Local Government Gives Hope to Constituents Facing Home Foreclosure
17 November 2008For quite a few Lansing City residents, it is either the devil or the deep blue sea. The economic crisis has affected wage earners, putting them in danger of eviction. Even those who can pay the rent face a similar crisis as landlords are losing properties to foreclosure.
The housing crisis is a national problem. Foreclosed homes risk becoming abandoned, and attract trouble, while those whose homes have been foreclosed are pushed to homelessness. With a 9.3 percent rate; Lansing ranks 9th in Michigan’s list of areas with the highest foreclosures. In Ingham County alone, 834 homes were repossessed in this year’s third quarter. The figure shows a 4.2 increase from the 2007 third quarter period.
This is why residents were happy to hear that the city plans to infuse nearly $6 million dollars of a government grant towards alleviating the housing problem.
The multi-million funding was given by the U.S. Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program, and was part of HUD’s one-time grant of $3.9 billion dollars distributed nationwide. Twenty three stabilization grants totaling 263.6 million were also apportioned to Michigan. The bulk, $98.7 million, is going to the state which may distribute the money to its various communities, aside from HUD grant.
The aid may not do anything for families heading towards foreclosure, but a part of it will be used to help renters. Another portion of the funds distributed by the program is supposed to go either to property redevelopment or acquisition for resale, or acquisition and demolition.
City Mayor Virg Bernero has organized a task force to come up with a budget proposal to help eight crucial areas which include Oak Park, Baker Donora, Urbandale, and portions in the north and southwest areas. Bernero himself has already proposed a $1.5 Million allocation for providing homes for the homeless. A center to facilitate counseling services in housing issues is also in the works.
Lansing residents may attend two upcoming meetings to review the city’s plan. Bernero also urges homeowners facing foreclosure to telephone the confidential community referral service at 211.
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Obama Proposes Moratorium on Foreclosures
14 November 2008While Senator John McCain is urging the government to buy bad home loans, inadvertently making taxpayers pay for the difference between these and the homes’ new values, Barack Obama is proposing a 90-day foreclosure freeze and encouraging the Treasury Department to work with various government agencies to help families in danger of losing their homes to foreclosure.
Obama’s proposal would allot $10 billion as a safeguard against foreclosures and an $800 mortgage tax credit per year for homeowners who fail to itemize their deductions. The plan would allow the Bankruptcy Court to alter mortgages on primary residences, a proposition which past bills have been unsuccessfully pushing for in Congress.
Dean Baker of the Center for Economic and Policy Research, says that government should change the law, allowing judges of the Bankruptcy Court to adjust primary residences’ mortgages and terms of homeowners’ other debts.
Last October, Congress invested $300 billion in Bush’s unsuccessful housing program under the FHA, the Hope for Homeowners. The program encourages homeowners to apply for refinancing of their unsettled mortgages. In its first year, 13,300 homeowners will have been helped, a far cry from the targeted 400,000 homeowners in over a three-year period.
Since then, new programs have been proposed to the Treasury Department by large lenders such as JP Morgan Chase and the Bank of America. Reports that a mortgage-industry plan is being considered by the Bush administration have yet to be confirmed.
As expected, Democrats have been largely in favor of Obama’s proposal, but experts are hardly enthusiastic. According to bankers and mortgage trade groups, the plan would destabilize the market and would benefit only a minority. They say that tax credit would only help people who have already been homeowners for years. Baker himself adds that the government should help out those who are struggling to pay their mortgages, rather than those who are not.
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Rising Foreclosures Give New Meaning to the Term “Underwater”
13 November 2008Sudden declines in home prices face the real estate industry, as a by-product of the increase in the number of foreclosure homes flooding the market. Prices have dropped tremendously, and in some cases down to half of what existing homes are originally worth. This resulted to an increase of “underwater” homeowners, or those whose mortgage balances are now higher than what their homes are currently worth.
