Posts Tagged ‘indiana’

HANDS was certified by the US government Department of Housing and Urban Development, to handle foreclosures. It will give counsel on mortgage properties just when the problem of foreclosure was sneaking into Warren County.
Mayor Elaine Walker confirmed that seven local banks were working with HANDS, to set up offices throughout the region, in 27 counties, Owensboro and Elizabethtown to help borrowers understand better their mortgage deals. They offered to counsel potential purchasers of houses even at the pre-mortgage stage. The local leaders in their effort to navigate borrowers, struggling under foreclosure or immersed in the midst of bigger problems, had come forward several months ago to counsel them and show them ways and means of wading out of it. The government officials, bankers, Realtors, AARP and Kentucky Housing Corporation had organized a program wherein much of the problems of the borrowers at risk of running into a foreclosure could be bailed out. Their policies were updated regularly.
The foreclosure crisis had touched Warren County but was not as bad as it was in the states of Florida, California or Michigan, nevertheless people were feeling the pinch. The whole year of 2007 saw 230 houses being foreclosed in Warren County but this year in July alone there had been 183 foreclosure filings and 25 more were slated for August, 2008. Deborah Williams, Executive Director of non-profit Housing Assistance and Development Services, anticipated that the total foreclosure figure at the end of the year was quite likely to exceed 300 households.
According to Williams many factors contributed to the present crisis in the housing finance industry. Since the late 1970’s the US had not witnessed a slump of this stature and was caught unawares. Suffering was rampant, people with low income, middle-class families with good incomes were suffocated under pressure of inflation, and higher fuel costs fanned prices so that even people with very good savings account and an organized budget were affected, and topping the problem was the foreclosure and sub-prime lending debacle.
Williams said that some funds had been procured to help out borrowers in several ways. First, it could reach out to areas to spread awareness among borrowers the status of their mortgage loans, counselors could negotiate a lower rate of interest especially if it was through a partner bank, it could offer financial help to borrowers who suddenly is retrenched or suffers a major illness. The borrowers were only to dial HANDS for help free of charge.

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Numbers, statistics and analysis! But foreclosure numbers cannot measure the human pain and agony of being evicted from houses that have been their homes.

Marvin Davis and his wife drive past their old house and sigh to see weeds overtaking their once well maintained lawn. This was the house where they had raised their children. Five years ago they had surrendered to foreclosure but the pain continues to burn in their hearts.

Each foreclosure has a personal individual story to tell. For 64-year-old Davis the predominating factor was his ill health. He had bought the house twenty years ago when the weather was fine. He had a job and earned $26 per hour. Counting overtime he could pocket $80,000 per year. But things changed drastically from 1999 when Davis suffered a heart attack. Within one year he was compelled to retire. His wages were cut by half. While his income changed, the mortgage on his house remained the same. Medical bills began to pile up and he with his family had to leave the house before the foreclosure proceedings could complete its full run. They left. They could not pay. His company, General Motors nipped at the employee’s benefits like pension and medical help. He bemoans the fact that General Motors has forgotten about who built the company from grass root levels to Olympian heights. He warns that with the slump in the automobile industry today the country is doomed to fall tomorrow. When the funds were exhausted Davis lost the will power to put up a fight. Today he squarely blames the foreclosures, outsourcing of jobs and greedy business interests for his downfall. He did not spare the government either for doubling and even trebling property tax.Today the Davis family roughs it out in a mobile home just a few blocks away from their old address. The couple is dependent on the income of their children.

In May there were 1,055 houses in foreclosure or about to enter the dreaded zone in Madison County. In Indiana there were 4,909 foreclosure postings that calculates to a rate of 1:561. According to reports released by RealtyTrac on 10th July, foreclosures increased by 53% in June 2008 from June 2007. Across the country there were 252,363 foreclosure filings in June this year. It presents a grim national foreclosure rate of 1:501. Experts opine that lax lending practices coupling with adjustable rate mortgages against the background of an economic slump have contributed to this foreclosure crisis.

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Record numbers of foreclosures have hit the headlines. Defaulting in more than two repayments allows the lender to file a legal notice. California, Florida, Nevada and Arizona top the list in foreclosures. Massive job cuts in Ohio, Michigan and Indiana have also led to the foreclosure crisis.

