Foreclosure Recap – Week #42
In the first story this week is a fourth grader who asked president elect Obama “Why do people hate you?” President Obama was making his first Presidential visit to New Orleans this week and, while there, he attended a town hall meeting. During Thursday’s meeting, the 44th President answered some tough questions but the toughest question of all came from the 9-year-old fourth grader. The story fills in some of the gaps as to what the president is thinking and gives us an insight as to how his thought process goes.
If you, like millions of other Americans in this country, are considering the purchase of a foreclosure, either to personally live in it or turn it into profit, then you definitely will want to review this story. It walks you through what it considers to be the seven steps you need to take when purchasing a foreclosure so you don’t end up losing from these types of deals. The guidelines are just some rules that you can follow. But if you follow the outlined steps, they claim that you can easily save 50 percent off a home’s actual value and, in many cases, end up with property at as much as twenty percent below what property in any given area is actually selling for at that moment. Twenty percent lower than fifty percent is an astonishing deal.
We all know that this country, if not the world, is facing a major mortgage and housing crisis. That is no secret. But how bad do people think the housing market will become? If you believe what is written here in this article, those numbers are going to become absolutely staggering. According to the story 25 million is about where it could and should end up at the current rate and following the foreclosure forecasts. In fact, at the current rate of files, a new foreclosure is filed about every ten seconds in this country alone. Even though things have slowed a small bit, we’re not out of the woods. Six states account for 62% of the nation’s foreclosure activity: California, Florida, Arizona, Nevada, Illinois and Michigan.
In a story from the Grand Rapids Michigan press we find that over half of the nearly 14,000 homeless people in western Michigan are homeless for the first time in their lives. The story tells of the bad side about living in the Great Lakes state and how the stereotypical homeless person has become a drug addict. However, today you are more likely to find a family that was not long ago a middle-income group living in a comfortable home before a job loss caused them to slip into a poorer category.
CBS News brings us a new story about things we never think about-the housing market in Michigan and how it affects its inhabitants. It seems that the officials there are concerned that the more than 40,000 newly foreclosed and emptied homes in the Detroit area are going to become targets, especially with Halloween approaching, by arsonists. It seems that there have been rashes of fires that have been called arson lately and they expect that the numbers are going to go higher as people just do things they never would have ordinarily done. In fact, some people even suspect that the folks that were evicted might decide to ignite their old homes figuring if they can‘t have it, no one will.
It seems that the previously affluent area around Fishers, Indiana near Indianapolis has been extremely hard hit with the present crisis in the foreclosure market. Plans for a water park that was to be built in the area has been hit for yet another time with financial issues that have left the future of the entire project in doubt and jeopardy. The developer of the proposed $80 million project is facing foreclosure on the property while adjoining land, critical to the project’s development, has been scheduled for liquidation by a lender. The project was to be known as Paradise Bay and was to be constructed on the former Britton Golf Course site at State Road 37 and East 131st Street, but is roughly two years behind schedule leaving speculation to the fact that it may never see the light of day.
You might think that there would be ways that foreclosures could be stopped. The reality is that there are recent reports that show that some people who could stop foreclosure on mortgage loans are not doing so because lenders are finding financial advantages in avoiding modification programs. The report, which was produced by the National Consumer Law Center (NCLC), noted that mortgage service providers may find it more cost effective to encourage people to go into foreclosure rather than enroll them in home modification programs. It is disturbing for most people to find out that these service providers are not doing their job.
This week we’re going to end on a happier note than usual. This is a story about a lender, Bank of America who chose not to foreclose on an elderly couple that has been in the home for over forty years. The wife is terminally ill and they were about to be evicted, until Bank of America stepped in. They used an unusual tactic that is being used on occasion to help some debt-strapped seniors locked into exotic mortgages known as option ARMs from losing their homes and saved the couple. The loan modification has made it possible for the elderly couple to remain in their home almost payment free. They set them up with a reverse mortgage the bank paid the proceeds to its self. A reverse mortgage is a form of equity loan available to older homeowners that generally doesn’t need to be repaid until after the homeowner dies. That means he can remain in his home without having to make mortgage payments. When he dies, the house goes back to Bank of America, and his heirs can choose to buy it back for the $85,000 plus interest and fees. Or, if the heirs choose to walk away, the bank can sell the house, and any proceeds above the loan amount would go to Mr. Garcia’s family.
