Freddie Mac has over 1.5 million homes for sale at any one time. These are obtained as a result of the previous buyers defaulting in the loans.

In April last year, they were planning to sell of 300 homes in Southern California and Las Vegas. The quick sale would allow buyers to receive an $8000 tax credit for first time buyers.
Freddie Mac still wants to prevent foreclosure and in a time when the housing market is far from stable, they have been able to keep over 132,000 American families who are struggling financially to either be able to stay in their homes, or sell them on rather than lose them. When the foreclosures are sold, they are sold at very low prices, so anything that can be done to stop that is to be welcomed.

Once a home has been lost, however, Freddie Macs need to sell it to the next buyer as soon as possible. In 2009, they gave a deal that would have made it much easier to buy a house. As well as agreeing to cover the closing costs, they also gave a free two year home warranty to cover all major appliances and also the possibility of buying new ones with a 30% discount.

3.5% of the cost of the house will be covered as a result of Freddie Mc paying the closing costs.In 2010, it does appear that things are beginning to improve, as the amount of bad loans began to decrease. While this is good for many people, builders are being affected as people are choosing to buy a foreclosed home rather than have major renovations on their own or even go for a new build.The number of available properties might decrease if people realized the cost involved in a bank foreclosing on a loan. While some lenders will put the figure at between 20 and 25% of the loan, Freddie Macs put a figure of $60,000 on it. They also consider that 68% of low income owners could be spared the problem if they admitted that they had a problem at an early stage. For owners who did this in 2009, Freddie Mac foreclosures arranged loan modifications, Home Affordable Modification Program and this helped some 42% of the 16,000 properties. Figures improved in the last part of the year, but they were still at 29%.Only time will tell if the HAMP program works.

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There are many passionately nursing the hope that property value will recover in California with the magic touch of a miracle. Late night information broadcast over the television is adding to this belief matched by willful thinking. But instead of calculating the macro trends of the economy the limited local data is used that fails to give the total picture of the trends that are emerging.

In reality the inventory of foreclosed houses in California is increasing and prices are tumbling. The pipeline is still full of problematic loans. These are harsh persisting facts. In the backstage behind the wings a huge shadow inventory is waiting and artificial blockades placed by the interventions of the government is beginning to crack.

Beverly Hills has gone underwater calculating to a staggering $2.2 million. In many of the pricey areas the people have bought with full cash payment. It is nothing to be startled about – a rich person may buy a house worth million dollars with cash. This is common in a place like Beverly Hills. This is not the mid-tier section like Culver City or say Pasadena. But even the housing market dealing with luxury houses is getting a battering.

This raises the issue of the health of the total housing sector. These luxury houses are deep underwater. It may not show up immediately on the listings of mega names like JP Morgan Chase, Washington Mutual, Bank of New York as well as Wells Fargo. Their balance sheet is tottering. Right now the tactics is to pretend that these have not gone underwater.

Life seems to go on normally in these rich zones with few foreclosures with the driveways dotted with foreign cars. But the figures talk. The zone is underwater by over $1 million. No payment has come for over a year from a place that had and has an excellent view of Hollywood. It does not bode well for California.

A beauty in Santa Monica with 3 bed rooms and 2 baths covering 1,200 square feet constructed in 1953 is in foreclosure. It has been listed for $636,000. Since it is where it is – Santa Monica, many will think the price is right. But on scrutiny it will be seen that after being listed for $722,900 in last April it has gone down rapidly by $1 million to touch $636,900 on 23rd June 2010! But even with this massive discount it is still hanging around for buyers.

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Legal firms under the lead of United Law Group joined hands in firm handshakes with 30 other prominent legal companies to from Crisis Commission on Homeowner Representation.

United Law Group is one of the leading law firms with branches across the country – Arizona, California, Florida, Nevada, New York and Ohio. It has licensed attorneys to operate in any state. The group has won a name for itself in its dedication to use the legal tool to prevent foreclosures.

The primary objective of the group is to modify the language used in SB94. If it is not done then it will prevent troubled borrowers at risk of losing their homes from taking legal help. It would prevent lawyers from offering their services to bring about modification of loans and prevent foreclosures. As the bill now stands it will stop lawyers from taking a retainer upfront fees for services. This will be detrimental to borrowers.
Martin Andelman explained, “Essentially, it is a bill that will block a homeowner from obtaining legal representation when they are at risk of losing their home to foreclosure.” Robert Scurrah of CDA Law Center said, “SB94 is fundamentally defective. The concept of protecting a consumer will be totally eroded by the elimination of representation by licensed attorneys.”