Short selling has come out to be an alternative to foreclosing. It was common during the early 90’s but little known till yesterday. When the value of the estate is less than the loan amount, the owner works out a deal with the lender wherein both agree to sell it at the available market price. The borrower discharges the remaining part of the debt if the price collected is less than the amount initially lent out. The owner has to immediately vacate the premises.

In the case of foreclosure the house is taken over and auctioned if loans are not cleared. After this eviction process ensues. During the procedure the borrower can live without paying rent for a year, depending upon the specific laws of the region.

Between the two alternatives those who opt for short sale do far less damage to their credit rating than those foreclosing. In the latter case there is a bar to avail of a reasonable mortgage for another three years. In the case of short sales the papers show that the mortgage has been discharged. This means that within 18 months it is possible to take another mortgage.

Short sale does not depend upon the owner alone. The lender is persuaded to be interested if the price is at par with the current market rates. But if the lender calculates that he will get more by taking possession and selling it personally then why should they buy the idea of short sale?

The owner is advised to directly contact the lender or take the help of foreclosure prevention departments that have trained personnel to work out the negotiations beneficial to both sides. Legal advice is essential to see that mortgages are fully discharged because the owner can be later accountable for items missed out.

For those house hunting getting interested in a short sale deal is profitable. The price is usually discounted. Moreover the seller is interested in not damaging the property while vacating. Also buying a house through foreclosure is risky and definitely not for novices. Evicted tenants can get really nasty.

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House Predictor.com has conducted a survey after analyzing the country’s largest metropolitan real estate markets. It forecasts that within two and a half years 2 million homes will be foreclosed. 50 US states comes under this dubitable distinction. So far the site has been 85% correct in its conclusions.

Housing Predictor gives details about the foreclosure tsunami in America and how the virus of the sub-prime loan calamity is gnawing into the conventional mortgage market. Topping the list are Michigan, Ohio, Minnesota, Nevada and Colorado. Next in line and about to catch up are California, Alabama, Indiana and Mississippi.

The apprehensions of House Predictor are echoes of what The Center for Responsible Lending has already estimated. The latter gives a very grim picture. About 2.2 million houses will come under the hammer of foreclosure during the same period of two and a half years, as a result of the sub-prime hiccups.

Some researchers are of the opinion that the infection has not spread into all the real estate markets on a big scale. In eighteen states the local housing markets are appreciating. Signs of stabilization are apparent in 10 other property markets. A phenomenal increase in adjustable mortgage rates have spiked off this disaster. At the root of it all is unethical lending by agents and accepting of the same by borrowers without thinking of the risk involved.

Researchers have found a link between high number of foreclosures and mortgages made to sub-prime borrowers. The latter fell into the trap because their credit history was questionable. As such they agreed to any terms to somehow realize their dreams – have a house of their own. Little did they realize that they were mere stooges in the game of big money. The housing market of the country had hitherto appreciated, egged on by falling interest rates and liberal lending rules. This had gone on for five years only to slow down in some regions.

Another discovery was that mortgages made to first-time investors were being foreclosed. The U.S. Commerce department said that prices of vacant private houses had reached an all time high level. Many investors had bought properties with the hope of making a fast buck by selling it to a new buyer before the market reached its peak. However now the situation is that they can neither rent out or sell their properties without suffering heavy losses.

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Foreclosures in Indiana climbed this spring, along with interest rates and energy prices, which have been blamed for squeezing homeowners on a tight budget out of being able to make mortgage payments.

The Mortgage Bankers Associationreported that the percentage of mortgages that from 2005 to 2006, the rate of foreclosure rose to .43% nationwide. This figure is an increase from the first quarter, which had a rate of 0.41 percent.

Even with the increase, the new foreclosure figure is still low by historical standards and thus not overly worrisome to lenders. But it suggests that some borrowers are feeling pinched.

Foreclosure rates in the second quarter were highest for homeowners with adjustable rate mortgages, and bad or no credit. ARMs are usually the type of loan most readily available to those less financially secure, an ironic fact considering they are often the hardest to keep up with, as their rate is given to sudden increase. If rates continue to rise, and expect to see this trend continue in Indiana, which already has one of the highest foreclosure rates in the country.

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