not be attached to the borrower’s credit history.
Sometimes the bankruptcy clause of chapter 13 might prevent foreclosure. It requires legal expertise.
The last resort is deed-in-lieu wherein the lender may be agreeable to accept the property in lieu of foreclosure. The process stains the borrower’s credit but it is not quite so bad as a foreclosure.
The main thing is to forearmed against scammers. Beware of too-good-to-be-true stories. Do not be trapped into becoming a tenant. Be shy of unethical consulting teams who do not have any license to ply their trade. They will just pocket fees and disappear. Apart from the money precious time will be lost also. New Hampshire has recently passed legislation to protect foreclosure victims and penalize offenders.

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In five years no foreclosed house has fetched such a handsome price. In Hunting Hills a sprawling mansion has brought in $870,000 for the lender who took possession of it from one William Crick, in a foreclosure sale – a record for Roanoke region in five years. The average value of this type of property in this locality is anything between $60,000 and $100,000.

Crick is one among many why are losing palatial dwellings. Crick had taken a housing loan from Wachovia Bank on the understanding the initial payments would include only the interest. Later the rate would be adjusted. The newly built unit on 6,000 square feet had a movie room, spacious master bedroom and garages above and below ground level. Crick’s monthly payment for $909,950 property was $4,597.14. He could afford the high amount being general manager of one of the renowned companies in the automobile industry, Berglund Chevrolet. His income was $20,000 per month. But suddenly his dealership came to be terminated in early 2006 for unknown reasons. Immediately he put up the house for sale. At that time it was a seller’s market. In December 2006 he filed for bankruptcy listing debts amounting to $1.3 million more than whatever assets he had. In the end of August the bank put up the house for sale in the market. The estate was in a sorry estate with tall overgrown grass. The inside of the house was however in shipshape condition. All that was required was mowing down the grass to make it ready for the showpiece sale. Each house has a story to tell.

Foreclosures are surging through the nation with the highest waves hitting Virginia. Here it was up by 300% in July and 900% in August as compared to the same months in the previous year. Across the country the gain was 115% against 2006.

The foreclosure process consists of four steps. First the borrower goes into delinquency by being unable to pay monthly dues. The lender then sends foreclosure notice. This is followed by auction sale and repossession. There are many reasons why the borrower stumbles – unforeseen medical expenses, job loss, divorce etc.

But these cannot account for the tsunami that is surging through the country. Under the foreclosure lash houses are falling like ninepins. The accusing finger points straight at the sub-prime lending sector for this fiasco.

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Borrowers took loans to buy a house and make it into a homeBut unwittingly they got into a financial snarl which is compelling thousands and thousands to abandon their hearth and home. It is a foreclosure crisis of jumbo proportions.

The sub-prime loans were an outrage – an insult to those with weak credit. Today it is not confined to the point from which it started but is spreading like a virus to infect other kinds of mortgages. This is the opinion of a renowned mortgage banker’s association. Last June the foreclosure notices rose to 0.65% - 0.58% jump over the first quarter of this year. Three consecutive quarters have thus performed a hat trick!

One lawyer has come forward to help 30-year-old Mendez who is a victim of multiple sclerosis and is partially blind. In May 2006, when she first got into trouble many lenders came forward to help her financially. One of these brokers from South California asked her to sign certain papers and somehow persuaded a reluctant Mendez to do so. Few days later the original lender contacted her and Mendez decided to opt for the latter.

The South California person did not object and she took the money from the prime lender and went about repairing her small house. Few months later default notices began to come. It was a grand confusion with everyone assuring her that she was being taken care of. Too late she realized that two loans had been foisted on her! Now she did not know who to pay what. Nobody could be contacted. She is now lagging behind.

The person from South California could not be contacted. The other lender, New Century who is facing criminal charges for accounts error in securities has filed for bankruptcy in April. Mendez’s lawyer filed a suit in Marin Superior Court to halt the sale of her house. It claims damages from both the lenders for willful cheating and fraud. The Judge granted a restraining order stopping the sale of Mendez’s house. Unfortunately Mendez could not produce a bond to secure the bond. Therefore the order had to be vacated. The lawyer is now confused about the next step. The insurance agent of Mendez is trying to interest another lender to take over the mortgage and somebody else to provide the security bond. Mendez keeps on hoping and praying.