The stand of the commission is that the fees that are being now charged by lawyers are negligible considering the time as well as effort put in. It requires expert knowledge to support the cause for modification of loan. For any other project the consumers in Orange County would have to dish out minimum $300 per hour to lawyers. Lawyers are engaged by real estate firms are paid anything from $1,500 to $3,000.

Zshonette Reed of Lorden & Reed said, “In a contingency case it’s worth the risk, because there’s a fee waiting for you at the other side. But attorneys cannot afford the overhead commitment for a $2,000-$3,000 fee.”

Summing up the impact that this bill will have on troubled house owners Robert Buscho of United Law Group said, “The consequence of this bill is that homeowners are not able to get representation because the attorneys cannot afford to become unsecured creditors to people who are already struggling financially.”
The supporters of the bill contend that it will prevent increasing number of foreclosure prevention scams that are mushrooming across the country. But Buscho claims that SB94 would harm the homeowners and not the scammers. He said, “Enforcing current laws will take care of the scammers. Enforcing current laws will take care of the scammers.”

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Jobs in the banking sector have gone down by 22% in Georgia since 2007. The turbulent banking segment has been contracted by nearly one fourth since the crisis started two years previously.

Full time employee numbers in the banks based at Georgia have dropped by 22%. It has dropped to 49,000 on 30th June this year from 63,000 in June 2007. These were the figures released by Federal Deposit Insurance Corporations that deals with data and analysis. The losses of jobs are exclusive of those operating in Georgia but having their bases outside the state.
The problem here is more about downsizing than outright failure of banks according those inside the banking industry as well as outside experts. The number of bank failures has been the highest in Georgia. There have been 23 collapses since 2008 August. Most of these banks have been modest community ones with only a few branches.

John Poelker of Georgian Bank commented, “It’s not failed banks, it’s the whole industry trying to rationalize their cost structures.”

The increasing cost of credit and losses from loans and foreclosures are stumbling even the successful banks. There is a lot of all round pressure. Chris Marinac of FIG Partners LLC said, “Your better banks are managing through it, but it isn’t easy.”

The numbers are in tune with the trend across the country. Everywhere the banks are shedding staff so as to be more cost efficient. They are gearing up for further losses in the future according to banking experts.

The banking segment as a whole in USA has lost 128,000 jobs since the second quarter of 2007. It is a drop of 5.7% as per the data given by FDIC. Of these 11% are from banks in Georgia. In Michigan bank employment has dropped by 37% and in California by 29%.

David Oliver of Georgia Bankers Association commented that this fall in banking jobs in Georgia was most unfortunate but it was no surprise considering the storm that has been lashing the banking industry.

Most of the banks in Georgia have cut the surplus staff working in support positions. Those who leave by themselves have not been replaced. The frontline workers have been retained and cuts have been avoided in this group so as to maintain efficiency in banking operations. But those who are seeing a rush of work connected with mortgage modifications etc have hired new hands. Low interest rates have also shored up demand for new mortgages.

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The situation is indeed a tricky one. As the American economy goes through one of its deepest recessions and unemployment rises, foreclosures have become very common. Now the question that arises is will a resident default on his mortgage payment if he had the option of making the monthly payment?

According to research conducted by the Booth School of Business and Kellogg School of Management, the answer to this is not very easy. The research has underlined that 26 per cent of the loan defaults are very strategic decisions – an attempt by homeowners to escape payment as their home values plunge below than what they owe to their banks.

According to Zillow.com, 22 per cent of homeowners are underwater. This means their mortgage amounts are more than their home values are worth. In certain areas of Nevada and California, more than 50 per cent of homes have negative equity. In certain areas, the deficit is mind-boggling. For instance, in the Salina, Calif area, the median equity of homes that were bought during the boom, has now become a negative $214,305, the study revealed.