Being underwater is one of the imminent signs for foreclosures. However, some experts say that it does not necessarily mean that homeowners will default on their mortgage payments and their homes ending up in foreclosure. Although this may not be a national trend, it was proven true for some states that previously encountered a similar increase in underwater homeowners. Studies conducted on 1991 on more than 100,000 Massachusetts-based underwater homeowners showed only 6.4% fell short and lost their homes.
Homeowners that did not lose their homes to foreclosures simply did not give up paying for their mortgage loans, relying on hopes that home prices would eventually recover and the value of their homes brought back to normal. Those who lost their homes were either entirely incapable of paying for their loan amortizations, or just stopped paying their installments seeing that there is no hope for recovery in the value of their homes.
With the number of unemployment cases in the rise and the economy still in shambles, economists project that approximately 8% of underwater homeowners can lose their homes to foreclosures in the couple of years to come. These concerns prompted federal officials to formulate new recovery programs for these beleaguered homeowners. Some banks and financial institutions are also offering new mortgage terms for these desperate homeowners.
Some experts advise underwater homeowners to continue making their loan payments and try to avoid ending up with a foreclosed homes. Homeowners with low-interest fixed-rate loans are encouraged to stick with reducing their mortgage while making these payments.
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California’s Schwarzenegger Proposes a 90-Day Suspension of Foreclosures
12 November 2008Schwarzenegger has presented his foreclosure moratorium proposal to legislators in the first week of November, including his proposals to increase taxes and reduce expenditures in order to reduce the state’s budget deficit of $11 billion.
The governor explained that two of the more effective ways to stimulate California’s economy are to make the housing market stable and attractive to investors and to arrest the rapidly soaring number of foreclosed homes. According to research company MDA DataQuick, almost 80,000 houses were foreclosed within the period from July to September in California.
Schwarzenegger’s foreclosure suspension proposal has been criticized by some economists due to possible adverse economic consequences, but Schwarzenegger argued that the state needs to rescue its troubled homeowners.
The case of National Guard serviceman Sammy Montiel illustrates what many Californians have been going through since the mortgage crisis began. Montiel purchased his Southern California home before he flew to Iraq in March this year. He said that he had been honest with the lender about his financial situation, but the lender still encouraged him to take the home loan.
When he came back after six months, his active-duty salary was discontinued, making him unable to pay his monthly amortizations. His wife’s savings have also been wiped out. Making the situation worse is the sharp decline in home prices, eliminating the option of selling the house to save the mortgage.
The Montiels say that all around them are neighbors who have left their foreclosed houses and people conducting foreclosure procedures and short sales.
One of the economists opposing Schwarzenegger’s moratorium proposal is University of San Diego professor Norm Miller. Miller says that the governor’s plan will only delay the needed correction that allows the housing market to recover. He also says that the planned reduction of interest rates on current mortgage contracts will make California mortgages unattractive to buyers and investors.
Search for Foreclosures by California Top Cities:
- Los Angeles CA Foreclosures
- San Diego CA Foreclosures
- San Jose CA Foreclosures
- Stockton CA Foreclosures
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U.S. Federal Funds to Help Repair Florida’s Foreclosed Properties
11 November 2008The U.S. Housing and Urban Development (HUD) will provide over $140 million in federal funds, under the Neighborhood Stabilization program, to help repair foreclosed homes in South Florida cities and counties. The program aims to repair neglected real properties which contributed to the decline of home market prices and the state’s economy.
South Florida cities and counties are finalizing plans on how best to spend over $140 million federal funds to alleviate the area’s housing market crisis. Local governments are expected to identify and buy and repair neglected homes and award grants to qualified first-time home buyers.
Marty Larsen, who helps in the redevelopment of several cities in South Florida, explains to Carey Codd, a CBS4 reporter, that the federal funds will be used to eliminate vacant homes that have been foreclosed and improve living conditions in neighborhoods. He believes that in the long run, the HUD housing aid program will benefit South Florida’s local municipalities.
