Learning Center » Florida Foreclosure Homes

Fannie And Freddie And The Foreclosure Blame Game

Julie Parker — Mon, 15 Sep 2008 12:40:40 +0000

The two jumbo mortgage bodies Fannie Mae and Freddie Mac are being targets of the foreclosure blame game by many. To save the two units, that hold nearly half the mortgages of USA, the federal government has stepped in.

In the middle of the raging foreclosure crisis the taking over of Fannie and Freddie has placed a lot of responsibility on the new regulator. On the one hand foreclosures have to be contained and on the other hand remedial measures have to be taken to rejuvenate the sick housing market. All this juggling has to be done taking into account that the money belongs to the taxpayers.

The Federal Finance Agency has taken over the reins of these two mortgage companies that guarantee house loans worth about $5 trillion. The agency made its debut last summer. It now has direct control in supervising the activities of the two companies. The board of directors of the companies have been done away with and replaced by this agency.

The FHFA has the right to deflate the financial remuneration of the outgoing executives and fix the salaries of the new entrants. The new incumbents would be getting considerably less pay packets.

Although the government has downed shutters on the powerful lobbying operations of Fannie Mae and Freddie Mac there still is enough influence floating around in this foreclosure weather to bend the agencies actions as regards the role of the duo in the foreclosure market. In all probability the realtors, mortgage brokers and developers will expect rolling back of fees and easing of the lending formalities to make up for the losses suffered due to defaults and foreclosures. JerryHoward of National Association of Home Builders feels “the faster and more energetically (Fannie and Freddie) are in the game, the faster the anticipated bottom of the housing market can be reached.” His argument is that the more they tighten “the more pain is felt through the entire industry.” But reacting to the foreclosure crisis Fannie and Freddie have increased the fees for borrowers who do not have high credit marks and are simultaneously asking for larger down payments. This is going to stifle demand for housing and hold back sale of houses. On the other hand if the agency allows the lending standards to fall too back then there is the risk of another financial crisis. So it is really tight rope walking for FHFA while foreclosure clouds continue to gather force.

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Foreclosures Lashing The Beaches Enforcing Shutdowns

Julie Parker — Fri, 05 Sep 2008 13:00:15 +0000

Foreclosures are lashing the beaches and enforcing thriving business to shut down. Beach business is badly affected by the reigning foreclosure crisis.

One instance is the collapsing of an important contract targeting business prospects in Fort Myers Beach. It did not materialize when the developer succumbed to foreclosure. The owners of the beach business are now left to salvage through the mess that has been left behind. What is going to happen to Seafarer’s Village and its satellite area nobody knows. The Fifth Third Bank is suing the developer of a default of $21.5 million loan. This has cancelled a jumbo plan of redeveloping the area south of Times Square.

Nick Dakos the owner of Beach Liquors said that the sensed ahead that the managing partner was not doing anything to give a push to the plaza that would be beneficial to the tenants also. The manager put up an appearance of everything being hunky dory but actually that was not so. He added, “We knew something was going on.”

For the time being others like Dakos running local business can only wait, watch and hope. Dakos’ shop is in the middle of vacant units. In the building there are only two other shops open – one selling T-shirts and another a clinic. Dakos comments that a refurbishing move would definitely have given business a push. There are many who feel that if once the facelift is completed business will roll in. But even if they started doing it from today it would still take a long time to see results.

Local taxi driver, Floyd Thomas, echoes similar sentiments. A looming unoccupied building does not look good. It does not bode well for the season just about to begin. He shakes his head and says, “It’s not a good thing.”

The owner of the property Dave Meyers could not be contacted. The manager at the site also declined to cooperate and make any statement. The tenants at Seafarer’s Plaza are now making their rent payments of Fifth Third Bank.

The inaction is making Dakos uneasy. He says that he might have to move on to greener pastures. But where? Many like him live off the beach with one business linked to another. Foreclosures are ubiquitous and all pervading. The only solid reality is the golden beach. Waves come and waves retreat. Foreclosures too will go away one day leaving behind the sparkling sands.

Hope Now Spells Hope To 2 Million Foreclosure Victims

Julie Parker — Mon, 01 Sep 2008 13:41:00 +0000

The Hope Now alliance has spelt hope to 2 million foreclosure victims but unfortunately the numbers paled against the numbers of new foreclosures rushing in like a flood. During the last 13 months Hope Now has achieved the impossible – helped 2 million foreclosure victims. This alliance supported by the Bush government consists of mortgage servicers, counselors as well as investors. Over 192,000 problem loans were tackled in July. It marks a 6% increase over its achievements in June.

Despite these promising figures foreclosures continue to gallop ahead. In July there were 91,752 foreclosure postings marking a 14% jump over June figures. It is more than double the number of foreclosures noted in July 2007 when 42,03 houses were foreclosed upon. Nicholas Retsinas of Harvard University commented, “Foreclosures have outpaced the efforts to combat them.”

Hope Now is also gearing itself to reach out to more troubled borrowers and to let them know that help is waiting said Faith Schwartz the executive director of the body. Hope Now has been making its presence felt through the advertising media, public notifications as well as personal letters to the borrowers who are at risk. Simultaneously it is holding various workshops across the county.

Unfortunately even after months of efforts many are still reluctant to come forward to communicate with Hope Now. Since November 2007 letters have been sent out to 1.6 million defaulters. More than 80% have not answered even after a month has gone by since receiving the letters. Faith Schwartz reiterated, “Outreach is crucial. Borrowers have to talk to their lenders. That’s the most important message we communicate.” Usually only 2% to a maximum of 3% respond as per mortgage industry statistics according to Mortgage Bankers Association. Hope Now efforts to ally with community groups and organize workshops are being well received. Borrowers get a chance to meet directly with lenders or their representatives as well as housing counselors. Since March 2008 there have been 20 such events that drew 11,500 house owners.

Last week Florida hosted many such workshops and despite the Tropical Storm Fay a record number of 3,300 foreclosure victims participated. Faith passionately said “We are committed to helping as many borrowers as possible and we’re not going to let anything, including a tropical storm, get in the way.” Twenty mortgage lenders and service providers took part in the Florida chapter of events including big names like Morgan Chase, Wells Fargo and Washington Mutual.