Co-authors Paola Sapienza, Luigi Zingales and Luigi Guiso took interviews of 2000 residents to substantiate the view that although morality has had a constraining effect, yet negative equity is leading many to default on loans deliberately. The researchers also studied the effect of federal policies on foreclosures that touched a record high of 3.1 million.
Perhaps what touches the heart strings is that although 81 per cent homeowners feel that it is morally wrong to deliberately default, yet the a high percentage of owners crumble when the amount of negative equity grows wider. For instance, seven per cent of those who said it is immoral to deliberately default on mortgage payments, are prepared to walk out once the negative equity climbed to $50,000. At $100,000, 22 per cent said they would walk out of their homes. Once the negative equity climbed to $200,000, thirty seven per cent said they would have no qualms about defaulting while 38 per cent said they would default once the figure touched $300,000.
Of course, those who did not have the moral values the percentage rate was much higher. Twenty per cent of this group said they would default once the negative equity touched $50,000 while 41 percent said they would default once the negative equity became $100,000. It’s time the administration looked into this.

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Across USA legal action is being initiated against consultants falsely cheating those seeking help to avoid foreclosures. So far 189 suits have been filed. The Federal Trade Commission’s chairperson Jon Leibowitz and the Attorney General of California Edmund G. Brown announced that these steps were part of a national move against false consultants covering 18 states. Utah is not one of the states.

The announcement served the purpose of sending out a warning to the con artists as well as a word of caution to home owners to be wary of the breed. These fraudsters approach their victims with hollow promises to line their own pockets without delivering goods.

FTC filed legal suits against Lucas Law Center of Aliso, for taking as fees $3,995 while telling them not to pay their mortgage dues. Suits were also filed against US Foreclosure Relief Corp of Orange, Loss Mitigation Services of Santa Ana and Appoy2Save of Idaho.

The legal suits were filed in the counties of Orange and Los Angeles roping in the five companies, their branches and members of their staff. Brown said, “We are going to do everything we can to stop it, realizing that there are more rats to come out of their holes than we can stomp on. But we will keep doing the best we can because it is horrible to take advantage of somebody who is vulnerable with their family exposed to foreclosure.”

The CEO of Loss Mitigation Services, Dean Schafer had his sympathies for the steps being taken by FTC to sift out the black sheep but failed to understand why his firm had been especially marked out. He had no comments to make about the suit and was still going through the allegations.

The suit seeks millions in penalties, compensation to the victims and a permanent stay order to keep the companies out of the mortgage advising and consultancy business. One of the accused, US Homeowners Assistance of Irvine has been charged for collecting fees amounting to $3,500 for each of the victims faced with foreclosure. One of the victims alleged that her signature had been copied and false information given in the documents that had been submitted to her lender.

The FTC is combing through rules that will put a ban on mortgage help services from accepting upfront fees. He is hopeful to have the regulations in effect before the end of this current year.

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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.

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There are many living in foreclosed houses but when the mother of Octuplets is doing so, it draws attention. Nadya Suleman is being referred to as Octomom when she gave birth to eight babies simultaneously. She is a 33-year-old mother supporting her six other children on food stamps, educational loans and disability handouts. She is living in a three bed roomed house in the mother of Suleman, Angela in Whittier. The house has been foreclosed upon because of past payments not made amounting to $20,000. The media focus might help her raise cash and get out of the foreclosure zone. The cameras and reporters are watching every move she makes.

Nadya’s father Ed Doud has bought a property in La Habra for $564,000. The deal has been finalized and closed according to Mike Patel of Prudential California Realty. When the famous Octomom appeared on the Dr. Phil show there was a flood of interest that translated into free repairs and improvements to her new house.

The foundation of Dr. Phil collects money for a trust for the babies – Angels in Waiting. This charity concentrates on adopted children that need special medical attention. This group has offered therapeutic and medical care so long as the donations keep coming in.

In a RadarOnline video talk, Suleman said that she had accepted many of these offers to finance her new home and to see to the expenses of her children. She is now a blogger and appears regularly and exclusively for RadarOnline. There are talks that she will sell a video of the birth of the Octuplets for over $1 million according to grapevine.

Over the video she said, “Any little opportunity there is, I take that opportunity to earn those resources for the kids.” The birth had been taped to keep as family memories.

