Congressional Debate Expected Over an Economic Bill That Could End Foreclosure Problem 

Filed under:Foreclosure Crisis onWednesday, January 7th, 2009 | No Comments

January 20, 2009 is the target date aimed by Democratic lawmakers to pass a bill which they claimed could save the country’s economy and help reduce the number of foreclosure homes. This is also the day when Barack Obama will be inaugurated as the new President of the United States.

However, the enactment of the economic bill that can provide relief to homeowners facing the threat of foreclosure is expected to be delayed into the last week of January or first week of February, according to Dan Clifton, an analyst with Strategas Research Partners, an investment research firm.

He said that Republicans do not want to vote on a big spending bill without knowing what it is in it.
The economic recovery bill, which is expected to also abate the alarming rate of foreclosures in the country, is estimated to exceed $700 billion. If approved, this will be the largest spending measure of all time.

Senate Minority Leader Mitch McConnell explains that lawmakers owe it to the American people to review the proposal, at least for a week, to ensure that there will be no fraud and to avoid abuse and mismanagement of taxpayers’ funds.

Both House Minority Leader John Boehner and McConnell have called on the Congress to conduct hearings on the economic recovery bill that is also expected to end foreclosure problems.
Clifton believes that Senate Democrats may include measures that may entice moderate Republicans to support the bill. He thinks that Democrats may include a tax break provision, called net operating loss carryback that permits businesses to apply their losses to cut down their tax liability.

However, he expects that the impending release of the yearly Budget and Economic Outlook by the Congressional Budget Office will impede the passage of the economic recovery bill and hinder giving an immediate solution to the problem of foreclosure properties.

The annual report is said to contain the United States’ estimated deficit which is expected to be near $1 trillion.

Related Posts:

Survey Reveals Fewer Adults Consider Buying Foreclosed Homes 

Filed under:Foreclosed Homes onTuesday, December 23rd, 2008 | No Comments

A survey conducted by real estate search engine Trulia.com and research firm RealtyTrac says that forty-seven percent of U.S. adults would probably consider buying a foreclosed home and eighty percent were worried with the uncertainties involved in purchasing foreclosure homes.

More than 75 percent of buyers believe that they should have a 25 percent discount on foreclosed home while the third of this insist a 50 percent discount, all according to the survey.

There is actually an estimated 2.25 million U.S. homes that will be foreclosed this year, according to the U.S. Federal Deposit Insurance Corp and Federal Reserve and as a result of this, builders of new homes will compete with foreclosure homes.

This October’s sales indicated a 45 percent “distressed” sales, either it could be short of sales or it could be because of the prices is less than the outstanding loan, or foreclosures.

Spokesman Brent Anderson of Meritage Homes Corp hopes that this survey is true since this mean that majority of the buyers are more interested in buying new homes than the foreclosed ones. But Anderson also explained that although most buyers avoid buying foreclosure properties, the publicity of the low prices asked for these foreclosures, results to the buyers caving in and buying.

Stuart Miller, a chief executive officer of Lennar Corp even explained that because the homebuilding world is now dominated by foreclosures and they are even coming faster and more furiously than in the past, buyers think that they have a good deal with these foreclosed properties.

Another reason that can be found with this eagerness with foreclosure properties is the vast extent of housing decline and there is only a little number of buyers compared to six months ago.

This online survey on foreclosures was conducted for Trulia.com and RealtyTrac was done by Harris Interactive from November 11 to November 13 involving 2,033 U.S. adults.

Related Posts:

Is It Good to Buy a Foreclosed Property Now? 

Filed under:Foreclosure Market onMonday, December 22nd, 2008 | No Comments

If you are an investor or a first-time homebuyer considering taking advantage of the low prices of foreclosure properties, then check the following guidelines:

  1. Research your local real estate market.
    Look for foreclosure listings in your local newspapers and on web sites. Compare current and previous weeks’ prices. You will see how the prices are declining and if they are bottoming out. If you see the same prices appearing for the same houses for some weeks, then probably prices have bottomed out.

    Check also if there are news about continued addition of new foreclosed properties to the housing market. Rising inventory means possible further reduction in home prices.

