The United States’ housing sector has been slowly recovering from the huge debacle during the recession but the growth has been much slower due to controversies surrounding foreclosures in the country. In late 2010, it has been found out that lenders and banks are not properly reviewing consumers’ mortgages. The robo-sign case has been first exposed in 1999 by mortgage fraud activists, where they referred the practice as robotic process of approving mortgage documents related to foreclosures. The robo-signers are persons who sign notary affidavits even without sufficient facts to support the foreclosure. Huge institutions like JP Morgan Chase, GMAC and Bank of America suspended their foreclosures across the country to investigate employees who are involved in the scandal.

The foreclosure statistics in the last quarter of 2010 showed that there had been a significant increase in foreclosed properties which alarmed the government and forced the Congress to amend the law for courts to accept electronic notarizations and notarizations outside of the state. This is to control the number of foreclosures that the bank could handle and at the same time carefully review all documents before the bank possesses the properties. Banks suspended foreclosures after the controversy has been exposed because this would leave negative effects in their institution and cripple the financial sector as well. Owning a lot of bad mortgages through foreclosures is a very costly process and with improper foreclosures, banks risk themselves in millions of dollars in debt. The worst case scenario though is that multiple banks would sell one foreclosed home because of banks’ inability to track which homes they foreclosed.

GSEs also took measures and asked banks and lenders to review all unjust foreclosures. They sent detailed instructions before they continue dealing with them. This is to regulate all Freddie Mac and Fannie Mae foreclosures and to ensure that the interest of consumers is still protected. After the investigations, banks fired all employees who were proven to be robo-signers. On the other hand, attorney generals in several states filed lawsuits seeking fines from banks for customer restitution. This could potentially cost lenders a lot.

The robo-sign controversy may have slowed down the recovery from recession but having it exposed early is also beneficial that it avoided the crippling of the financial sector before it’s too late. Further widespread of robo-signing could lead another economic downturn which would make recovery harder for the American people.

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Since the recession has been so intense and deep, recovery too from the crisis will take time. The first indication would be job generation. Without jobs any talk about recovery would be futile. The people must have money in their pockets to spend and thus generate demand. Secondly prices in the housing sector would have to stabilize allowing lenders to become more confident about advancing loans for purchasing houses.

Confidence of the consumers is vital for the economy. The shock has made most people turn to saving their money rather than splurging on credit cards. But economists are hopeful that people would start using their wallets again and not put everything in the piggy bank. Dennis Jacobe of Gallup said, “There’s a changed attitude toward debt and spending. Consumers need to feel more secure financially.”

In surveys of 2009 Gallup noted the discretionary spending dropped by 20% to 30% from the levels of 2008. Jacobe thinks that this will continue till the middle of 2010 when thing will improve. It is not good news for the retailers.

2010 will continue to be a year of difficult credit. Bill Hardekopf of LowCards.com who has co-authored The Credit Card Guidebook, said, “The thresholds of good credit and excellent credit – those bars have been raised. In 2009 credit was darn tight, and it will be just as tight in 2010.”

There is hope that 2010 will see the emergence of small and medium sized enterprises. With consumers keeping their hands inside their pockets the small traders like those operating eateries, dry cleaners and small shops see no need to hire new workers and stretch out. But generally it is they who would be providing the new jobs in the country – as they always have been doing without much hue and cry. It is they who have to be helped back on their tracks.

William Dunkelberg of National Federation of Independent Business (NFIB) predicted that the running year would be a “subpar” year for small business concerns. The growth would be below 3%. He said, “NFIB surveys (of its members) show hiring plans and capital spending plans at 35-year lows. With no customers, you don’t need inventory, you don’t need delivery trucks, you don’t need to add to the payroll.”

The future prospects of the construction sector continue to be bleak. Spending on this sector is expected to drop by 5% this year. Money coming from stimulus package is not sufficient to bring it back to the pre-recession mood.

Washington is continuing to help but this has become a contentious issue between the two parties. This does not bode well for the economy and the nation.

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Most of the borrowers are at a loss how to tackle the impending problem but the housing counselors are there with unsheathed swords waging a war against foreclosures. They have first hand knowledge of the various federal government plans involving $75 billion. The plans are there but the borrowers need to be navigated and for this the counselors, certified by HUD, are there on a non-profit basis.

