A foreclosed two-family house on Lenox Street was appraised by the city’s tax assessors at $442,800, but it was later sold for only $200,000.

A foreclosed apartment complex on Dewey Street was sold for $197,500 after it was earlier appraised by the city at $308,000.

There are many other cases where the tax assessments were much higher than the actual sales prices. A single-family house was sold for $119,500 after being appraised at $159,200. A two-family house was sold for $269,000 after being appraised at $309,600. A single-family house was sold for $122,000 after being valuated at $222,800. Another single-family house was sold for $165,000 after being appraised at $199,500. A three-family house was sold for $100,000 after being valuated at $246,500.

In many similar instances, houses have been sold for around 10 to 20 percent less than the current tax assessments made by city assessors.

Last year, total tax assessments for properties across Worcester dropped by 4.63 percent, the first decrease in 12 years, according to Robert J. Allard who was then the city assessor. That time, he expressed concern that the slowdown in Worcester economy and the continued foreclosure filings were pushing down property values. He also predicted that the slide in property values could continue for several years.

In the meantime, homeowners who are expecting lower property tax payments for 2009 because of the sharp decline in home values could be surprised when their tax bills arrive because their tax payments may have increased instead or just remained the same as last year.

One significant problem in comparing tax assessments and home values is the tax assessment lag. Under state law, all tax assessments are set as of January 1 of every year. Tax assessments this year are based on tax valuations set as of January 1 last year. It is not surprising then that the difference between current home values and tax assessments are substantial, in addition to the value reduction effects of foreclosure properties.

Tax assessments set as of January 1 this year will only begin to be applied in the fiscal third quarter of 2010. Homeowners will see these assessments in December this year when the city sends its tax bills to taxpayers for fiscal 2010.

Commercial banks in the state reported a total loss of $67 million during the second quarter this year. In contrast, these banks gained a total of $152 million during the second quarter of 2008.

Savings and loans institutions however posted profits in the second quarter. They earned $11 million, which is a big contrast to their $8 million loss in the second quarter of last year.

As the number of foreclosures continued to put pressure on the financial sector, banks in Missouri made 1.27-percent write-offs on loans and leases in the second quarter. This marked a 0.62 percent from the total write-offs in the second quarter of 2008. The percentage of delinquent loans rose to 2.7 percent, so they also stepped up their reserves for future losses in bad loans, allocating a total of $395 million.

Despite the profits posted by thrifts, they also stepped up their write-offs for bad loans and leases, writing off 1.98 percent. This marked a rise from the 0.64 percent in the same quarter of 2008. They reported 3.7 percent of their total assets as nonperforming and allocated $185.3 million for their reserves for delinquent loan losses. Their loan loss reserves one year ago were only $75 million.

Of the 321 total of commercial banks in the state in the second quarter, 22 percent posted losses, a significant increase from the 14 percent in the second quarter last year. The percentage of commercial banks posting increased profits dropped to 30 percent, a sharp decrease from 45 percent one year ago and nearly 34 percent in the first quarter. A total of six banks closed over the year.

Of the 28 Missouri thrift institutions, 25 percent reported losses in the second quarter this year, a rise from the 20 percent in the same quarter last year. In contrast, the percentage of thrift institutions which posted increased profits rose to 46 percent compared to 43 percent during the second quarter of 2008. Two thrifts closed their operations over the year.

On a positive note, Missouri commercial banks and thrifts increased their deposits, with commercial banks increasing their deposits to $117.6 billion from $109.7 billion in last year’s second quarter. Thrifts meanwhile increased their deposits to $9.3 billion, a stunning increase of 66 percent.

Some analysts are commenting that the banks are again doing the very things that contributed to the collapse of the housing and mortgage markets.

But Herbert Kaufman, economics professor at the Arizona State University, said that the strategy could help eliminate huge amounts of mortgages in banking portfolios that are preventing them from making new loans to homebuyers and businesses.

Kaufman admitted that the packaging of commercial and residential loans into securities during the housing boom prompted the provision of residential loans to ineligible borrowers and the provision of commercial loans to purchase overpriced buildings.

But now the repackaging is done in ways different from what was done during the boom. Besides investors now know what they are getting into and what happens if their investments fail.

Now mortgages are packaged in combinations of excellent mortgages and not-quite-excellent mortgages so that the bonds could get AAA ratings. The bond deals are also sweetened with the guarantee that safe investors will get paid first before the risk-taking investors.

The riskiest mortgages are packaged in securities that are sold cheaply to investors who are willing to take high levels of risk but a chance of huge returns.

