Posts Tagged ‘washington’

One can hear the clink of the sword – it is expected to be brandished any moment. The Bush administration has come to an understanding with jumbo lenders and a freeze will be announced for five years. These are the lines of expectation. No details are as yet available.

The reaction to the news in Detroit even without official confirmation is positive. At least the government is doing something. In Michigan the foreclosure problem is exacerbated with unemployment issues –7.7% unemployed. It is the highest in the nation. This point alone will determine how effective other palliative efforts on foreclosures will be. The problem is jobs. Let the people have jobs and foreclosures will automatically be arrested – is the view of many.
In Lansing the state legislature passed a law lowering fixed rate loans but it is unsure what its fate will be in the Senate. Lately Washington has been showing increasing interest. The Federal Housing Administration has been modernized. It can raise more amounts for lending purposes and stringent laws have been passed to rope in predatory lending. Democrat Debbie Stabenow from Michigan has brought another proposal for waiving taxes on those mortgages that are settled for less the original value of the loan. Stabenow rues the slow pace of action because it is speed that is of vital importance in this matter. The delay is also being questioned. Some want quick fixes while others decry hasty action might lead to more foreclosures. Republican Walberg voted against a law that would curb aggressive lending saying that this would result in less money being available for loans, which would have an adverse effect on the entire market. However he clarified that he was in general for regulating the industry. This is especially required in Michigan that has no controls over agents.

An appropriation bill is most likely to be passed for sanctioning $200 million to non-profit organizations engaged in foreclosure counseling. Counselors play a key role in resolving the delicate issue of bringing together borrowers and lenders to thrash out matters amicably.
Meanwhile everyone is waiting with bated breath for the final announcement by Bush. The President has always harped on the fact that the taxpayer’s money should not be used to bail out those who had made lousy loans. It leaves many questions unanswered – who are going to benefit and how are the lenders going to react?

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The statistics in Washington, Sacramento and the Inland Empire is grim with one out of 43 residences stained with foreclosure. Officials are scrambling with funds, legal steps and plans to help the house owners stay in their homes and snub predatory lending methods leading to foreclosures. But the clock is ticking.

Speaker Nunez is pressing for a special Legislative session to deal with the increasing foreclosure crisis. Democrats have joined in proposing remedial packages. Washington remained concerned with the national fall out. Paulson, the Treasury Secretary conferred with bank representatives and lenders to find out ways to keep interest rates at bay. He wants more positive action that shows quick results. At-risk borrowers need to be identified quickly.

Governor Schwarzenegger of California saw to the sanctioning of a $1.2 million education awareness programme to help both lenders and borrowers wiggle out of the stigma of foreclosures. The forthcoming four to six years will see thousands of California’s residents threatened by a scheduled jump in interest rates.

The government fears that if foreclosures are allowed to go unchecked there will be a further slump in the real estate market causing increasing loss – a vicious circle of no return. So the plan has to be such that people can stay in their own homes and yet the mortgage industry will continue to be active and healthy.

One idea is to encourage lenders to continue with the low ‘teaser’ rates for some more time. It will allow the market to get back on its rails and consequently the borrower will get a chance to refinance with the house price stabilizing. Then it will be a smooth entry from the floating into the fixed prime mortgage zone before defaults start off. Schwarzenegger had made similar suggestions after talking with four lending giants in California. California tops the offenders in the foreclosure crisis with a ratio of 1:88.

The stumbling blocks the new plans are coming up with is that the traumatized borrowers are reluctant to even talk to the lenders although the latter have sent out signals that they are willing to be amenable. In more than half the foreclosure cases the loan officials have failed to reach the borrowers. But soon it will be too late.

In Sacramento the Democrats have funded $10 million for counseling purposes. Bans will be imposed on bonus incentives for agents and also on penalty charges.