Faith Schwartz of Hope Now said of the counselors that they “are really on the front lines advocating for the buyers.” She added, “This world has changed. It used to be sub-prime borrowers, and now the problem is an economic problem with delinquencies in prime.”

Carol Robinson of HomeFree USA begins work from 8 a.m. and often continues to well after sunset. She either directly meets the concerned persons or contacts them over the phone and sometimes by e-mails. The harrowing tales of woe of the clients seem to haunt her. She browses through the obituaries and write ups to see if any body she had interacted with have made news or if anything untoward had happened to them.

Many fail to keep their house. Marcia Griffin of HomeFree said it is better for the clients to know the harsh truth. She said, “As a non-profit, we can give you options. Sometimes we have to sit with you and say, ‘there’s no way.’” She tries to keep the office environment as comfort giving as possible so that the stress can be somewhat alleviated. The chairs are soft blue coloured. There are fig trees standing on clay urns. A brick wall stands exposed while scented flickering candles exude scents. She had taken the help of a Feng Shui expert to bring about this effect.

Robinson explains to her clients that banks are not compelled to make modifications. Hence they have to explain to the lenders that by doing so they gain through modifying the loan instead of proceeding with foreclosures. Lately lenders have become more amenable to this line of thinking. The banks have increased their staff strength and trained them to become more familiar with the government programmes.

There are signs everywhere in Robinson’s office that their efforts are paying off. Cards have been stuck on to a black cabinet with messages reading “thank you very much for your help during our ordeal” or “your thoughtfulness knows no end.” Another card read, “Your thoughtfulness knows no end.” One client gifted her a blue angel made of paper

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It is not so much sub-prime mortgages but recession that is at the root cause of rising foreclosures. In 2008 it was the toxic loans that had triggered the foreclosure wave but in the current year it is the bad days that are responsible for throwing out people from their houses.

Compared to the previous year there has been a sharp increase in foreclosure posting in Lackawanna County and Luzerne County. The increase has been by 4.2% and 2.4% respectively. The figures indicate that recession with its attendant evils of unemployment and falling wages are responsible for the crisis in northeastern Pennsylvania.

The increase in foreclosures today is attributable to the general economic gloom said Professor Satyajit Ghosh of University of Scranton. His subject of study is economics and finance. The local lenders had not indulged in toxic and risky loans but nevertheless this has not helped to keep it immune from the national disaster. Dr. Ghosh opined, “People are stretched to the limit. Maybe they have a conventional loan from a lender acting in good faith, but now they find themselves in a bad situation, where they may have lost their job, or the household lost an income, or they took another job at less pay.”

According to First American CoreLogic foreclosure postings dropped from April 2008 to May 2009 in Scranton-Wilkes-Barre-Hazelton metro region that comprises of the counties of Luzerne, Lackawanna and also Wyoming. But despite this the speed of foreclosure activity has been steadily increasing during the recent months.

CoreLogic noted that in April all the defaulting mortgage loans calculating to nearly 1.7% were in trouble. This was a modest improvement on the national figure of 1.8%. In April 2008 nearly 1.5% of all mortgage loan holders across the country were being threatened by some form of foreclosure.

Defaults have been increasing in the region. CoreLogic noted that nearly 4.4% of all the home loans in the region were lagging behind by at least 90 days. This as an increase of 3.6% in comparison to the previous year. Delinquencies are the first signs of impending foreclosures. Once borrowers start to lag behind it is difficult to catch up or manage a way out of the mess.

Dr. Ghosh commented, “We have been at a lower foreclosure level for some time because our banks and our homeowners didn’t go for exotic loans. These new foreclosures aren’t because of some irresponsible loans. It’s the recession.”

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Foreclosure news is taking precedence over all other issues – including those coming in from Afghanistan, Iran and South Korea. The international emergency that foreclosures have created poses a greater threat to the stability of the world than blood baths elsewhere in the world. This is the view of Joel p. Trachtman of Fletcher School of Law and Diplomacy, Tufts University. However he feels that the long winter is coming to an end and there are signs of the freeze thawing.