  2. Be ready with your financing.
    As most everyone knows, you have more leverage if you have ready financing. The owners of the foreclosure properties can give more consideration to your bid price if they know your financing is in place.
  3. Check foreclosure properties owned by the U.S. Department of Housing and Urban Development.
    The HUD might have properties that are priced much lower than foreclosed properties held by banks. Nevertheless, consider also the fact that banks are more strict in implementing foreclosure policies, hence you can be sure that their properties are free of liens and claimants.
  4. Take advantage of the deep reduction in mortgage rates.
    If you are a first-time homebuyer, then you have at least three factors working to your advantage. They are lower interest rates, lower-priced foreclosed homes and federal programs aimed at helping lower-income families acquire their first homes
  5. Negotiate directly with the owners of foreclosure properties.
    If you believe that you have adequately researched about foreclosure and home buying processes and pricing trends, then it is more cost-effective to approach banks, pension funds, insurance companies about their properties for sale than to hire an agent.

Related Posts:

Illinois Foreclosures Soared 

Filed under:Illinois onFriday, December 19th, 2008 | No Comments

California-based RealtyTrac said that home foreclosure filings at the city of Illinois have skyrocketed to 31 percent this October—a big leap compared to the rates of Illinois foreclosures last year. On the national level, the rate of foreclosure properties jumped to 25%. RealtyTrac said that the data means that one out of 452 homes has received a foreclosure notice.

With the new record of Illinois foreclosures, the state is now ranked ninth in the top areas in the US that have the most number of foreclosure properties. More than half of the 12, 682 foreclosure homes in the state came from Cook County.

Meanwhile, one out of every 226 homes out of 990 in Will County has received a foreclosure notice. DuPage County listed one receipt of notice out of every 441 homes in the area. Lake County, on the other hand, is also trailing behind with a record of one notice out every 307 homes.

The above-mentioned data were adequate explanation of the 25% rise of the rates in Illinois foreclosures compared to its September rates. Nationally, rates were up to 5% compared to the national feel last September.

RealtyTrac Chief Executive Officer James J. Saccacio said that with increase in the rates of October, the month is now the 34th mark of the continuous increase in the number of foreclosures in the US compared to last year. Saccacio also said that the efforts of the government, borrowers and lenders to prevent or decrease the number of foreclosure homes in the country are admirable. However, he cited that more concrete actions and programs must be done to stop the growth of the alarming numbers.

Overall, RealtyTrac said that the states of Nevada, Florida and Arizona are believed to be holding the highest number of foreclosure rates in the country.

Find more Illinois Foreclosures by Top Cities:

Related Posts:

Bailout Plan for Foreclosures Active but Taxpayers Not Happy 

Filed under:Foreclosure Filings onWednesday, December 17th, 2008 | No Comments

With the continuing rise of foreclosures sweeping across the country, the federal government has decided to use billions of taxpayer’s money in prevention programs against foreclosures. This includes the FHASecure and Hope for Homeowners programs, which guarantees the refinancing of expensive mortgages that brought these homeowners into trouble and convert them into more affordable loans.

The federal government is also funding the mortgage modification programs for loans facing foreclosures that are owned by mortgage giants Fannie Mae and Freddie Mac. Several sectors are also pushing for the use of a portion of the $700 billion Troubled Assets Relief Program to directly bail out troubled homeowners from foreclosures.

These program, although design to help people avoid foreclosures, only infuriated several taxpayers, particularly those who did not go with the wave during the home buying spree when Adjustable Rate Mortgages were offered a few years back. They feel no remorse for people who were not careful to spend beyond their means and now are in trouble because of their bad decisions.

Other taxpayers are also losing their jobs due to the economic problems they believed were caused by these people who made the wrong decision in taking on mortgages, which they could not possibly pay. Now that these people who made the wrong decisions are facing foreclosures, taxpayers are furious that the government would spend billions to help these people, while those who did not cause the problem are receiving zero dollars.

On the other hand, experts are explaining the need for the government to bail out homeowners in mortgage trouble. As the number of foreclosed properties grew astronomical, home values are affected severely and these sharp declines in prices will continue to cripple the economy. Letting delinquencies slide much further will only create more damage on a national level and will affect the entire financial system.

Although it seems unfair for others, supporting these bailout programs will be beneficial for the nation as a whole and everyone will eventually benefit from it.

Related Posts:

Unemployment & Foreclosures Continue to Depress Housing Market 

Filed under:Foreclosure Market onTuesday, December 16th, 2008 | No Comments

Mortgage rates in the U.S. have reached their lowest level in three years, but these rates have not been successful in reviving the depressed housing market due to the continued flooding of the market with foreclosed properties.