There are many signs that Suleman now has cash to spend. She has been spotted manicuring her nails, purchasing makeup and other personal items of luxury and hygiene. She has been seen going to the best baby shops to buy necessities for the little one. However she has denied having interest in realty shows at the moment. She might consider it after the children grow older.

Despite the windfall thanks to the Octuplets, Suleman would still have to meet her tax commitments. The amount that she has made since the birth of the babies is difficult to calculate.

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Some pundits are optimistic and opine that USA will recover from the foreclosure crisis. The doomsayers of California are now singing another tune after surveying the Inland Empire. The bold message is that the country is going to survive this debacle in the near future.

The forecast by Chris Thornberg is not unrealistically coloured – it has its dose of grimness. He has introduced in it a mixture of hard logic with the intellectual analysis of realtors, appraisers and business personnel who are trying to make the best of the economic climate and get on top of it.

Thornberg owns Beacon Economics based in San Rafael. He was speaking at luncheon meet of Real Estate Research Council of Southern California. The group meticulously tracks the ups and downs of real estate prices, sales, delinquencies, defaults and also foreclosures. Thornberg is also the economic adviser to John Chiang, the Controller of the state.

According to him America will get back “on the path” to financial recovery by the middle of the next year – 2010. Thornberg said, “It’s amazing the same group of people who denied there was a recession are now screaming `depression. Hyperbole vastly outweighs what’s realistically going on. Everyone is saying things like, `This is a total meltdown.’ Again, it’s all about perspective.”

Thornberg considers Wall Street to be “13-year-old daughter of the U.S. economy – the drama queen.” His advise is not to look at the daily swings of mood of Dow Jones but give it a look over once a month – that is if one is not a day trader. He explained, “All this crap about the credit markets ceasing to operate – it’s not true. There is still credit flowing out there.” In fact, credit isn’t flowing to companies who shouldn’t have received credit lines in the first place. “Wake up – it’s not 2006 anymore.”

According to him the plunging of real estate prices will act as a good dose of medicine for the sickness. He added, “As prices continue to fall, it’s getting easier for low-income families to buy homes,” Thornberg said. “It’s a matter of working through the inventory.”

Many had thought that the crisis in Wall Street had dealt a deathblow to their early retirement. But Thornberg explained that the mistake of Wall Street was in making these persons think that “they could retire early in the first place.”

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Despite the various governmental and other measures foreclosures continue to surge in February 2009. It is a spike of 30% from what it was in the same month in 2008.

Lenders too have imposed moratoriums on foreclosures but this does not seem to have reduced the number of foreclosure postings. The number of borrowers facing foreclosure increased by 30% from the levels of the previous year according to RealtyTrac.

Across the country about 291,000 units received at least one notice related to the foreclosure process. It showed an increase of 6% from January this year. Foreclosures are highly concentrated in two states – Florida and California. It is also spreading to other states like Idaho, Illinois as well as Oregon as the economy of USA continues to slide. Rich Sharga of ReatlyTrac said, “It doesn’t bode well. At least for the foreseeable future, it’s going to continue to be pretty ugly.”

Foreclosures have spiked although mortgage giants like Fannie Mae and Freddie Mac as well as other jumbo banks like JPMorgan Chase, Morgan Stanley, Citigroup and also Bank of America have temporarily halted foreclosure proceedings. They did so ahead of President Obama’s release of ambitious plans to tackle the foreclosure crisis that was launched recently. In New York and Florida the temporary hold on foreclosures have been lifted and this has caused numbers to rise sharply. Other states like Michigan are enacting legislation to allow for borrowers facing foreclosure to enjoy a grace period of 90 days to get their finances stabilized.

While foreclosures march on, the banks have stopped including their repossessed properties in sales list for the time being. RealtyTrac noted that there were about 700,000 bank-repossessed units across the country resulting in a “shadow inventory.” This could cause the housing crisis to drag on for more time than anticipated. Rick Sharga commented, “It’s going to take us longer than you might anticipate to burn through he inventory of distressed properties.”

The results show up the challenges that Obama and his economic advisors are facing. The Obama plan is targeting help to 9 million homeowners. It is hoped that they will continue to stay in their homes after refinancing or modifying their loans.

But the foreclosure contagion is spreading. About 12% of those with mortgages in America counting to 5.4 million are at least a month behind in their mortgage payments as per the findings of Mortgage Bankers Association.

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