Learning Center » Foreclosures

Hispanic Middle Class Decimated by Foreclosures

Julie Parker — Mon, 21 May 2012 09:00:46 +0000

The Hispanic middle class has been decimated by foreclosures. There hardly has been any study of the impact of this crisis on groups. Foreclosures understand neither race nor ethnicity. It has spread its tentacles irrespective of gender, age or class but the effect has varied from one group to another.

As per the findings of National Council of La Raza (NCLR) the Latinos has been badly impacted. Over 17% have either lost their homes or will do so. The news is alarming. The middle class among the Hispanics have invested a disproportionate amount of their wealth in house ownership.

The problem is not only housing. The Latinos have lost their equity – something they needed for their future. Consequently their retirement for tomorrow and education for today has been affected. One million has been affected – the middle class is on the way to being wiped out.

The situation has become further complicated with unemployment. It has made it impossible for them to modify loans. Those without work are facing a long term bleak future. The NCLR has suggested that the Latinos be permitted a longer grace period than others – extending beyond the typical three months.

Faced with triple attacks from foreclosures, loss of equity and unemployment the family relationship within the group is under great strain. The children are finding it difficult to continue with regular schooling.

The NCLR suggests that housing advocates help those who have been denied loan modification wrongly. The banks should resort to foreclosure as a last recourse. The judges dealing with bankruptcy should try to reduce the principal on the loans taken on primary residences. If foreclosure has been done then the families should be allowed to rent it back with the hope that they can own it once again in future.

Among the Latinos and Afro-Americans 17% and 11% respectively are in foreclosure related trouble as per the findings sketched out in “Foreclosures by Race and Ethnicity”. These steps spell relief to those facing foreclosure threats anywhere but for the Hispanics these are vital as they have been worst hit.

Photo by Master Isolated Images.

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Foreclosures Causing Damage to the Health and Grades of Children

Julie Parker — Mon, 14 May 2012 09:00:31 +0000

Foreclosures are causing damage to the health and grades of children. Nearly 80,000 kids in Ohio have seen their houses swallowed up by foreclosure while innumerable others are facing this risk as per a recent study. Foreclosures cause the family stress levels to increase. It results in households moving to poorer localities having higher crime rates and weak neighbourhood bonds as per the findings of First Focus of Washington D.C.

The affected children do not perform well in school and begin to slide back; health issues too are connected with foreclosures. Bruce Lesley of First Focus (president) said, “It is a huge, traumatic issue for families. The implications for kids’ long-term well-being are really poor”.

In Ohio nearly 98,000 children are at risk of being thrown out of their homes as the mortgage dues are over 60 days pending as per this recent report. Across America millions of children have been evicted with their families and millions more are facing the same fate. They double with relations and friends but this leaves an emotional and psychological scar that tells on family bonds.

Senior research fellow at Urban Institute Julia Isaacs said, “The financial pressure on parents tends to affect interactions with each other and with their children, and a less supportive parenting style caused by stress can have negative consequences on children’s behaviour and their overall development”. She has authored this report.

The children suffer from changing schools and such move causes them to fall behind by as much as a month. The families postpone medical visits and avoid buying essential medicines.

The foreclosure is not a single isolated event. It takes sometimes 600 days to run its course said assistant professor Cyleste Collins of Center on Urban Poverty and Community Development (Case Western Reserve University in Cleveland). She explained that many of the households hang on in a kind of limbo state for prolonged number of months. It is agonizing to live with the sword of Damocles hanging over one’s head.

The families try their best to keep the families in the same schools while clinging on to their homes at least till the school year comes to an end. But the task is challenging to shield the kids from the harsh reality of survival.

First Focus suggests that the government policies should be shaped bearing in mind the plight of the children. Loans should be modified and more projects should be launched so that the households are easily able to avail of affordable homes.

Photo by Renjith Krishnan.

Bankruptcy and Foreclosure Threat

Julie Parker — Mon, 07 May 2012 09:00:03 +0000

William Quintana, a plumber, attempting to avail of a scheme of the federal government to modify his mortgage loan never thought that this move would cause him to end up in bankruptcy and poised to lose his home to foreclosure.