Fannie Mae’s chief economist Doug Duncan that the reduction of interest rates will encourage some buyers to acquire their first homes, but the rising unemployment rate and the continued increase in foreclosures have been blocking the recovery of the housing market.

Nevertheless, the federal government’s efforts to help the mortgage securities sector prompted a bond recovery that reduced 30-year mortgage loan rates to 5.5 percent. The reduced interest rates also increased the number of home purchase applications by 38 percent and the number of home refinancing applications by 203 percent, according to the Mortgage Bankers Association.

Mortgage lenders also said that more borrowers refinancing their mortgage loans have shifted away from flexible-rate loans as lenders moved away from loose lending requirements to prevent further foreclosures.

Even with some movements in the purchasing side of the housing market, the inventory of unsold foreclosed homes continues to increase, putting supply at near record peaks. Although home prices have been decreasing to their lowest levels, consumers have not been responding to the housing market because of fears of unemployment and further declines in the national economy.

According to the U.S. Labor Department, the nationwide unemployment rate has reached 6.7 percent in December, the highest since 1993. The unemployment rate is computed by dividing the total number of unemployed workers by the total number of civilian employees. In November, more than half a million jobs were lost, bringing the annual total job loss to nearly 2 million in 2008.

Many financial analysts believe that the unemployment rate could reach eight to ten percent, potentially increasing the number of homeowners in danger of foreclosure. In just the first week of November, eight of the largest employers in the U.S. terminated 15,000 employees from their work force.

Related Posts:

Useless Solutions to Foreclosure Crisis 

Filed under:Foreclosure Crisis onMonday, December 15th, 2008 | No Comments

The government has taken a step to help ease the housing crisis the nation is experiencing today by bringing 30-year mortgage rates down to 4.5 percent. However, this would only be applicable to individuals planning of investing on a new home. Such a scheme can never address the already existing homeowners who are drowning in their mortgages. Neither is it addressing foreclosures at its roots.

The Treasury Department, in the person of Secretary Hank Paulson, has granted over a trillion dollars worth bailout plans for investment firms such as Wall Street and other banking institutions considered major. However, instead of using the amount to lend borrowers, lenders have been keeping the fund rendering it useless. This does not post any form of support to the many troubled homeowners with nearly or even already foreclosed properties.

Experts say the 4.5 percent rate change could attract more interested buyers the housing markets. With this influx in borrowers, home pricing may be brought to a stabilized state. Yet, with the great number of troubled homeowners already existing, the sales activity from the rate change may not be sufficient to overcome the messy situation.

Another posting threat to an increase in foreclosures is the increasing number of job losses. From September to November, the rate of jobless individuals, has already reached 12.8 percent, including laid-off workers and those without a permanent job or just having part-time jobs. The growing percentage of unemployment pre-empts more homeowners having to end up with foreclosures due to lack of source of income to cover for mortgages.

In order to win this battle against foreclosures, FDIC Chair Sheila Bair has proposed some ways that could be taken. First, lenders may help homeowners by modifying interest rates, even the principal, so that monthly payments may be reduced and become relatively more affordable. Another is for the government to refinance, with the help of Federal Housing Association, after acquiring at-risk mortgages. An idea Federal Reserve Chairman Ben Barnanke still opposes saying the solution to this problem does not just take helping those in need.

Related Posts:

Obama Accused Bush of not taking Actions against Foreclosures 

Filed under:Foreclosure Filings, Foreclosures onFriday, December 12th, 2008 | No Comments

For the first time since his election, President-elect Obama criticized the current administration for its lack of effective actions and countermeasures in stopping the flood of foreclosures that is hitting the nation.

Disappointed on the slow action of the administration in coming up with a favorable package that will not only help homeowners in danger of foreclosures, but would also be beneficial for the whole nation. If no apparent action can be established until January 20, 2009 when he takes office, Obama promises to take sufficient and immediate steps to stem this tide of foreclosures.

The Bush administration reacted by pointing out programs to address the issues on foreclosures that are handled through the efforts of the Federal Housing Authority in collaboration with the private and banking sectors. Admitting that there are no definite solutions to the problem, administration officials on the other hand highlighted the aggressive steps in dealing with the housing issues by strengthening both Fannie Mae and Freddie Mac in a bid to curtail the impact of foreclosures and salvage workable mortgages. Additional programs and options are also ongoing study in an effort to keep families in their homes.

