Posts Tagged ‘massachusetts’

Foreclosures are the mere symptoms. The call of the hour is to dig for the root causes of foreclosures. Once that is found then the symptom can be uprooted – but not before. No solution will be effective if the remedial arrow is blindly thrown in the dark.

The usual run of thinking points to the sub-prime mortgages with floating interest. But despite the media rage about it, this is not the root cause. Some opine it is the change in real estate prices.

A Boston Globe article commenting on the increased number of foreclosures in Massachusetts said that this was due more to dropping house prices rather than the rising mortgage interest rates. The survey is based on the findings of the Federal Reserve Bank of Boston. Unaffordable loans do not directly cause foreclosures. During the economic slump of 2001 falling behind in mortgage payments was quite common but foreclosures were rare because the real estate continued to go up. Thus by selling the houses the people were able to escape foreclosure. Debts were repaid and there was enough left over to start life afresh without stains. The increase in house price acted also as an incentive for borrowers to try hard to become current in their mortgage payments. It was worth the while to keep the house. The house was a valuable asset and became even more so with each passing day. In the falling market the converse is true. Today the value of the house has gone down. So what is the point of struggling to keep it? Little wonder then that foreclosures are exploding. The report concluded that the rise and fall of housing prices play “a dominant role in generating foreclosures.”

The report points to the fact that the recent attempts by local and federal government to help the borrowers might prove to be ineffective.

Henry Paulson, the Treasury Secretary is attempting to freeze the monthly payments on mortgages by putting on hold the rise in interest. It does not show much in depth thinking because the primary cause of foreclosures is not addressed. It is declining equity that drives foreclosures and not the other way round. To take the bull by the horns it is time to find out what is causing this fall in real estate prices. It will need a lot of digging that will bring out many skeletons in the cupboards.

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Foreclosures are gobbling up exclusive towns – not even the sophisticated exclusive ones like Nantucket, Edgartown and Weston. This shows that the foreclosure debacle in Massachusetts is going further downhill. Today some the richest towns are being bitten by the foreclosure bug. The sky jump in these areas is more than the average of the state.

Massachusetts’s foreclosures have risen by 37% in the first quarter compared to the same period in 2007. The exclusive zones of the state have caught up late with the foreclosure crisis. The buyers who purchased ritzy villas or gated accommodations in the exclusive zip codes are now struggling to meet mortgage payments like the others in the state. This is further weakening the economy and causing real estate markets to tumble. There are no boundaries anymore. Foreclosure the great leveler is hard at work. Jeremy Shapiro opines that ‘communities rich and poor, urban and suburban and rural are all being impacted.’

In the forefront are towns with triple digit jumps – Belmont, Oak Bluffs and Nahant with 200%, 217% and 240% spikes respectively. Many rich suburban towns are also entering the club of Bay State communities of 25 members where the foreclosure rates have doubled. On the islands foreclosure numbers skyrocketed in Edgartown, Tisbury and Nantucket by 100%, 150% and 113% respectively. In some of the fancy western suburbs there were dramatic increases in foreclosures. In Medfield, Boxboro and Weston it increased by 114%, 144% and 138% respectively.

With the sliding down of the general economy and especially the real estate market even the wealthy are finding it difficult to wiggle out of the foreclosure net. To add insult to injury there are numerous job losses. The alternative of selling the house and escaping the ignominy of foreclosure is no longer available. The loan amount, more often than not, is greater than the fallen value of the mortgaged property. At the root of the problem is the real estate slump.

There is talk that those investing in real estate might avail of a rare opportunity on student rentals in Boston. In the two neighbourhoods of Allston and Fenway, packed with students, 518 apartments and 24 properties are up for grabs. The sale of so many is raising eyebrows. With rents at an all time high it is feared that the investors are out to put on the squeeze taking advantage of foreclosed victims searching for houses.

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In Massachusetts certain types of properties are more in number in the foreclosure market during February. This is from a report issued by The Warren Group – publishers of Banker and Tradesman. The worst hits are the two and or three family houses in comparison to the one family houses and condos.

As compared to February 2007 foreclosure petitions (2,232) rose by 27% in February 2008 (2,835), they decreased from January 2008 (3,212) in February 2008 by 11.7%. Foreclosure deeds increased by 145.7% (350) from February 2007 to February 2008 (860). These had increased by 7.5% from January 2008 figures of 800.

Analyzing the petitions further it is noted that 635 were against owners of two to three family units. This amounts to 23% of all the petitions filed. These types of houses comprise 11% of the total number of houses in the region. February 2008 saw 1.8 petitions filed against two or three family houses for every unit of sale of that kind of property in the Massachusetts.