This strategy of packaging mortgages according to their risk levels enables investment banks to lessen their losses and increase their chances of strong returns.

Wall Street executives like Sue Allon of Allonhill and Brian Bowes of Hexagon Securities explained the repackaging as a great solution to the mortgage problem blocking the recovery of the lending market. They are now calling the strategy as resecuritization of real property mortgage investment conduits.

However, there are still high levels of risks involved, according to several financial analysts. One is the uncertainty related to the direction of the housing market. Some say the market has bottomed out; others say more residential and commercial foreclosures are still to come and push down prices further down.

Another is the role of rating agencies, which failed to determine the risk of securities backed by subprime mortgages during the boom. The uncertainty about the real value of the mortgages comprising the mortgage-backed securities is also a huge risk, according to Gabe Poggi of FBR Capital Markets.

Nonetheless, Wall Street financial executives are hopeful that this time they got it right.

Unlike other types of potential home buyers who need to sell their homes before they can move up or buy another house, first-time home buyers have all the factors in their favor.

Analysts said first-time home buyers just need to analyze two things: if they have cash for down payment and closing costs and if their employment is relatively stable.

If they get a loan insured by the Federal Housing Administration, they just need to come up with 3.5 percent of the home price while if they get a conventional home loan, they need to prepare about 20 percent of the home price.

Economist Hank Fishkind added that although the growth of foreclosure property listings have slowed down a bit, their volumes are still pushing down home prices.

Throughout Central Florida, the median price for pre-owned homes including properties in foreclosure property listings has declined by approximately 30 percent to below $200,000 compared to last year.

Home prices have gone back to their low levels in 2004. For new homes, prices have fallen by around 20 percent compared to their peak prices in 2006. Based on real estate sales data, prices for new home have gone down to just above $300,000.

Home affordability has never been as enticing as it is now, according to financial planners. A first-time homebuyer earning $34,947 in the first months of 2008 had only three-fourths of the earnings required to afford an affordable home, which was priced at $188,275 in 2008.

In the first months of this year, a first-time home buyer earning $35,334 in median income had nearly 100 percent of total income level required to buy an affordable home, which was priced at $141,971 in the last months of 2008. Foreclosure property listings have pushed down the prices of new homes and other existing homes considerably.

Aside from the low prices of properties in foreclosure property listings and low mortgage rates, first-time homebuyers can also make use of the federal tax incentive and other kinds of assistance provided by the state to first-time homebuyers.

The foreclosed property study analyzed more than 5,000 mortgages of homes that were added to foreclosure inventories from 2007 to 2008.

The researchers found out those most foreclosed property units are located in the East Side of Buffalo and its surrounding areas and that most foreclosures were caused by subprime lending and predatory lending.

Lead researcher Kathleen Lynch said that the major objective of the foreclosed property study is to determine the real number and factors of foreclosures in the area and to inform local officials about the findings. The results of the study would help officials craft measures to prevent future mortgage and housing problems.

According to the study, 1 in 3 subprime borrowers in high-cost communities lost their homes to foreclosure from 2007 to 2008 and many foreclosed property units came from mortgages provided in the past three years.

Lynch contended that mortgage lenders and other financial institutions took advantage of the weaknesses of subprime borrowers and imposed predatory interest rates that reached 20 percent. She explained that home loans with predatory rates are destined for foreclosure because most borrowers would not be able to sustain payments for high-rate loans even during good times.

In Erie County, out of the more than 2,700 lis pendens filed in 2007, nearly 36 percent went on to foreclosure. Most homeowners during that time were not able to save their properties from foreclosure because of lack of foreclosure prevention assistance.

However, despite the impact of subprime lending, the pace of foreclosure in the Buffalo-Niagara area is not as fast as in other New York regions. In April, the region has a 0.87 foreclosure rate, much lower than the 1.69 statewide foreclosure rate.

The areas with high foreclosure rates compared to other Buffalo-Niagara areas are Niagara Falls, Buffalo and Jamestown, whose foreclosure rates in April surpassed 2.9 percent. Areas in Wheatfield and LaSalle had moderate foreclosure rates ranging from 0.8 percent to 1.3 percent.

Statewide, New York is 37th in a ranking of states based on foreclosure rates in May. One housing unit out of every 1,646 units was hit with a foreclosure action. Nearly 4,900 residential properties received foreclosure filings, with 538 units already added by lenders to their foreclosed property inventories.

