Foreclosure Recap – Week #41
The first story this week is brought to you from the News Giant CNBC. It seems that the numbers are higher than ever when it comes to foreclosed homes. In this horrible foreclosure crisis, mortgage lenders, who once called a moratorium on foreclosures, have decided to kick folks out of their homes, which have resulted in higher and higher numbers. People are left with the unfortunate decision of having to continue to pay for a house that is so far underwater that they will never in the foreseeable future have any equity on it. Many just hand the keys back to the bank and walk away. A great many people are deciding to do the latter rather than the former.
We all read the numbers and see the headlines week after week on how many homes have been foreclosed and how many workers lost their jobs. It doesn’t usually strike one as incredible if you look at the short-term numbers. But if you look at the totals, it is downright scary. This article focuses on the plight of those people affected by foreclosure, which are growing as we speak. The people that are written about here took it upon themselves to form a tent city near Pittsburgh to draw attention to the problem during the recent G-20 Summit on the economy.
Did you realize that on the average there is a home entering foreclosure in the United States every 13 seconds? Do the math – there are 24 hours in a day, which breaks down to 86,400 seconds. If you divide 13 into that number, that is over 6,646 per day. If that number isn’t enough to scare, you need to a serious reality check. That is well over 2 million homes per year in this country.
Another scary thing about the current problem in the real estate market is that a good portion of the politicians that are responsible for the laws that foreclose or stop foreclosure are actually siding with the financial institutions. That means that there are a good portion of them that are actually agreeing with the way homes are being foreclosed upon and, as a result, these are not fighting to help keep you and I in our homes.
The New York Daily News, one of the most watched and respected papers in the United States, if not the world, has run an article stating that there is no solution for the foreclosure crisis in this country. Coming from a paper with the clout that the Times has, that is a story that has been generating much interest. A law intended to help financially troubled New Yorkers keep their homes has been a big bust so far, according to a report obtained by the Daily News. In the face of a rising tide of foreclosures, state lawmakers a year ago approved the Foreclosure Prevention and Responsible Lending Act, requiring that borrowers with subprime loans at risk of losing their homes get an opportunity to meet with their lenders to negotiate possible solutions. Both sides are supposed to come to a compromise. As of yet, only a tiny minority of the negotiating sessions has resulted in settlements, according to a new study conducted by the Center for New York City Neighborhoods.
This article proposes to help you go through the steps of restructuring your loan to avoid foreclosure and gives you the information on how and what to modify to get you to that end. The article really gives some fairly basic information, the same as most of what can be found almost anywhere on the web. It looks like a legitimate article until you dig a little deeper and see that a loan modification company sponsors it and the rest of the page is written in some foreign language. It is worth looking at only to find out what to avoid in an article.
When the crisis began it was mostly the overburdened middle and lower class of homeowners that were forced into the foreclosure arena. Today, due to the fact this crisis has gone on for so long, it is starting to affect even those folks that you wouldn’t consider to be at risk for problems. In fact, the upper tier of homes now make up almost twice as much of the market as they did only three short years ago when things started to worsen. At the height of the real estate bubble, homes in the bottom one-third of the market made up almost 55 percent of all foreclosures. Homes in the middle tier made up almost 29 percent of foreclosures and homes in the top tier represented only 16 percent. In July of 2009, the bottom tier level made up 35 percent of foreclosures, while the middle tier accounted for 35 percent. Top tier homes currently makes up about 30 percent of all foreclosed properties on the market.
The latest celebrity to have a house fall to foreclosure is singer Toni Braxton who was recently served with a foreclosure notice on her Century City, California home. Her mortgage holder, City National Bank, claimed that she owed more than $44,000 in interest alone on the home.
The Associated Press gives us this story of mismanagement and errors from the banking industry, which is marring the recovery and the mortgage relief efforts of the federal government. According to this AP story, these are in some instances very minute errors that can cause eventual devastating results. In one instance, a single mom, who lives with her 10-year old daughter, was losing her house in suburban Maryland after her mortgage lender threw her out of a government loan modification program. The problem was she was notified of a seven percent error. In this instance, an error of seven cents could have actually caused her to lose her home by getting her removed from a program that the government designed to help people like her. The Associated Press inquired a little deeper with the lender and was told that the problem was actually that she was below the income level for that program. However, the lender was going to put the foreclosure on hold for now. The story is one that every homeowner in this country needs to read and take to heart because it shows that there are many ways to lose a home.
