Posts Tagged ‘new york’

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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It is a commonly believed myth that when buying New York foreclosures for sale, the property will come with a title that is clouded by judgments and liens. This only applies to pre-foreclosed and auction bought properties. If the lender has successfully bid for a property and become the new owner of the property, they will ensure that the title is clear.

This becomes apparent because the lender is generally the senior lien holder and at purchase of the New York foreclosure for sale, all other junior lien holders will be wiped out. The mortgage is no longer in existence and to all intents and purposes the lender owns the property and can now decide exactly what they wish to do with it. The lender who purchases the property at auction will also pay any back taxes, courts costs and all other costs associated with the ownership of the property.

In instances where the lender does not attend a Sheriff’s sale and bid on a property, this should ring warning bells to the investor. It means they do not want the property and it could be sue to the fact that there are more superior liens of judgments on the property; such as IRS and tax liens. These liens take precedent over any other liens. This should be carefully noted by the investor as he does not want to lose money when investing in New York foreclosures for sale. On the contrary, he is in the business to make a profit!

In and effort to recoup losses on the defaulted mortgage repayments, the lender will bid on the property and secure a clear title. No lender what to go to the time, money and effort of foreclosing on a property, only to have it taken away for a couple of thousand dollars owing in back taxes. Once the lender has settled these costs, they will add them to the asking price of the New York foreclosure for sale, and re-sell it with a clear title.

Nowhere does it state that a lender has to sell a property for the price they paid for it at the Sheriffs sale. They may even make any necessary repairs to make the property saleable and this too will be added onto the asking price.

Lenders are not bending over backwards to offer cheap New York foreclosures for sale to the public. They do want to sell these but they are after all lending institutions, they have shareholders to answer to and are in business to make profits not losses.

Selling repossessed property is by no means a new thing, it has only come to light more in recent years, due to the amount of repossessions increasing, and type of public exposure the facts of this situation are receiving.

Through years of experience, lenders have developed many methods to dispose of the New York foreclosures for sale on their listings. These are not just given away for a song, no lender wants to do this and they have found ways to dispose of these properties with the minimum of loss.

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The USA hunting industry is blatantly targeting foreclosure pets. It is their very nature to take aim at animals when they are at their most vulnerable. They seek out polar bears when ice floes are melting, nesting doves in September even after they have been protected for decades as well as protected antelopes in pens for collecting head trophies. The gruesome list is endless showing up man at his beastly lowest. The animals they bravely target have little or no chance of escape – like foreclosure victims.

Foreclosed pets have become a term in foreclosure language to refer to pets that have been abandoned by their foreclosed owners. The guns are being focused on them at a time when these hapless creatures need help most.

The Sportmen’s Alliance of USA has announced that the community should not participate in any programme aimed that helping hundreds and thousands of pets suffering from the foreclosure crisis. It is not just an empty threat. They drive home their message in no uncertain way.

The Humane Society of USA after noting the rising demand of animal shelter and volunteers because of the problems arising from the foreclosure crisis, launched an Emergency Fund to help the quadrupeds. The unfortunate dogs and cats understand little about investments bubbles and bursting. The fund will be utilized for setting up animal shelters and organizing rescue groups right across the country. In sympathy with the specific nature of the tragedy many humane humans in business or otherwise have loosened their purse strings to help. The HSUS is operating as the Clearing House for these funds rolling in.

The Meijer chain of stores in the Midwest decided to come forward with $5,000 for the foreclosed pets. The money was collected in a unique way by taking $1 per customer who enrolled for the shop’s Pet Photo contest flashed on its website.

At this juncture this group that claims to represent the hunters entered the scene. It has a grudge against HSUS for the restrictions placed on it for targeting guns at captive hand-fed creatures fenced in enclosures. The hunters were actually after guaranteed trophies and as such anything the HSUS or HSLF did, came up against their ire. They have gone to the insane point of sentencing doomed foreclosed dogs and cats to horrendous death. The Meijer was threatened to such an extent that it has withdrawn from the good work it was doing for the foreclosed victims.

