Foreclosure Recap – Week #20
According to the Monitor Bank Rates Website, when home sales were increasing by double digits and practically anyone could get a mortgage without trouble. There was literally a shortage of foreclosure properties from which to choose. Today that is no longer the case, especially in California, Florida and Texas where there is a large amount of property to choose from. There are many properties out there at bargain prices if you know where to look and what to look for. There are many different ways from which to get property and this article will show some ways and the shortfalls and strengths of each.
In the Columbus Dispatch we found a story about how a county there helped 78 homeowners avoid foreclosure and stay in the homes that they owned. The homeowners and the bankers came together face to face to work out deals to stem the foreclosures and make it possible for the families to remain in their homes. Interest rates have been cut for these people and the terms or length of the loans have been stretched out in many cases to make the payments lower so that they can be made more easily and this seems to have made a large impact on theses people.
The New York Times brings us the story of a Connecticut family that fell behind on their mortgage without even knowing it. This happened because the amount of the mortgage, $2,500 per month, was automatically adjusted from their credit union. But when the rate of the mortgage got re-adjusted from 8.3 percent to 12.5 percent, they were not aware of the increase of $1,000 more per month. The automatic withdrawal payments from the credit union did not increase so each month they fell $1,000 farther in arrears on the mortgage to the point that they were almost not able to stay out of foreclosure. These people, like many others have stated that if they didn’t have children, they would most likely just walk away from the loan.
In Ann Arbor, Michigan homeowners are struggling with upside down, or underwater mortgages. This means that they owe much more on the house they are buying than it is worth and as a result they are in a severe negative equity situation. What makes this so bad is that even if these people are able to make the current mortgage payments, they can’t refinance at lower rates because the house will not appraise with enough equity to allow a lender to give them a new mortgage. So even though they are doing everything right, they are getting the bad end of the deal because most places available now are for people that are unable to make the mortgage payments and those that are keeping up are getting, in a way, chastised for it.
Here is another touching story from the Columbus Dispatch this week. Folks that own mobile homes are feeling the pinch of the mortgage foreclosure crunch in an unusual way. Even if they own the mobile home outright and are keeping up the lot payments, if the mobile home park has problems and goes into foreclosure, the people that live there have to find a new place to move the mobile homes to. This can be a considerable expense that is not their doing. The Ohio legislature has passed a bill telling the people that own the land that they need to notify the tenants within 60 days and then the mobile home owner has an additional 30 days to vacate. Considering that most of these people are on substandard incomes and the cost of moving, it is going to be a hardship that few can sustain.
While this is not directly foreclosure related it is worthy of including here. Since the government has been unable to stop the job loss and the foreclosure numbers, they are giving some hope and reason for optimism to the voting public by banning arbitrary rate hikes and the excessive fees being charged by credit card companies. This may help to stem the fear that these already cash-strapped families are suffering from and allow them more breathing room in the budget thereby making it easier to handle the mortgage. One of the key parts is that a customer would have to be over 60 days behind in the payment to be able to get a rate increase.
This story is one of someone buying properties, which she was going to use as retirement income. She turned three of them into section 8 housing, which the government subsidies. The problem is that under the law when someone in one of these low rent properties complains and an inspection is made, the landlord has to fix the problem. This more often than not cost here money every month instead of making her income. It got so bad that she finally decide to let the three properties go into foreclosure. This meant that she was free of the burden but it also meant that three families were put out and had to find another place to live.
When considering a repayment plan or a mortgage modification plan. Which is the best option for a homeowner in mortgage distress? This question is addressed in detail in this article. The repayment plan almost is never the best option because in addition the regular mortgage, the already troubled homeowner has to pay an additional sum to cover back payments. The modification plan however is just as the name says; it modifies the existing terms to something both parties can benefit from.
From NBC local affiliate News 2 In North Carolina we get the story of an FTC website that is there to help homeowners sift through the many scams that have come into existence since the mortgage crunch. These scams are set up to help trick an already desperate homeowner out of money. The federal government has started to address the issues and this website that they set up helps to address these concerns and give people information that might help keep them from becoming a victim.
The Huntington News story tells that quotes Jay Rockefeller in saying that “I applaud President Obama for signing both the Helping Families Save Their Homes Act and the Fraud Enforcement and Recovery Act into law.” The article states that he feels that there are many issues that have to be addressed from credit card companies to mortgage companies and that this will go a long way towards putting the and that this is a great start put people first and to helping the American people come to terms with this crisis.
Related Posts
June 20th, 2009 at 1:20 am
Interesting Article. Thanks for the read!