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Michigan ranked 6th in the country with 15,565 foreclosure in some stage of foreclosure or the other. It showed an 11% rise above July figures and a 126% high jump from the month of August in the previous year. The numbers tagged to Michigan are inclusive of 3,534 units that went into delinquency, 6,572 that received notices for trustee sale and 5,459 that had already been taken over by the bank.

In Wayne County the foreclosure versus household ratio is 1:87. It ranks 4th in the country. The highest is in Modesto, California with 1:79 during August. The five top rankers are Nevada, California, Florida, Georgia and Ohio.

What is causing grave anxiety is that these figures are just the tip of the iceberg. In the near future more foreclosure activity is expected when a sizable number of sub-prime mortgage loans will reset the interest rates.

The sub-prime debacle is a clear case of a dream that has turned into the reality of a nightmare. The scheme was launched to help those with weak credit to be able to avail of house loans and live under their own roof. But predatory lending on the part of lenders and greed on that of the borrowers made things go awry. After the honeymoon period of low monthly repayment plans when the rates began to adjust to higher figures the borrowers found it impossible to make ends meet. It most of the cases the rise was more than double. One by one the houses fell into foreclosure.
There are many factors behind the inability to pay increased rates. Firstly many had invested in housing units being sure that property prices could never fall.

Thus they expected a neat profit. But the opposite happened and there was not enough equity left to clear dues leave alone profits. Secondly initially the value of the houses had been inflated to expedite the process of a handsome loan. But with time the balloon burst and the real price showed up. Thirdly the income of the borrowers was not always correct and this led to the inevitable. Added to these was the usual cycle of death, disease and calamity of unemployment that might well overtake any family anytime. All these factors contributed to the landslide that is showing no signs of slowing down despite help from Washington.

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Mortgage defaulters who are facing foreclosures are waiting for help from Washington. The authorities however have taken a wait and watch stand to the fallout resulting in years of lending practice without being backed by sufficient credibility.

The market is showing signs of self-recovery and the overall economy seems to remain untouched. At this point overreaction is uncalled for. Also encouraging are the indices showing solid consumer spending and low unemployment rates. The stocks too have hit records buoyed by corporate profits.

The Chairman of Federal Reserve opines that while on the one hand the authorities are obligated to end fraudulent lending, they have to be cautious about suppressing responsible lending

On the other hand the advocates for the affected consumers point out that this has come has a rare chance for the law to strengthen its lending rules. To substantiate their argument they point to foreclosure statistics.

The National Association of Realtors expects sales of present houses to fall by 4.6%. The home price median is anticipated to drop by 1.3%. The foreclosure rate is rising at a double rate annually all over the country.

The President of the National Community Reinvestment Coalition, John Taylor, representing the interests low-income people and minority groups, is skeptical of the outcome if the government fails to intervene.

The Mortgage Bankers Association however predicts that foreclosures among risky borrowers will amount to 0.25% of the country’s mortgages.

Democrat Senator Dodd is spearheading a movement to assist affected homeowners, with the help of big lenders – big names in the financial world like HSBC Holdings, Citigroup etc. They suggested modification of loan terms before hiking interest rates. Analyst Adeson, citing Dodd’s endeavours, warns that the housing market will suffer more if over enthusiastic banks arrange for loan workouts. He commented that lending money is not about being nice but it is all about business. He has cited the instance of Hedge Funds to prove his point.

Lawmakers are trying to work out a balancing trick between relief to borrowers and reining in of bad lending practices. Nobody wants to choke to death the sub-prime market. Senator Miller, a North Carolina Democrat has long been fighting predatory lending. He is confident of passing quickly a Bill in the House modeled after consumer protection laws in states like North Carolina and New Jersey, where reforms has not led to end of credit.

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Bankers are watching and waiting with uncertainty the snowballing effect of the sub-prime tsunami crisis.

Even though April provided a breather by a dip of 1% in foreclosure listing, it was still up by 62% compared to last year. Even then it will be far above the average of last year. Statistics pouring in show a worsening of the situation. No one knows the actual number of active sub-prime mortgages, its source of origin or refinancing procedures in Northeast Minnesota and Northwest Wisconsin.

