Foreclosure Recap – Week #55

There is a new rule out there that is affecting homeowners in a foreclosure avoidance program. It seems that the Obama camp has done a fairly major overhaul of the way that the foreclosure avoidance program works. The way it used to work was that when you, as a borrower, applied for the plan to lower your payments, it went into effect almost immediately and then over the three month trial portion of the lowered payments, you were to gather pay stubs and other information for the lender in an attempt to make those reductions permanent. This was not being done so they redesign has a standard packet of documents that every borrower has to fill out in order to be approved and that information has to be submitted at time of application. The hope is that this will weed out the dead beats that are clogging the system and get the help to more people that actually need it and will use it properly.

The California area of Visalia-Porterville has become famous in a not so good way. It is ranked number 23rd in the nation in the numbers with regards to foreclosure. Last year they had a total of 6,350 homes fall to the foreclosure crisis. That is up 43 percent over the previous year and is a staggering amount for any area. That puts the Visalia-Porterville area higher in numbers than the Los Angeles metropolitan area, which is at 32 and the general San Francisco area where the foreclosure numbers are at 37. What may have happened is that the lower than average home prices in the area from about 2002 through 2005 may have lured a lot of people into the area and then they managed to get in too far above their means and when the bottom fell out they began losing in a big way.

This one comes from the New York Daily News. It seems that the city of New York is putting people into homes and moving them from shelters. This somewhat sounds like a great type of story that should make you at least feel good about things. The problem is that the city is putting people into homes, buildings and apartments that are in foreclosure so, as one of the examples in the article, a family was in a shelter for eight months and then got moved into a home in Queens. Not long after they found out that the home was in foreclosure, they were evicted and they are once again completely homeless. This is a part of the cities Work Advantage program. One that is spotted at best in the history that it has and the success rate or lack thereof. It is supposed to pay to put families into houses for a period of about two years. It is a story that everyone should read, especially those in New York.

The city of Milwaukee is famous for beer. Folks there might need to drink more of the local beverage but can no doubt afford to purchase it since there is a record number of job issues in the city and county. This article for the Milwaukee Journal Sentinel says that a second wave of foreclosures is hitting the city mostly due to the record job loss and lack of employed people in the area. This is not only going to have a long reaching effect on the individuals but also on the economy of the city as people fail to pay taxes on property and the foreclosures become a responsibility of the city. Last year homes here were selling for forty or more percent off value and averaged about $42,000. Today those same homes are being sold at $0,000 to $15,000. It appears that the lenders want to unload the property at whatever price they can just to be rid of the responsibility.

Courtesy of the Orlando Sentinel we get this fairly interesting article. It seems that the Florida court system, especially in and around Orange county, have gotten so inundated with foreclosures that the system is literally becoming clogged and choked to the point of utter stagnation. As a result the county has decided to join Miami Dade and Palm Beach Counties in offering the foreclosures at auction on the Internet. Another possibility being considered is to have the state totally bypass the normal foreclosure methods and adopt a law that will allow non-judicial foreclosures which would help to alleviate some of the back log by eliminating some of the red tape involved in the traditional foreclosure system. To put this in perspective, the Orange County area in Florida currently has 32,065 cases pending in the courts at this moment. When you figure that on an average each of these foreclosures require a clerk to do about five hours of work that equates to 160,325 hours of labor just for what is currently on the books even if nothing was added to that workload. That is over 18 years of labor just to get caught up.

The attorney general in the state of Ohio is suing the United Law Group, LTD in the state of California for conning consumers in its state. An Attorney, named Sean Alan Rutledge who has bilked peole out of millions of dollars, put the firm together. The attorney’s firm apparently took upfront fees from people and then never delivered on stopping the foreclosure of the property. The law firm is not licenses to work in the state of Ohio and has never filed any legal motions on behalf of the people that they allegedly represent. The attorney general is seeking disbarment for the attorney in this case. The company asked for upfront fees ranging between $1,500 and $4,000 for the service and also asked for access to the clients banking information and then withdrew money from those accounts.

According to the Chicago Tribune Business Section, the foreclosure numbers there are soaring in the fourth quarter of the year. They claim that in the final quarter of the year more people defaulted on a mortgage than at any other quarter of time since the year 2006. The article states information from a report from the Woodstock Institute also seem to lead to the conclusion that there is little or no signs that this trend is going to slow down, much less reverse, in the foreseeable future. The information from the institute outlines what caused the buildup to the breakdown and gives the figures that lead to that decline which has us in the position where we are today. The story is not confined to Chicago and the metro area but can also be brought to bear into most any other area of country as far as cause and effect.