Quintana and his wife, residents of Antioch submitted an application to modify their housing loan through HAMP. He had surmised that the process would be straight. He urgently needed the lowering of the mortgage since he became disabled following an accident while working. But the application led to an unexplained maze of payments lost, repeated pressure for unjustified late fees and inordinate delay in processing the application.

PNC Mortgage did acknowledge in their letters sent to Quintana that the letter was eligible for modification of loan but even then to save his house from being sold at a foreclosure auction he sought bankruptcy protection.

A “No Solicitors” notice was hung before the door to discourage realtors and potential buyers. Quintana said, “They say owning a home is the American dream, but it’s become the American nightmare. I’m not a failure or a loser. I’m a complete victim”.

Many housing advocates have shown interest in this case together with Rep. John Garamendi (Democrat/Walnut Grove). Garamendi said that this is indicative of the general malaise in the mortgage world and with HAMP. Although about 950,000 have sought assistance through this programme, critics contend that it is failing to help the victims substantially.

Cinna Green of Center for Responsible Lending said, “The banking industry had a machine that could crank out these bad loans, but it doesn’t have anything that can fix them”.

Dennis Wilhite-Thomas of REACH based in San Ramon said this case is nothing new – one among innumerable ones that she handles where the homeowners are hapless victims facing bullying banks. Quintana is a simple person who knows how to labour with his two hands but this is beyond his understanding. How to handle it? They neither enjoy costly holidays nor foray into expensive improvements on their ordinary home.

Initially Quintana failed to qualify for the modification even after being disabled because he had not lagged behind in his monthly payments. On the advice of National City Mortgage, his lender he decided to skip payments for two months. This trick made the road clear for the bank to foreclose while duping him with expectations of modifications.

Photo by Jscreationzs.

Foreclosure Numbers Lowest Since Last Four Years

Julie Parker — Mon, 30 Apr 2012 09:00:20 +0000

Foreclosure numbers are at the lowest since the last four years – since 2007 July. News to celebrate? Not necessarily. It is 4% drop from last March and 17% drop from March 2011. A detailed look will show that the real estate market is complicated. It indicates that things will become worse before any long term betterment really takes place.

Including in the foreclosure group are default notices, scheduled auctions and bank repossessions. Foreclosure ‘starts’ numbers have gone down but the number of auctions have increased for three running months. There has been a 7% increase in March from last February.

In generally the market seems too rosy to be real. The house owners are continuing to lag behind on their housing loans at a fast pace although the banks have slowed down on their repossession operations. There are apprehensions that this is just the lull in the storm – that will soon break out in full fury.

Why is it so? The banks are now more conservative while Washington and many of attorneys general of states are crying foul over foreclosure abuses.

But now that the settlement for $25 billion has been reached it seems that the foreclosure mills will start churning again. It will lead to more evictions and bank takeovers. Brandon Moore of Realty Trac (CEO) said, “The dam may not burst in the next 30 to 45 days but it will eventually burst, and everyone downstream should be prepared for that to happen – both in terms of new foreclosure activity and new short sale activity”.

The worst hit markets will bear the first thrust later in 2012. In Nevada the foreclosure start-ups spiked by 153%; in California default numbers went up by 14% in March from the previous month and in Florida the foreclosure filing ratio is 1:123.

The point to note is that property is always something local. Florida is most vulnerable but in Miami the prices went up by 1.2% from the last month. It could be because of an increase in vacation homes – it went up by 7% in 2011 as per National Association of Realtors.

According to Trulia prices have been going up in many places in Florida apart from Miami – West Palm Beach as well as Cape Coral – Fort Meyers region.

The scenario in California is different. The sale prices for houses are dropping across the state. In Sacramento and Fresno the drop is by 8.3% and 6.8% respectively while in Los Angeles and San Francisco the drop is by 5.4% and 2.9% respectively.

Photo by Cooldesign.