The crisis started in USA but soon became international because the entire financial system had become global by that time. The financial entities that were involved in the sub-prime mortgage fiasco included multinationals within and outside America. Other countries emulated the American system hoping to reap similar benefits. The whole exercise starting from the humble foreclosure of homes of ordinary folks and soon became a contagion that spread like an epidemic. American institutions were threatened. This meant their counterparts across the globe were also threatened. The wildfire of failure also spread through trade routes as exports to USA dropped. There were no takers of consumer goods in foreclosed America.

The root cause of the foreclosure crisis can be traced to the staggering increase in liquidity. This happened largely due to macroeconomics that was not matched by proportionate macro regulation. The excess of liquidity could be traced to low interest rates, China opening up with its exchange rates, rise in wealth from oil and other types of sovereign wealth funds. This led to the blowing up of the asset bubble. Cheap money was floating in the air. The question was – where to park it so that more than average returns could be reaped. Those who promised this came to be regarded as financial wizards and honoured with fees.

This surplus money flowed into the housing sector. There was a great demand, as usual for housing and this demand was fed by money flowing in. Those who engaged in house investments came to be regarded as financial wizards. The mortgage lenders were sure that since the security involved was something solid as real estate there was no fear of losing. Property value could never fall even if there were lending mistakes. This was a traditional belief. Legendary Warren Buffet had aptly summed up the situation and said, “It’s only when the tide goes out that you learn who’s been swimming naked.” The packaging and slicing of loans led to the swelling of the problem.

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The Obama Administration said that they are expanding the housing aid in order to give lenders amore incentives to folks on second mortgages. What has happened is back when the market was good it was not unheard of for lenders to give homeowners a second mortgage with little or no money to back the load as down payments. These loans were often given to people with much less than stellar credit and today many of the people that got those second mortgages are failing to be able to make the payments and keep them current.

CBS News reported that in Cape Coral, Florida one man came up with a unique way to attempt to sell his real estate. It seems that beachfront property has been particularly hard to sell in that particular market and he cam upon a way to improve it. Marc Joseph owns a company called Foreclosure Tours R Us and basically what they are doing is taking people on boat tours which show them the prospective property from a totally different perspective and all indications are that the idea is working and seems to be having some impact in turning around the local market.

People in the state of Michigan have begun attending forums help be lenders that are aimed at helping them come up with solutions to lower payments in hopes of stemming the rising foreclosures. It seems to be a little less nerve racking to the homeowner when they sit and discuss things one on one with a real human and everyone can see the emotions on each others faces. With the many different plans now in place from the Obama administration, people can use the explanations as to the plans and how or if they can qualify for the relief offered by them.

According to the people at Credit.com, the plan that the Obama camp had was to allow federal bankruptcy judges to modify some troubled home loans when people are in bankruptcy court in front of them. Unfortunately the bill failed to pass the Senate vote last Thursday. It would have been a huge help to the people facing bankruptcy because it would have given the bankruptcy judge the ability to reduce the principal for the troubled borrower to allow them an opportunity to get current and stay in their homes. While the Senate did not pass the bill they are keeping it available in the event that the overall situation worsens and then it may become a viable option at that time. There is concern on Capitol Hill that the lenders would change terms to increase the loans before the borrowers could feel the effects of any relief.

The New York Times gave us the story last week about some people that are about to be evicted out of the homes that they rent. The sad part of this story is that these renters did nothing wrong. They kept up payments and did everything that they were supposed to. Unfortunately the person that actually owned the homes they are living in and are renting from has defaulted on the mortgage and the house is being foreclosed and these people are going to lose the homes that they are in and they really have no way to stop it. These are the types of casualties that one doesn’t hear about or think about until a story like this is run.

The Memphis Daily News brings us the story of the former home of Suntrust Bank nearing the auction block due to foreclosure. The building its self is no stranger to this having been in foreclosure in the mid 1990s and even during the rocky start back in the late 1960s when the builder was having trouble raising enough capitol to even get it built. The building, which is located at 40 South Main in Memphis has been touted by many as a white elephant in the Memphis business skyline while others say it is a signature building that helps to define the area with the other huge bank buildings in the general area.