President-elect Obama disclosed that his economic team is contemplating the merits of a 90-day moratorium so homeowners can work out and renegotiate with their banks and lenders on how to restructure their loans to make payments affordable and sustainable. Obama pointed out the efforts of struggling Americans who are sacrificing everything just to make their monthly payments, avoid foreclosures, and stay at their homes.

Obama described the stimulus package being drawn by his economic team as vital to the recovery of the economy, stop foreclosures, save the auto industry and put Wall Street back to top form. According to Obama, the economic recovery plan does not involve simple dole outs of federal money but would involve a radical change in how the country does business that would benefit the whole economy.

Related Posts:

$1B Budget - Answer to Foreclosure Dilemma 

Filed under:Foreclosure Help onThursday, December 11th, 2008 | No Comments

Black Entertainment Television founder and owner of RLJ holdings, Robert Johnson announced to a group of bankers, housing activists and regulators Monday that he holds the solution to the lingering crisis of home foreclosures.

Johnson believes that the federal government should shell out $1 billion to be used for funding a plan that would allow lenders to have money to pay investors in an event the borrower starts missing payment that would relieve the pressure on investors, and give the lender time to reshape the terms of the falling subprime mortgages.

Johnson believes that in order to prevent crisis brought by foreclosures, the best course to take is fortifying the loan services industry.

Many of the home mortgages did not stick with original lenders, but were bought out by global investors and made into tiny fractions of mortgage backed securities. Then the monthly payments were collected by loan servicers that were contracted by investors.

With $1 billion coming from the federal government, Johnson believes he could collect another $7 billion from the private sector. As part of the plan to end foreclosure properties, he would establish a new Homeowners First Bank to take care of forwarding the money to lenders.

Homeowners First would give 5 percent on government preferred shares, and 75 of the total net earnings would go to retiring those preferred shares.

In his calculation, his plan could modify 200,000 mortgages a year if it were approved. But as of now, he does not see anyone making a way to prevent foreclosures.

A group of large banks and Hope Now Alliance have worked with 1.7 million in the first three quarters of 2008 and are making an effort to abate foreclosures by helping 225,000 borrowers in October.

According to head of the Treasury Department’s Office of the Comptroller of Currency nearly half of the borrowers missed their payments again six months after they modified their loan term, an event that only proves Johnson’s statement that no one is acting to deter foreclosures.

Related Posts:

Growing Number of Foreclosures Spoil Holiday Season 

Filed under:Foreclosure Rates onThursday, December 11th, 2008 | No Comments

State and local officials released their list of 10 lenders, all carrying national names, who have recorded starts and auctions associated with foreclosure homes for the month of October and November in the New York metropolitan area.

Sen. Jeff Klein reported that Long Island filed 1,211 foreclosures and seven lenders with a majority of foreclosures properties in the metropolitan area have taken no less than $122 billion up to the present moment from the $700 billion federal rescue from financial difficulties.

Kleins report, all of the names in the list, which he labeled “Subprime Scrooges”, are accounted for nearly 5,000 foreclosures a couple of months ago. He emphasized that they are not determined to make the proper attempt to reshape mortgages and impede foreclosure homes.

US Bancorp tops the list on Long Island with a reported 204 foreclosures-related filings.
According to Lisa Clark, assistant vice president for media relation of the bank, their role is just a trustee working for investors who bought these mortgages. She clearly outlined their position that they have nothing to do with foreclosures and as a trustee they only take care of the paperwork.

Klein is making a move to put forward the proposals intended for borrowers having trouble with their loans and permitting municipalities to resolve foreclosure properties and send a statement to lenders or their owner. One of his proposals is comparable to a government program and demands the State of New York Mortgage Agency to provide new financing for borrowers with troubled loans and share in part of the properties subsequent appreciation.

To be considered in refinancing, the value of the property must be higher than the mortgage owed and homeowners should not have bad credit, said the owner of RJB Financing Consultant, a mortgage broker based in Farmingdale.

In front of foreclosures, numerous homeowners are inquiring lenders and mortgage brokers regarding new financing as a result of dropping mortgage rate after the announcement of the federal government that it would buy up to $600 billion in troubled loans and mortgage subsidized securities.

Related Posts:

Page 1 of 512345»