In February foreclosure auctions rose dramatically by 21.1% from what it was the previous year. In February 2007 there were 981 foreclosures while this year, 2008, there are 1,189.
It has been known for sometimes that multifamily houses are the greater targets of foreclosures. The figures clearly show up the disproportion. This is affecting seriously the owners as well as renters.

All the petitions do not finally end up in foreclosures. Some borrowers manage to sell off their houses, refinance or find some other alternative to halt foreclosures. Scheduled auctions are announced in the newspapers but that does not mean the final countdown. Before the auction takes place many changes do take place.

The lenders are collapsing with the weight of foreclosures – this judicial procedure being time and energy consuming. The abandoned houses are attracting criminals and raising health problems. The houses do not fetch money. Lenders want to dispose of the innumerable units. But with goods out numbering demand it is a buyer’s market and the real estate market is at an all time low. Moreover the credit crunch has caused many mortgage companies to close shop. So buyers have nowhere to turn to for availing of loans for buying houses. Foreclosed houses do not fetch tax or revenue. This has caused the administration at all levels to worry about their pockets. Meanwhile dispossessed evictees are causing endless worry to the vote seekers – the politicians.

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Government officials together with executives from prime mortgage lending firms of Massachusetts are to meet today to discuss avenues of escape for the victims of foreclosures.

Dan O’Connell, the secretary of Housing and Economic Development of the Patrick administration has taken the initiative. He corresponded with executives of top ten mortgage firms in Massachusetts asking them to participate. This is a leak information from a person who has seen the letter but chooses to remain anonymous. The meeting is to be held in the offices of Daniel Crane, the Director of the Office of Consumer Affairs and Business Regulation. The agenda however was not delineated.
Kofi Jones, the spokeswoman of O’Connell, confirmed the news but did not add anything new. According to her O’Connell was not available for comment. She said that a number of players were being invited to sit at the same table and thrash out a solution.
Sub-prime loans, taken out during the last few years, are mainly responsible for the increase in foreclosure filings in Massachusetts. Suddenly the loans have become delinquent.

Borrowers with poor credit history had been awarded the loans and it was very popular at the time of real estate boom because the initial rates were low. It tempted people to own property in costly Massachusetts. The borrowers wrongly estimated their own capacity to continue with repayments. The end of the road came when interests took a sharp swing upwards.

Governor Deval L. Patrick has already suggested enactment of laws to put a check on foreclosure rates. It included a clause that would require the applicants to sign a form relating to the fixed or adjustable rate of interest. Previous to this recent move, the Patrick administration had called a meeting of lenders, activists, and regulators in April. Suggestions were made asking the State to provide the money to refinance loans so that owners do not get thrown out on the streets.

The Banking Commissioner of Massachusetts state, Steven Antonakes had said in April that he had managed to obtain a temporary freeze for 11 property owners in this region and was already working out ways and means to help others. This action followed on the heels of the steps taken by Patrick in instructing members of his administration to go all out to help the hapless victims by directly negotiating with the lenders.

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No less a person than the Attorney General of Massachusetts, Coakley, came down heavily against pretentious rescue teams that tempt house owners facing foreclosures to sign over their ownership to temporary buyers nursing a false hope that in the long run they will not lose the roof above their heads.
The recent surge in foreclosures compelled the office of the Attorney General to take emergency measures against clever tricks that are impoverishing many. The borrowers income is often falsely inflated to make matters simple. As many as four lawsuits have been filed against firms that tempted owners to hand over property deeds to ‘straw purchasers’. Reviews show that recently there have been several cases of similar firms that never keep their promises. The Consumer Protection Division of the Attorney Generals’ office is of the opinion that in fact there has been no single instance of them coming forward with a genuine helping hand. These firms are riddled with fraud and abuse. About a dozen of these so-called rescuers operated in Massachusetts.

Coakley’s is however in the dark about similar steps being taken in other states.
The ban would spell civil penalties only for those firms that worked for profit. It will not hamper the activities of genuine non-profit housing groups. Temporary ownership is taken to allow the victims time to solve the problem. A way out is to allow property transfers to extended family groups.
The regulation did not come in the way of legitimate bailouts wherein the lenders relax terms of repayment and offer new mortgages, which does not involve surrender of ownership.
Massachusetts Mortgage Bankers Association welcomed the move of the Attorney General and had no reservations about it curbing legitimate operations.
Coakley said that she had to use emergency powers to impose immediate bans on foreclosure takeovers because of an alarming growth of such scams. There was a jump of 70% from last year in the state. Massachusetts had always had a low rating but this high brought it at par with the national ratings. After ninety days the ban could be made into a law by state legislators following public hearings.
Coakley’s office is also engaging voluntary attorneys to help foreclosure sufferers.

The Attorney General, Secretary of State and other lawmakers have suggested a string of legislations to check foreclosures and its snowballing effect on real estate prices and sub-prime facilities for helping needy borrowers.