Federal Reserve Charges for Former Unit of Morgan Stanley for Foreclosure Violations

Julie Parker — Mon, 23 Apr 2012 09:00:00 +0000

A former unite of Morgan Stanley has been ordered by Federal Reserve to review foreclosures numbering thousands that it had operated; it has been threatened with fines.

The unit, Saxon Mortgage Services was sold this current year. The order mandates Morgan Stanley to engage a review by a third party of foreclosures that had been handled by Saxon Mortgage Services from 2009 to 2010.

The regulators have asked other mortgage servicers to revamp their operations and compensate those who have been harmed. In October Morgan Stanley arranged to sell to Ocwen Financial Corp. its unit of Saxon bringing down shutters on its operations in servicing sub-prime mortgages. The deal was finalized recently on 2nd April.

Saxon collected payments from over 225,000 residential loans – it ranked 34th among the mega loan servicers. During the two years it has dealt with over 60,000 foreclosures. Morgan Stanley did not make any comments on this.

According to the Federal Reserve the employees of Saxon submitted innumerable foreclosure papers sans any personal verification of the contents; the documents were not notarized properly and enough efforts were not made to respond positively to the requests of homeowners to resolve foreclosure problems.

The Federal Reserve stated that the review by Morgan Stanley is aiming to “provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures or other deficiencies identified in a review of the foreclosure process”. However Morgan Stanley has stated that it is willing to pay for any penalties relating to violation of civil laws by its Saxon unit. The Feds has not said how much that penalty will amount to.

A similar agreement had been reached by the Federal Reserve with Goldman Sachs Group. The latter had sold one of its units, Litton Loan Servicing to Ocwen.

In April last year the Federal Reserve together with Comptroller of the Currency had mandated fourteen companies dealing with mortgage-servicing to engage consultants for reviewing foreclosures; they were also asked to revamp their foreclosure processing methods. The homeowners who were wronged could be getting compensation after completion of the reviewing.

Since the time of the surfacing of the robo-signing scandal the firms dealing with mortgage servicing have come under the scrutiny of the state and federal governments. Earlier in February an agreement was reached with five mega banks to the tune of $25 billion for their foreclosure abuses.

Photo by Renjith Krishnan.

Bill Aiming to Help Foreclosure Victims in Maine

Julie Parker — Mon, 16 Apr 2012 09:00:19 +0000

This is the first term for Bobbie Beavers, State Rep of Maine (House District 148 – inclusive of Eliot Town and a portion of South Berwick). She is serving on the Legislature’s Committee of Energy, Utilities and Technology Committee.

Beavers claims to have gathered experience through the shepherding of a bill that aims to protect the residents of Maine from foreclosures. She has noted that during the processing and enactment of deserving consumer bills that are widely supported it can be pushed to the sidetracks by the lending lobbies from the national level.

She reiterated that the legislators of Maine should bear in mind that their first and the foremost priority are the people of the state who vote them to power.

Recently the Senate passed LD145 and it is now waiting for the signature of the governor to be enforceable law.

The bill will place hurdles before the mega mortgage firms in their endeavours to foreclose on residences if they lack the legal standing to do so. The bill mandates that the banks would have to submit the original note before foreclosure proceedings start; failing it, the case would be dismissed.

According to current civil law of Maine the plaintiff foreclosing has to certify when the case starts regarding ownership proof and produce the necessary papers; but at the time when the courts were overwhelmed by tidal wave of foreclosures the plaintiffs had ignored this important step that led to the abuse of the process; they even flatly refused to submit required note.

It resulted in the homeowner wasting time and money in trying to find out who is legally holding the mortgage. The bill mandates that the mortgage note would have to be produced within a certain time or the house owner would have the right to have the case dismissed.

This type of trickery in foreclosure cases has been rampant across the country and has resulted in the unlawful seizure of property – nothing short of outright theft. This in turn has led to mushrooming of sham firms preying on the downtrodden homeowners pretending to offer help but in reality pushing them further downhill and robbing them of whatever little they have left in their pockets.