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A disproportionate tax bill is a blow from an unexpected quarter for one who has failed to meet mortgage dues. Yet the bill accuses the person of having made an extra earning! This is unbelievable but true in Michigan and other parts of the country.
Those who negotiate with the bank for some unusual refinancing scheme are usually at the receiving end when they sell their houses for an amount, which is less than the outstanding dues. It is a three-pronged attack. First the victims lose their home and hearth. Secondly the amount they get is less than what they owe. Last but not least comes the tax bill from unsympathetic authorities. Many are ignorant about tax rules because so far real estate valuation has been rising. But the curve is now falling. If the bank forgives $20,000 on a $100,000 loan then the former is calculated to be an income with tax tags attached to it. Matters are spinning out of control in Michigan where recession is on an all time high binge.
A Michigan Democrat is up in arms against this and trying to change this rule before the year comes to an end. Unfortunately it will only be a temporary reprieve and will apply only to the original house of the borrower. Many had availed of easy loans to move into up swinging localities with better facilities. On 31st August President Bush gave his support to it as a part of the package helping house owners. The banks too approve of the scheme, as they do not benefit from foreclosures. The chief economist Richard DeKaser of National City Corporation in Cleveland is of the opinion that if changes are made and there was a tax freeze, borrowers will have more leverage for negotiation.
The only way to escape the dragnet is to file for bankruptcy. If the debt is repaid under the cloud of bankruptcy then tax is not levied. A second way out is to fill out a complicated tax form (982) and claim to be insolvent – their debts were bigger than assets. The average person is ignorant about such fine escape routes. Only a seasoned tax consultant could steer the victim out of the maze. It will not pull down ‘For Sale’ notices overnight but will certainly act as a cushion for future falls.

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So far the going has been good for those with poor credit to try and own a house. In the sub-prime market not many questions had been asked and loans had been easy. But with the foreclosure raging through the country mortgage lenders have been tightening their belts making it difficult for house loans to be availed of. It is inevitable that such a situation would arise because after a grace period of two years or so monthly payments more than doubled. Borrowers just could not pay as flexible interest rates arbitrarily increased. The property slipped into foreclosure. Borrowers and lenders are now blaming each other.

It was a profitable venture for lenders. Since the credit history of the borrowers was poor they were charged high interest rates for being granted the favour of a loan. But the operation turned sour when with the spiraling of default numbers the very base of the exercise became shaky. Flow of money coming into the kitty came to a standstill. The fact that there was very little equity left in the units the borrowers could easily walk off without a backward glance. The property was not worth much to cry over and in any case their credit was bad. There was nothing new to lose!
Overnight shutters began to be pulled down on sub-prime divisions. Only a few limped along. Some filed for bankruptcy while others pruned the number of staff. Among the prominent ones who filed for the protection of bankruptcy laws in April are New Century Mortgage Corporation and its auxiliary Home 123 Mortgage Corporation The waves touched each corner and pocket of the country. The nation’s largest lender, Countrywide Financial Corporation, had borrowed $11.5 billion from 40 banks. The crisis had pushed its smaller cousins into insolvency.

Those lenders who had diversified income avenues and who have mixed and matched sub-prime with conventional prime loans will be able to surface from this catastrophe. There is little or no hope for those who had put all their eggs in the one sub-prime basket. They do not have a spare one to clutch on to.

It is estimated that 325,000 units are already in the foreclosure net. The quarterly rate during the previous two years was 230,000. It is this point from which the entire credit market is being infected says prominent economist Covarrubias from the University of Texas.

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A bankruptcy filing has delayed a project in South Salem, Marion County. Developer Morford filed protection from creditors claiming shelter under bankruptcy laws just two hours before scheduled start of foreclosure proceedings.

Morford, from Portland, is in charge of PJM Fairview. His attorney Bradley Baker took the help of Chapter 11 to file the petition in Marion County Courthouse. Fairview owed the lenders, OFO Partners more than $13.5 million for a 104-acre property in South Salem. It postponed the foreclosure but it also meant a big delay in implementation of the project. But Morford has not given up hope to make his dreams come true. He is frantically working to refinance it.

Under the legalities of Chapter 11, PJM Fairview keeps possession of the property but Morford must submit to the court reorganization plans delineating how he plans to meet the demands of the creditors.

On the other side of the fence, OFO Partners, under the guidance of their attorney Brent Summers is sharpening their swords and waiting to ask the court within few days relief from the postponement that has adversely affected them. The aim it to complete the process of foreclosure and satisfy his clients.
Morford had bought the land from Sustainable Fairview Associates in 2006 for about $21 million. He planned something that would be sustainable as well as environment friendly. It would be located next to Pringle Creek Community – the latter being a green-development coming up on the remaining 32 acres of Fairview. Pringle Creek is not included in Morford’s holding and remains unaffected by plans gone awry with its next-door plot.

Morford’s plans for development envisage a project with mixed facilities. It will stand on more than 240 acres at 2250 Strong Road SE. There would be 816 single family home blocs on the south. On the north there would be multi-family homes, space for offices and shops as well as a 5-acre park. A site plan has also been drawn up for a school.

Gordon Root, the owner of another creditor does not think that these are anything but teething troubles and will not derail Morford’s project. Fairview owes Root Holdings more than $6 million. It too has started foreclosure proceedings for 145 acres. He is however of the opinion that for the welfare of all, every one should come forward to give Morford’s spectacular dream a big push.

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