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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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The foreclosure crisis worsens but the victims are fighting it and struggling to continue to stay in the houses that are their homes. The Government together with the mortgage industry is going all out to address the problem that has gone beyond the boundaries of the playing fields of the lenders and borrowers. All are adversely affected. Recently two initiatives have been taken that will help the foreclosure victims.

A plan was launched in Detroit by the HUD (Housing and Urban Development) meant for borrowers with loans that have been insured with FHA (Federal Housing Administration). It is meant for those who have bought a house for the first time. It will permit the lender to submit an insurance claim on the mortgage when it arrears, but before it starts to fail. HUD has the task of overseeing the work of FHA. It now transfers the mortgage to be serviced by another company. The borrower then comes into the picture and the loan is restructured to affordable levels.

Steven Preston of HUD said that the plan would serve a double purpose of helping the borrower as well as the neighbourhood. One foreclosure alone has the power to depress the entire locality by bringing down the value of the houses not in foreclosure. Buyers are attracted to the foreclosed houses as theseare sold at a heavy discount. Moreover empty houses attract crime and disease causing damage to the law and order of the area.

In New Jersey another kind of step is being taken with the lead being given by the Federal Home Loan Bank of New York. It lends money to about 300 local banks in places like New York, New Jersey, United States Virgin Islands and Puerto Rico for the purpose of financing mortgages. This programme is termed Housing Assistance and Recovery Programme (HARP). The Magyar Bank of New Brunswick (New Jersey) was lent $6 million. Magyar Bank works in tandem with the First Baptist Church of Lincoln Gardens in Somerset, New Jersey. The latter has a network of counseling services and locates the house owners who are at risk from foreclosures. Then negotiations start with the lender to pull off foreclosures in place of a viable affordable solution. The lender is asked to buy out the loan. Magyar bank pumps in 70% on the assumption that the lender will write off the remaining 30%.

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Statistical evidence shows that over half of all Black borrowers who refinance in 2006 were made to swallow sub-prime mortgages. Latino borrowers faced a similar situation. Together they will suffer a loss ranging from $164 billion to $213 billion in the surging tide of foreclosures that have been wrecking havoc since that time.

Each family has a tragic tale to tell – individual and personal that is far more damaging than figures and numbers. The agony cannot be gauged by statistics alone.
A staggering number of people were sold sub-prime loans.

One woman whose literacy level did not permit her to understand the nitty-gritty of mortgage ins and outs. An agent sold her a string of refinancing loans that summed up to more than $100,000. Now the house she bought in the 70’s is going to be lost.

The unethical brokers sniffed out people who for generations never had the chance to build up a good credit record. They were told that a godsend chance had come for them to turn their equity to advantage. Some people are skeptical about the high talk of banks and lenders. But many others tended to trust them and the image they represent. They believed that the lending institutions have the best interests of the borrowers uppermost in their minds. It is this trust betrayed of the Hispanic and Afro-American neighbourhoods that the lenders betrayed.

Many who rose to the bait are now in the foreclosure net. They continue to have a guilty feeling of having done something wrong. This negative bent of mind is very important to the lender community because it prevents the victims from retaliating.
The foreclosure victims are traumatized into inaction.

To Afro-Americans the equity on the house is a very important thing – it is part of real wealth. There is no denying that a huge wealth gap exists between the black and while Americans. The lenders steered the minorities into high-risk loans in a very subtle way with the Judases among the Blacks who captured their prey in Black churches and meets.

Although the Afro-Americans and Hispanics will absorb about half the economic loss due to foreclosures they are definitely not half of all those who borrowed. The Black borrowers ranging from all economic levels were two to three times more likely to be saddled with sub-prime loans than the Whites.