Fortunately in Maine there are credit unions, mortgage firms and community banks who are decidedly more consumer friendly than their national counterparts as they observe the letter and the spirit of the law.

Photo by Homesbythomas.

In Cook County About 1,900 Foreclosure Victims are Due Dollars

Julie Parker — Tue, 10 Apr 2012 09:00:02 +0000

In Cook County about 1,900 foreclosure victims are due dollars. There is $16 million kept in limbo with the clerk of the count. If disbursed it would be of great help to some – badly affected by the crisis.

These dollars are extra money created after the house owners suffered foreclosure and the house was sold off. If the sale amount is more than the due amount then the money rightly should go back to the previous owner. Dorothy Brown, the county clerk said, “We have an individual that’s due 13 cents. We have someone that’s due $400.00.”

As per the laws of Illinois this surplus amount has to be kept deposited with the court clerk where it goes into hibernation with interest piling up till the rightful owner puts in a claim.

But the problem is tracing and finding these people. Many do not know or have any inkling that money is due to them; a good number having passed through the jaws of foreclosure have never thought any purpose in leaving behind a forwarding address.

Brown said, “It’s hard to find them because many times when people lose their properties to mortgage foreclosure they have also have a lot of credit card debt and a lot other kinds of debts, and they’re probably actually running from those creditors. As a result when they leave their property, they don’t leave a forwarding address”.

To address the problem and reduce the long name list as well as the bag of money the office of Brown has set up a website with a search section to help trace the owners of the fund. Those who want to know if anything is due to them can click on to www.CookCountyClerkofCourt.org and then fill in the necessary details – first initial, last name and their phone numbers. Brown took this step thinking that something should be done for these people.

For those who are currently going through the foreclosure trauma the clerk has sent out a message telling them to keep in touch with the related office. The office of the clerk can chip in to oversee the sale of the property and alert the previous owner if any extra money is due to them.

Photo by Ddpavumba

What has the Anti-Foreclosure Occupy Movement Achieved?

Julie Parker — Mon, 26 Mar 2012 09:00:40 +0000

Photo by JacobRuff

It is now six months since the Occupy movement kicked off from New York and spread across the county. What has this anti-foreclosure movement achievement achieved? Through winter the protesters hibernated and kept a low profile. They are now starting to make noises and renew action.

The wave of protests that started from 17th September 2011 initially was not confined to America alone but took on global tones targeting excesses in the corporate sector and increases in economic inequality. They set up their camp in Zuccotti Park in Manhattan. But it seems that the movement has lost its punch with the loss of media attention; donations too dropped as their encampments were forcefully dismantled by the authorities.

It has been reported on 7th March that only about $119,000 remains in the bank account of Occupy – sufficient to meet bare expenses for two weeks.

The movement has been able to set the tone of the national discussion regarding economic inequality. “Occupy” has taken on a new connotation. President Obama in his State of the Union address (third) echoed the mood of the Occupy movement when he gave out a popular call for ending income inequality.

Has any real change come about? Some have been immediate while others are a blueprint for the future.

The Governor of New York State Andrew Cuomo (Democrat) came to be dubbed “Gov. 1%” for refusing to give the nod to a tax for millionaires because this group made the bulk of contributions to his campaign. Cuomo took the initiative in evicting the protestors from the park that was jointly owned by New York City and New York State.

But Mayor Gerald Jennings (Democrat) permitted Occupy Albany to stay on the side of the park that was owned by the city. David Soares, the local district attorney, a Democrat announce that he would refrain from prosecuting anyone for charges of misbehavior and arrested by the police of the state; the latter are answerable to Cuomo.

Last December surprisingly Cuomo changed his stand on tax for millionaires to avoid more clippings in expenses for health care and schools.

From the revenue of $2 billion generated from this move tax cuts were made for middle class families ranging from $200 to $400. Many among the Democrats are of the opinion that Cuomo somersaulted as he was the continuous uncomfortable target of the protestors for many months; they had even started being vociferous outside his office.