Once again the New York Times tells us of mishandling of funds. It seems that even though the world is in financial crisis nearing meltdown, they big banks are still doling out a surprising number of large paychecks not unlike the days of old where there was no problem looking. These same larger banks have posted phenomenal profits in the last quarter. Profits to the tune of Wells Fargo at 3 billion, Goldman Sachs at 2.8 billion, JP Morgan Chase at 2.1 billion, Bank of America at 4.25 billion and Citibank at 1.6 billion dollars in profit. All of this came during the same time that the senate buckled under pressures from lobbyists to try and help homeowners facing foreclosure.

If you want to get a complete walk through on how an average group of Americans deal with a normal day in these troubled time, the Associated Press posted and article which Google picked up which shows exactly how people feel about how America got in this position by giving huge open balances to College students, or mortgages for as much as ten times what the person’s salary was with no real thought as to how they might actually be able to repay the credit card loan or the mortgage. Most [people are surprised that the country held out as long as it did under those circumstances.

There is another facet of this crisis that often goes unnoticed and was just recently written up by the East Valley Tribune in Phoenix. That is the amount of pets that are left behind when families vacate or are forced out onto the streets. This puts a huge burden on animal shelters and animal adoption facilities because when the families leave, there are many times when they just can’t take the family pet or pets along. There are, I am sure, many reasons why this phenomenon has occurred but the simple fact of the matter is, there are animals in need.

In the Chicago Daily Herald is the story of how vandals and even the former owners of some foreclosed homes have taken to stripping the contents of the homes. They have been taking every thing from appliances to wall and floor coverings. It seems like just about anything is fair game in these troubled times. It is quite a disturbing trend in the Chicago Suburbs.

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Now, let’s discuss a little about foreclosure. Foreclosure is all about those people who forget to do a payment or because of some reason they unable to pay. There are people who have their own assets and still would take a loan from a bank. As the borrower is not able to pay back the first few payments, then the next thing which happens is that the bank gives a letter to the borrower. In that letter he is notified regarding the amout he is suppose to pay in due with other payments left.

This letter is actually a sign regarding the money which is supposed to be paid. It also signifies that as a borrower if you are not able to pay back the money, then your asset will come under foreclosure. These letters are also given to those other people like the trustee who are related to the non-payment of money. The letter which is sent for these kinds of problems related to foreclosure is known as “Notice of non-payment”. This is the way foreclosure movement works.

Now, when the letter is sent to the trustee, then he starts working over the foreclosure of the assets of the borrower. His first work is to collect people as much as possible to sell the asset. The trustee sees to that all the people who are related to selling and buying assets get the information about the selling of this asset. This information of the foreclosure is given to the borrower also, seeing to that he knows about the sales of the asset. Another ways to let the borrower and the other parties know about the foreclosure property sale is to advertise it in the newspaper.

So, this is the whole procedure and the working system in terms of rights in California. Every region works in a different way in terms of foreclosure and for every region it has its own different rights. For every borrower there are different rules and regulations in terms of debt. After sending of the letter, the bank gives round about ninety days to do the payments which are in debt. There are chances given to the borrower to clear his debts made. If the repayment is not done then the thing which is done is to sell the asset and the money which received by it is used to repayment of the bank loan.
So, then in order to get rid of this situation the borrower needs to think whether he will be able to repay the funds back or not, when he borrows money from the bank or from a money lender or any other agency. The borrower has to think whether he will ever repay the money back without any due or problem. Precautions are also supposed to be taken by the bank and the money lenders to see that whether there are any proofs in terms of the repayment of the money.

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It feels that the government steps as announced by Paulson and the Fed does not go deep down into the root of the foreclosure-ridden problems. It is simply a bailout and nothing more. The lenders who are responsible for this terrible foreclosure fiasco are being pulled on to the lifeboat while the ship sinks. The bail out will not do anything to stop the foreclosure rot that has taken on epidemic proportions. Rather it will be instrumental in dragging down the economy further – after all the game is being played with taxpayer’s money.

An integrated and comprehensive plan should reach out towards the ordinary hardworking citizen. They are already feeling the brunt of the Wall Street misdemeanors. If this issue is not addressed then any plan will just be a carbon copy of another. Only this time more taxpayer’s money will be put at risk. The taxpayer is being forced to buy predatory and dangerous loans from lenders who behaved in the most reprehensible and irresponsible manner. Multi million dollars belonging to the people are being pushed in to prop up private financial bodies. Yet millions of families who have been pushed into the chasm of financial ruin will continue to cry and moan.

