Foreclosure Recap – Week #26
The New York Daily news aired the story on the 26th about Michael Jackson’s Neverland Ranch became too costly to keep up and after years of legal battles around the allegations of child sexual abuse Michael moved from his beloved ranch and never returned again. The house was to be auctioned in a foreclosure proceeding until on the night before the foreclosure date a company stepped in and bought the ranch for a sum of 23 million dollars by literally buying the loan and taking the estate off his hands and taking the debt off his balance sheet. The story is interesting and at times heart warming and while it has little to do with the foreclosure things today, since he recently passed it seemed like a great leading story for this weeks recap.
The National Low Income Housing Coalition report says that all too often the cat of foreclosure ends up with the family who is foreclosed upon ending up homeless and living on the streets. The estimate is that the figure is somewhere in the neighborhood of forty percent of people that are living homeless are there because of the act of a foreclosure or property repossession. The report went on to say that some of the contributing factors to the foreclosure were health care costs and the lack of legal assistance.
This article quotes RealtyTracs web site as stating that the current statistics on foreclosures show a nationwide increase in foreclosures from 2007 of 81 percent. If you look at the figures against the year 2006 the increase is 225 percent and the numbers for 2009 are even steeper and there appears to be little to no end in sight at this point in time. The bright spot in the article is that it is full of things that you need to know about foreclosure and your legal rights and what things you can do to possibly stay off the proceeding before it actually begins.
The Examiner brings us a rather revealing article on Florida and the fact that it is not ready to be hit with another hurricane. Not that that is something that anyone is ready to do at any time but the vast majority, about 83 percent that were surveyed said that they have not taken steps to make the current home stronger or taken any actions to help to prepare for the hurricane season which officially began on June 1 of this year. On top of that a staggering 66 percent have not even gotten together a basic hurricane survival kit of flashlight and basic needs. The story finds that the economic state of the country is a huge part of the decision to do that because so many people are much more concerned with the pressing bills than they are about the possibility of an obscure hurricane actually hitting the place where they live.
While this one doesn’t actually pertain to personal property that is being foreclosed. But what it does do is give some insight into things that cause foreclosure and how pressure from the outside can come in to play and cause issues even when there is no internal reason that the property should face foreclosure. More often than not people and businesses have no actual control over the reasons that they are faced into foreclosure and as a result they have little or no way to avoid it.
The most trusted name in news and the go to place for most papers and televisions stations, the Associated Press reports that home prices posted an annual 18.1 percent drop in April. These numbers could be in part due to the fact that foreclosures continue to rise at a steadily increasing rate and the efforts by government and banks to slow that rate are not being done fast enough to have a decent impact in the results. While this is the third month in a row that the drop has not been in the record making numbers territory, it is still sign that enough is not being done fast enough to stop the bleeding that has hit the arterial vein of the housing industry. Loan modifications were up 55 percent and foreclosures were up 22 percent so those number are showing improvement but they need to be larger and faster if there is going to be an effective alt put to this crisis.
The Wall Street Journal reports that a full 25 percent, that is one out of four mortgage foreclosures that are happening are done as a strategic move. In other words the person who is letting the mortgage fall into foreclosure is doing so when they are fully capable and able to make the mortgage payment. A vastly growing percentage of people are being driven by the accrual of negative equity in the home to just let it go and walk away. The common amount seems to be anything over a 10 percent negative equity. It goes on to say how when the stigma around foreclosure lessens and more people start to do it in a neighborhood it can affect all the property values to the point that it makes more sense to follow the trend than it does to hold on to the house as a traditional long term investment.
The Miami Herald brings in the story of how President Obama has expanded the program for people who are considered underwater borrowers. That means that they are helping to refinance homes at lower rates even if they have a place that they owe as much as 25 percent less than what it is actually worth. The new guidelines could help a lot more people than before. The initial terms of the program as rolled out earlier this year allowed people to take advantage id they were five percent or less upside down in the loan. In other words if your home was worth $200,000 you could owe no more than $210,000 and qualify. Under the new terms that same house would be eligible even if you owed as much as $250,000 on it. That should allow people in most states and cities to be able to take advantage unless they are severely under the water level.
This is a helpful little bit about the state of short sales, what they are and what they are not and what they can do for you. It is worth a few moments time to review so that you can come to understand what the short sale affords the average person. There are some bad points and pitfalls that you need to know and beware of before you decide to go after this option to solve your mortgage problems.