Llamas and Their Adopted Mother Facing Foreclosure

Julie Parker — Tue, 20 Mar 2012 09:00:22 +0000

Photo by Digitalart

The bond between Cheryl Rosimos, a resident of Oakdale, and her pet llamas is so strong that she made them her bridesmaids at her outdoor wedding. Today, she is desperately trying to keep herself and her brood under one roof.

The llamas play catch-me-if-you-can with Rosimos in the fenced-in backyard behind her 1,500 square feet house on East Lake Road, where she also lives with her husband Gary Koczera. She has plans to use these animals for pet therapy in nursing homes and other similar facilities in the local area. She has found the llamas to be quite intelligent and curious about everything.

But Rosimos is afraid that her all-male brood of six llamas could soon be split up if foreclosure becomes a reality. She can no longer afford her monthly mortgage of $2,200 for her ranch-style house. All she wants right now is not to have to separate the brood of llamas; they have been together since birth.

For three years, Rosimos has been sporadically employed; she recently found a steady job working in a legal office. She is now trying to negotiate with Chase about restructuring her mortgage. She has been having trouble with her payments since 2008. Till now, her efforts have not met with success.

She has also sought help from a firm that helps in mortgage modification and tried to apply for aid from HAMP scheme but, so far, relief has remained a distant dream. She previously sent a letter to Obama, contacted the offices of Rep. Joe Courtney and Senator Richard Blumenthal, talked with the Office of Consumer Counsel of the state; all of whom did not respond.

Ten times Chase has told her that they had lost her papers; Chase did not respond to queries wanting to know the bank’s version of the story. After Chase told her this, Rosimos bemoaned the fact that she was extremely nervous and wanted someone to help her get an affordable mortgage.

At one stage, it seemed that the modification had been approved and there was a hope that the monthly payment would go down to $1,500 per month. But later she was notified by the bank, sans any explanation, that the modification would increase her monthly payment to $2,400 – it being $500 more than what she was charged hitherto. It nearly gave her a heart attack.

Desperate she made the mistake of inking a contract that was not of much significant relief.

Black Church Facing Foreclosure as Bank is Accused of ‘Cardinal Sin’

Julie Parker — Fri, 16 Mar 2012 09:00:32 +0000

Photo by Ddpavumba

The African Methodist Episcopal Church is threatened with foreclosure initiated by the One United bank of Hub. This church is one of the oldest in Boston and was greatly venerated while the bank, owned by a man named Black, is shrouded in scandal. The bank tucked in millions from the bailout funds given to them by the federal government. The AME Church was founded way back in 1818 and had played a key part in various anti-slavery movements.
The church is threatened with a foreclosure auction that is to be held on March 22nd in order to realize loans that are due adding up to $1.1
The lawyer representing the church, Ross Martin, said he was at a loss as to why a bank should foreclose upon a church. It did not make any sense to him. Martin added that the church had not missed out on a single payment during the last five years since the start of the mortgage.
However, the bank did not respond to calls asking for comments. Martin opined that the threat was a ploy for holding talks since the there was a long standing dispute between the church and the bank.
The Charles Street AME Church contracted a loan of $3.6 million in 2006 for the purpose of building next to it a community center. After three years, the bank stopped providing funds and began initiating legal proceedings to get back its money.
It became impossible for the church to refinance a mortgage that involved the church building and some storefronts nearby. Martin informed that the church was agreeable to continue making payments on its current loan till refinancing was available but One United refused to accept the offered deal.
Martin said that, despite the impasse there are “various legal options” the church could use in order to avoid foreclosure. He said, “Our view is that they’re not going to be able to kick us out”.
The pastor of the church Reverend Gregory Groover Sr. is the chairperson of Boston School Committee. He did not make any comments. But other leaders among the African Americans in Boston are fuming. Reverend Jeffrey Brown of the Ten Point Coalition (activist group) said, “I think it’s absolutely outrageous for a bank – especially a bank that’s supposed to be a minority bank – to move on an institution like the Charles Street. If there’s anything that’s a cardinal sin, this would be it”.