The economists, led by Keith Schwer, said that economic recovery is more difficult to work out in Southern Nevada because of its complete dependence on tourism, which is consumer-based.

As consumers and tourists stayed away because of the recession, tourism-based enterprises collapsed, cutting jobs and causing large numbers of repossessed houses.

Schwer further explained that the economy of Southern Nevada depends on discretionary spending, which is the type of spending immediately cut off by people in times of financial difficulties. He also warned residents of Southern Nevada to prepare for further economic difficulties and further increases in numbers of repossessed houses.

The Nevada economists contended that the economic recovery of the state would depend on both the recovery of the global economy and the nation’s economy.

The economists also predicted that construction in the state will remain slow, causing more unemployed workers and more repossessed houses. They said the housing market slump could continue up to 2011 unless the population of Nevada grows by a significant percentage.

Hospitality and leisure enterprises will offer low-cost room and entertainment packages to attract more visitors, but the resulting increase in revenues would not be adequate to prop up overall corporate and government incomes.

Additional jobs will be created as new hospitality enterprises are opened, but workers would still limit their spending especially for discretionary expense items such as travel and leisure.

In May, the unemployment rate in Nevada reached a staggering 11.3 percent, the highest level in Nevada’s history.

In the same month, in a nationwide survey of foreclosures across the country, Nevada topped a ranking of states according to foreclosure rates. One housing unit out of every 64 housing units in the state got a foreclosure action, more than six-fold the national foreclosure rate of one unit for every 398 housing units.

A total of 17,157 housing units in the state received foreclosure filings, third in a ranking of states according to number of foreclosures, after California and Florida. A staggering 23-percent rise in bank-owned repossessed houses contributed to the increased pace of Nevada’s foreclosure activity in May.

Of the more than 17,000 residential properties with foreclosure filings in May, more than 3,000 units were already listed by lenders as bank-owned repossessed houses.

The new legislation focuses on monitoring the activities of third-party private repo property prevention enterprises and making sure that they provide the services they are getting paid for. It would require repo property prevention companies to provide written contracts to homeowners and to restrict them from charging fees upfront.

City supervisors Sophie Maxwell and David Campos, together with city attorney Kamala Harris city assessor and city assessor Phil Ting, crafted the legislation because of the rising number of mortgage fraud complaints, particularly among minorities and low-income communities.

Ting and Campos also explained that the legislation would require foreclosure prevention companies to reduce borrowers’ monthly home loan payments by a minimum of 20 percent or to reduce overall monthly housing payments to 31 percent of borrowers’ monthly gross earnings or to a lower percentage. These monthly reductions should be implemented for at least five years.

Campos and Ting said that most distressed homeowners grab opportunities that give them hope to save their houses from getting included in repo property lists without making sure that these offers of help are effective or legitimate.

The city officials mentioned that mortgage delinquencies in San Francisco increased by more than twofold in the two-year period from 2006 and 2008 and that foreclosures increased by a staggering 700 percent. They said that the most affected communities are in the southeastern and southern parts of San Francisco.

Harris explained that the proposed penalties for people breaking the ordinance include a $1,000 penalty for each offense, imprisonment of up to 6 months and filing of a civil case to seek damages.

The city officials added that the penalties will send a strong message to third-party foreclosure prevention enterprises victimizing hardworking homeowners.

One example of a homeowner victimized by two opportunistic third-party enterprises is a breadwinner who missed his monthly loan payments when he was laid off. He said he looked for a third party to help him because his lender refused to work out a loan modification for him.

This homeowner said he paid the third party upfront but the third party disappeared when the loan modification resulted in higher monthly payments instead of lower payments.

According to city officials, there are San Francisco-based nonprofit counseling agencies that can help homeowners in danger of losing their houses to repo property inventories.

Learn how to find foreclosure listings.

Homeowners have flooded county and city offices across the country to file their tax appeals and to beat the filing deadline.

Not only owners of small houses have filed tax appeals, but also owners of estates worth millions and owners of properties in high-tax neighborhoods in New York and states battered by foreclosure auction prices such as Florida, California and Arizona.

In Contra Costa, California and in other counties, homeowners are asking why their real estate tax assessments have gone up when their home values have fallen to their lowest levels.

The tax appeals will further cut down local funding, according to local officials. With falling tax revenues, local governments would not be able to deliver basic services to residents.

Jacqueline Byers, research director of the National Association of Counties, said that 76 percent of the larger counties across the nation were having difficulties meeting their financial obligations because of significantly falling property values due to bargain foreclosure auction prices.