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This summer has been the winter of despair for the million-dollar Hampton Mansion that has been caught in the foreclosure net. It is an 18,000 square foot wonder on Bridgehampton. Foreclosure has reduced its value from $27 million to a mere $19.5 million!

The mansion had been constructed by Burns Development on a sprawling 4 acres. It has hosted top shows like the Hamptons Designer Showhouse in 2006. It is an annul exercise wherein the latest trends in house designing and home decoration are highlighted. The mansion boasts of a pool, an elevator than can accommodate five persons and a unit known as ‘a flower –cutting room.’ As soon as the exhibition was over the mansion went into the market but ultimately came to be foreclosed towards the end of the year for lagging behind on a mortgage worth $4.4 million.

The Corcoran Group of New York holds the mortgage for this 8 bed roomed mansion with 9 and ½ bathrooms. Corcoran representatives were not available for comments. Jacob Benaroya is the president and manager of Biltmore Capital Group based in New York. He commented that of late the tentacles of foreclosure have caught many million-dollar-plus houses but not one is so grand and costly as Hamptons Mansion. Biltmore has no direct dealings with the mansion in question but the firm deals with other properties in the locality. He added that these special houses pose special problems when it comes to selling.

During the first quarter of 2008 banks initiated foreclosures against a record number of borrowers (12) in East Hampton and South Hampton according to New York Post. Among the other Hampton high-ended houses is the home of Janice Becker. His multi million-dollar estate on Wyandanch Lane is being foreclosed upon. Another giant in the advertising field, Ransel Potter is defaulting for $1.8 million mortgage on his unit. Previously it had been thought that the grime of foreclosures could never stain these exclusive properties. But the impossible has become possible. It proves that the wealthy too can be stupid while managing their wealth.

There is a feeling of vicarious pleasure among many who think that the Hampton rich lot deserves this foreclosure stigma. They walked in and made proud mansions emerge on fertile farm lands trading ridiculous fund raising parties and nothing more. The hope is that soon another wannabe will take this as an opportunity and snap it up for a song.

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With the surging waves showing no signs of receding, New Yorkers continue to be hemmed in by foreclosure crisis. It is alleged that fraudulent sub-prime mortgage lending has led to this meltdown. Each single foreclosure has a snowballing effect and affects the surrounding neighbourhood – its environment and property values.

Foreclosures are a costly judicial process. It is more profitable for the lenders, in this critical situation, to keep the borrowers in the houses that are their homes, so that they can continue to pay monthly dues. Abandoned properties become a headache for municipalities as these attract crime and disease.

The State Legislature has come forth with specific plans to help the foreclosure victims in New York. Last year there were about 3,000 foreclosure postings in Erie County. The findings of The Western New York Law Center show that 20% of these postings are related to the sub-prime adjustable rate mortgages. To see that that the laws are finally passed the two parties must be jointly committed rising above petty politics. The governor’s plan has a good framework that should be acceptable to all. It entails the sending of timely foreclosure notice to the borrowers, who are then to contact housing counselors. The latter will be able to guide them through the negotiating process. The new law will make it mandatory for lenders and borrowers to sit across the table in the initial stages of the process.

So far it has often been the case that the proper authority with whom negotiation can be done remains unidentified. But now it becomes compulsory that the appropriate person or authorized persons must do the talking without prevaricating. Lenders have complained that the foreclosure operation is too lengthy and a quicker way out would be welcomes. In Erie County the foreclosure process takes 135 days to run through its full course. The governor’s bill addresses all the issues in detail

A Wall Street Journal reports that by the latter end of 2006, about 61% of the sub-prime loans had gone into foreclosure. But most of the borrowers had enough credit scores to enable them to opt for conventional loans having better terms. It is generally understood that the lender will consider the repayment ability of the borrower after the expiry of the ‘teaser’ rates. It is the duty of the lender to see to the interests of the borrower and not to try to trip him or her anyhow and somehow.

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