No less a person than the Attorney General of Massachusetts, Coakley, came down heavily against pretentious rescue teams that tempt house owners facing foreclosures to sign over their ownership to temporary buyers nursing a false hope that in the long run they will not lose the roof above their heads.
The recent surge in foreclosures compelled the office of the Attorney General to take emergency measures against clever tricks that are impoverishing many. The borrowers income is often falsely inflated to make matters simple. As many as four lawsuits have been filed against firms that tempted owners to hand over property deeds to ‘straw purchasers’. Reviews show that recently there have been several cases of similar firms that never keep their promises. The Consumer Protection Division of the Attorney Generals’ office is of the opinion that in fact there has been no single instance of them coming forward with a genuine helping hand. These firms are riddled with fraud and abuse. About a dozen of these so-called rescuers operated in Massachusetts.

Coakley’s is however in the dark about similar steps being taken in other states.
The ban would spell civil penalties only for those firms that worked for profit. It will not hamper the activities of genuine non-profit housing groups. Temporary ownership is taken to allow the victims time to solve the problem. A way out is to allow property transfers to extended family groups.
The regulation did not come in the way of legitimate bailouts wherein the lenders relax terms of repayment and offer new mortgages, which does not involve surrender of ownership.
Massachusetts Mortgage Bankers Association welcomed the move of the Attorney General and had no reservations about it curbing legitimate operations.
Coakley said that she had to use emergency powers to impose immediate bans on foreclosure takeovers because of an alarming growth of such scams. There was a jump of 70% from last year in the state. Massachusetts had always had a low rating but this high brought it at par with the national ratings. After ninety days the ban could be made into a law by state legislators following public hearings.
Coakley’s office is also engaging voluntary attorneys to help foreclosure sufferers.

The Attorney General, Secretary of State and other lawmakers have suggested a string of legislations to check foreclosures and its snowballing effect on real estate prices and sub-prime facilities for helping needy borrowers.

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2 family conveniently located to highway, shopping and restaurants. First floor unit has been completely renovated, floors, walls, bath & plumbing, Kitchen & applicances all electrical. The unit has not been rented since renovation. The second floor is rented with great tenant. Property has full basement with access from both units and new washer/dryer hook-ups. Plenty of off street parking and fenced in back yard. There is a garage on property that accomodates both units. This is great for owner occupied or investment.

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Find Massachusetts foreclosures, foreclosure, HUD, Fannie Mae, VA, hud home for sale, Real Estate Investing, va home, bank foreclosure, foreclosure listing, Real Estate Investment, real estate foreclosure, government foreclosure, hud foreclosure, reo, home foreclosure, va foreclosure.

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Federal Housing Administration (FHA) is a part of the Housing and Urban Development (HUD). FHA offers different insured mortgages programs such as Section 203b Insured Mortgage, Section 255 Home Equity Conversion Mortgage (HECM)-Reverse Mortgage, Insurance Premium refunds, Graduate Payment mortgage Insurance (Section 245) etc. FHA also offers Down payment grants such as the AmeriDream, Nehemiah Program, Housing Action Resource Trust (HART), Consumer Debt Solutions and Partners in Charity. The FHA loan rates offered are 6.128% APR for 30 year fixed and 6.241% APR, for 15 Year Fixed.

Let us now consider some of the individual programs that are offered by FHA. The 203 (b) mortgage Insurance provides mortgage insurance for individuals who are going to purchase or refinance a property. The loan sanctioned is offered by a lending institution or a bank and it is insured by FHA (HUD). The Section 255 Home Equity Conversion Mortgage or reverse mortgage offered by the FHA can help senior homeowners age 62 and above to convert the equity of their home into a regular stream of income which is repaid when they no longer occupy the home. The FHA Premium refunds and Distributive share is a program under which the FHA commissioner decides how much of the premium should be refunded when a loan is terminated. There are certain criteria for qualifying under the premium refund program. The eligibility are that the loan should be acquired after 1^st September 1983, paid-up an upfront mortgage premium at closing and a non-defaulter on the mortgage installments.

The FHA also offers different down payment grants. The AmeriDream program of AmeriDream, Inc. offers low and moderate income families to help get home ownership. AmeriDream, Inc. is a non-profit organization that offers ten percent of the money for a mortgage down-payment or for closing a mortgage. The eligibility for the AmeriDream Inc program is that the individual needs to qualify for a loan from any financial institution. There is another program offered by the FHA which is known as HART. Under this program offered by Housing Action Resource Trust, potential homeowners are offered assistance to buy a home. The gift fund offered by HART can be up-to $15000 which is non-refundable.

The different schemes offered by FHA have help American’s build their own homes and live the American Dream. All these initiatives have led to a record 67.7 percent people in America owning their own homes in the year 2000. This figure of home ownership is the highest ever recorded in American History ever.

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