Aside from falling tax revenues, the rising number of jobless residents, business losses and the decline in consumer spending have cut down taxes from sales, business profits and personal income.

The financial difficulties of states have also been reducing their financial support to counties and cities. According to Byers, many counties have planned to increase residential property tax rates by 10 percent to meet their budgets.

Some counties that cannot meet financial obligations even with increased tax revenues have laid off more workers, frozen salaries, renegotiated labor contracts or cut services.

As tax appeals have increased, local governments are losing from the reductions and from the cost of reassessments.

Aside from the decline in residential values due to low foreclosure auction prices, counties and cities are also suffering from the declining values of commercial properties.

Because property taxes are imposed by various local government levels, such as counties, cities, towns, school districts and fire districts and because tax computations vary widely, declines in property values do not automatically mean a decrease in residential real estate property taxes.

The state of New Jersey, which charges the highest rate in property taxes in the U.S., has received large numbers of tax appeals from owners of high-priced homes despite their decline in value due to low foreclosure auction prices.

Learn how to find foreclosures across US territory

Market data showed that out of 185 REO properties for sale, only about 53 sales for a total of $17.7 billion were completed since last year.

And the worst sales rate was posted in retail wherein only 13 out of the 71 properties on sale were escrowed for an estimated $143 million or $198-per-square-foot.

Meanwhile, hotel sales provided a positive note on an otherwise lackluster commercial real estate market, with 13 properties out of 16 sold since last year or an average price of $256,854 per-square-foot. The total sales volume for the whole deal was estimated at $17.2 billion.

On the other hand, disappointing sales were posted at the office and industrial building market, with only nine properties sold out of 29 REO properties for sale, for an average price of $227,000 per square-foot. Additionally, eight out of the 38 industrial buildings on the market have been sold with an average price of $109 per-square-foot.

Most potential buyers are adopting a wait-and-see-attitude when it comes to purchasing commercial real estate properties. They prefer to wait for the market prices to drop before jumping into the bandwagon.

Industry experts are expecting sharp decline in prices once a flood of commercial foreclosures are release on the market in the months to come.

The hesitancy of prospective buyers to jump into the current commercial real estate market is evident in the case of the 5.3-acre former Klondike Casino property in Las Vegas, Nevada. The property was initially offered on the market for $8 million. However, lack of interested buyers forced owners to remove the price and to consider all sales offers.

Restrepo Consulting Group consultant John Restrepo pointed out that some buyers purchased commercial properties before they go into foreclosures for just 40 centavos on the dollar or much less.

Many commercial properties across the country are on the precipice of becoming REO properties for sale because of the worsening economy which resulted to decline in rents and values, indicating that they are worth more than their total debt.

Search foreclosed homes across USA.

The good news is that the pace of homeowners who have re-defaulted after having been helped by Citigroup also declined.

Loan modifications refer to changes in the mortgage terms such as reduction in interest rates. Loss mitigations refer to all other revisions done on a mortgage, such as short sales and extension of payments of arrears.

In last year’s fourth quarter, the bank’s loss mitigations increased by 33 percent compared to the third quarter.

Citigroup said the decline in loss mitigation activities in the first quarter is largely attributed to the relatively high number of payment deferment processes offered to borrowers during the holidays. The bank said it offered more payment extensions than usual during the past holiday season under its efforts to reduce repo property inventories.

Compared to last year’s first quarter, loss mitigations increased by 43 percent. Mitigations increased by 6 percent in the case of homeowners with FICO ratings above 660, but decreased in the case of homeowners with low FICO ratings.

Loan modifications continued to increase in the first quarter compared to last year’s first quarter, although lower than the number of modifications in the previous quarter. Citigroup said the 23-percent increase in loan modifications indicate the bank’s commitment to pursue its program of cutting down the number of homes added to repo property inventories.

The bank also explained that there is a significant reduction in foreclosures being processed and foreclosures completed because of foreclosure moratoriums imposed by several states and federal agencies.

Citigroup reported that nearly 8 percent of mortgage loans it has modified during last year’s fourth quarter later became delinquent by two months or more while a little over 2 percent later became delinquent by two months or more, the lowest levels reached since Citigroup started monitoring its mortgage modifications under its program of slashing repo property inventories.

Citigroup also reported that there were borrowers who defaulted in the third quarter, more than 6 months after they successfully modified their loans. The pace of this re-default however remained unchanged in the first quarter.

Citigroup reiterated its commitment to continue its program of reducing repo property inventories, although it expressed uncertainties about the rate of foreclosure filings in the next couple of years.