Risky loans had triggered off this crisis. Some of the biggest sub-prime lenders like Ameriquest and New Century Financial are toppling down.

Some regions of the country have remained untouched by this virus – Wyoming, Vermont, North and South Dakota, Mississippi, Delaware and Washington D.C. Topping the list are 10 cities of which six are in California. These six ranks first among the group of notorious 10. Las Vegas comes first. Others claiming this dubious distinction are Nevada, Colorado, Connecticut, Florida, Arizona, Illinois, Michigan, Ohio and Georgia. As a result of this fall out Michigan, Minneapolis and Ohio are reeling under massive layoffs.

Big national financial services are practically non-existent in some important regions. Yet sub-prime activity has been typical with apprehended results. Real estate businesses having taken a U turn, lenders are tightening loan conditions thus putting marginal borrowers in a soup. Their rates of mortgage interest are rising while the value of their property continues to plummet.

The situation is so alarming that Lutheran Social Services have come forward to provide pre-bankruptcy counseling in Minnesota and Douglas County. The sub-prime lending has hit not only the borrowers but also local banks and communities. A ‘teaser’ rate tempts the borrower to fall into the net. Later the net closes in on the catch with disastrous consequences to all but the lender-agent nexus. Sub-prime lending essentially steals business from smaller entities.

Authorities have come forward and tightening the belt of the law – a grim reminder that playing around with lending will attract felony charges coupled with compensation and damages. However it applies only to current frauds and does not extend backwards. Thus primarily the focus is on prevention.

Wisconsin is the only state that has no limits on interest rates. Pay-day lending has been rampant which many regard as an unhealthy drain on the economy. The heat is on to find a solution and save the people.

Via

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This newly remodeled 3 bedroom 2 1/2 bath home is pristine. This home looks like a model home. It sits on 5 beautiful acres. It has vaulted ceilings throughout that make this 2500 sq ft home look even larger. This home has lots of windows to really show off the beautiful views. The master bedroom has an attached room which could be used for a nursery or an office w/seperate entrance leading to deck. The master bathroom features a jetted tub, with separate shower and a HUGE walk in closet. This is an open floor plan that is bright andcheerful. The large open kitchen has a center island which opens up to the great room with French doors leading out to the nice big partially covered deck. One of the decks is made of trek. There are 3 decks altogether. It has a huge laundry/utility room which opens out to the outside. The floors are laminate except for carpet in the family room andbedrooms. This property is mostly flat and very private and beautiful. It is the last property at the end of a dead in road. This would also make a great place for your horses. This is a very well kept home that is ready to move into. It has new paint and all updated. Appliances stay. It is within walking distance of the beach, trails for riding horses and the state park. This is very private but not too far off the main road. It’s only 23 minutes to the freeway or Mount Vernon and less than 50 minutes to Everett. And only about 60 miles to SeattleThe elementary school is just a couple of blocks away although busses are used to pick up children. We also have a free transit that runs into Stanwood. Camano Island is a drive on island so no ferry to worry about. It is a beautiful island on what they call the banana belt; which means we get more sunshine and less rain than most other parts of Washington. It is a wonderful place to live and raise a family or retire. It is a very close knit community with many artists and several galleries on the island. This is a great price for only $329,950. Pleasee-mail for more information.

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You won’t find a view like this at such an amazing price! This home is located on a corner lot directly across the street from the park and public boat launch and just a short walk to schools and downtown. From the front deck you can enjoy the view of the city and the lake as it passes under the bridge and to the dam. New kitchen, hardwood floors, and exterior doors are only a year old. Other recent updates include a metal roof, vinyl windows and new bathroom. This home also comes with a free Home Owners Warranty for added protection. Call owners today at 509-670-9048 to schedule a private viewing of this home.

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A growing number of retirement communities, many developed by nonprofit organizations, are coming to city neighborhoods.

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