The steps should aim at stopping 6.5 million foreclosures scheduled to surface within the next few months and by checking the falling property values will something of substance be done. Only those measures that will directly prevent 46 million families from drowning will be considered worth the effort. Only then can the economy begin to push ahead. It is the people who are the economy. Bailing out financial bigwigs is not the same as helping the man in the street facing homelessness.

It is silly to believe that the government will be able to check the foreclosure menace by buying off troubled debts. Mortgages of dubitable value have been sold off as securities that are so highly complex that the mess cannot be untangled. The pieces of the jigsaw cannot be put back into place. It is beyond the capabilities of the government. These securities have been sold to countless investors dotted across the globe.

The regulators and lawmakers have to take up a positive role if they want to save the country.

Or search foreclosures by state…

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The line of approach is the same everywhere with variations from one case to another. The scammers promise to open communication lines with the lenders and arbitrate as regards terms. The most dangerous is the deeding of the house to a third party assuring the borrowers that apparently they will get a breather to get back on their feet. Unfortunately in nine cases out of ten the medicines have proved to be more dangerous than the disease itself. On the one hand foreclosures gallop ahead and on the other following its trail are the vultures – the scammers. It has become a thriving business.

Many states have taken the lead in helping the borrowers to be warned of these dangerous elements. So far 18 states have taken legal measures to prevent foreclosure rescue scams by hemming in the practice with regulations. Six states – Idaho, Maine, Nebraska, Oregon, Virginia as well as Washington enacted the law this year. Florida is set to pass a similar law. The National Conference of State Legislators released this information.

The steps taken will allow the house owners few days time to cancel contracts made with these dubious companies without incurring any penalty. If the house is sold then 80% to 82% of the proceeds has to be given to the original owners. All this will require a written contract. Patricia Lantz (D), Washington State Rep, said that the main purpose is to le let the word circulate that these sort of predators picking the bones of hapless foreclosure victims will not be tolerated. She strongly added, “This is a deterrent to the worst of the worst.”

In 2007 Maryland already had a similar law targeting the scammers but this year in the last session a tougher stand has been taken banning any form of transfer of deed altogether. Washington D.C. and Massachusetts have such strict laws. The Bay State put a full stop permanently on foreclosure rescue scams with an eye to profits through an attorney general’s regulation. Most of the above board foreclosure rescue operations come from non-profit groups and do not normally charge fees. The usual procedure is for house owners seeking them out and not the reverse. On the other hand scammers locate the victims by combing through public records and the like.

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The house owners were initially hit by spiraling interest rates from sub-prim loans but now the menace is falling real estate prices that is making it impossible for either lenders or borrowers to sell the units and wiggle out of the foreclosure mess. For the borrowers there is no point in carrying on with a mortgage wherein the value of the house is less than the loan balance. So the latest tendency is to walk away leaving the keys with the lenders. Now these lenders are turning to auctions to relieve themselves of the load as vacant houses are creating problems and public as well as local government outrage.

The states that saw the highest number of new foreclosures are now seeing the greatest fall in the housing markets. Prices in Nevada, Florida and Arizona and California are down by 27%, 25% and 14% respectively.

The bust in the housing market is affecting many like Rick Boardman. When the housing sector was booming in 2000 Boardman took out his funds from stocks and put it into something real and solid like property. He was confident that this was good investment – something that would upbeat his lifestyle. He and his wife purchased 20 acres of invaluable property in Maryland, waterfront area. He constructed two units – he would sell one and with the profits build his own dream house to reside in. But with the sudden downturn in the market the dream has turned into the nightmare of not being able to pay for mortgage dues.

The real estate tumble down is now spreading its tentacles to the prime loan takers also. It is crossing economic frontiers to threaten fancy gated mansions and million dollar vacation houses. Foreclosures increased by an astronomical 90% from what it were the previous year. Foreclosures include all the stages of the judicial process from default notice to court auction and bank repossession. Some areas continue to be worse off than others. California foreclosure figures have jumped by 350% and it includes traditional loans as well and that too during the spring nest-building season.

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