Larsen observes that several properties that have been vacant showed damaged appliances, uncollected trash, stagnant water in pools, structural problems, uncut grass and broken fences. He explains that construction workers will be hired to repair homes to attract potential homebuyers.
Although he believes that federal funds will not solve the current market problems, he hopes that the funding program will make a difference in reducing the number of vacant properties to improve market values and create environmentally-friendly homes.
Larsen elaborates that vacant properties are not good to the property market and to Florida’s goal of alleviating the crisis and having safe neighborhoods.
Meanwhile, David Rosa, a resident of Miramar, Florida, claims that there are two abandoned houses near where he lives. He believes that if these foreclosed homes can be repaired and sold, it would significantly improve the neighbourhood and increase property market values.
Search for Foreclosed Properties by Florida Top Cities
- Miami Foreclosed Properties
- Jacksonville Foreclosed Properties
- Fort Lauderdale Foreclosed Properties
- Orlando Foreclosed Properties
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A State Warning on Foreclosure Rescue Scams
10 November 2008The issue of foreclosed homes is a widespread problem in Miami, from the southern areas of Miami-Dade County to the areas of Northern Broward County.
According to lawmakers, once families are not able to make payments, they step out of their homes, the homeless move in, and the neighborhood crime climb up. More robberies, burglaries, and personal assaults are reported according to Coral Spring’s vice mayor.
Since homeowners are desperate not to lose their homes, they tend to say yes to foreclosure rescue loans they cannot really afford.
Having seen the problem on foreclosures getting worse, the state of Florida decides to step in to help, attacking the problem at its roots.
As a move, the governor has released a new law, which is the Foreclosure Rescue Fraud Prevention Act. This draws barriers between troubled homeowners and the people taking advantage of their situation, by coming up with payment plans. Oftentimes, such deals are said to be too good to be true.
One of the provisions of the new law is requiring rescue consultants to supply a contract with a grace period of three days. Furthermore, what should be contained in the contract are disclosures that advise the borrowers to contact their mortgage companies prior to closing any deals with anyone.
What the state actually points out is putting up a lot of safeguards making them impossible to sign contracts and hold them responsible if they are not able to do all the steps involved.
Rescue consultants often seem to have genuine intentions as they help desperate homeowners save their houses. However, there are some who just take advantage of the homeowner’s situation so it is advisable to be extra careful in dealing with such people.
The initiative shown by the governor of Florida is a commendable one since it is a good move in keeping homeowners away from foreclosure rescue scams.
Search for Foreclosed Homes by Florida Top Cities:
- Fort Lauderdale Foreclosed Homes
- Jacksonville Foreclosed Homes
- Miami Foreclosed Homes
- Orlando Foreclosed Homes
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Arson, Sentence, Divorce…Do Foreclosures Really Lead To These?
8 November 2008Homeowners will really do anything to prevent foreclosure of their homes, even setting their own houses on fire.
One of the cases of arson that had something to do with foreclosure prevention was that of Kevin J. Griffin from Dayton Avenue. He pled guilty this October after admitting setting his home on fire back in April.
Court documents stated that Griffin was sentenced by Allen Superior Judge Fran Gull with imprisonment for eight years and two more years on probation. He was also charged with $20,477 to pay in return for the damages.
Griffin used to live with his wife in their one-story house. When the firemen responded to their burning house last April 15, they have found the fire centered somewhere near the fireplace in their living room.
The couple was home during that time. According to the story of Griffin’s wife, she awoke because of the smoke she smelled at about one in the morning. With this, she woke her husband, and they went both went out of their house. However, Griffin got back in to save their pets.
It was also stated in the court documents that a few days after the fire incident, Griffin’s wife made a call to their mortgage company to check on their house insurance. She discovered that their house was already in foreclosure because they were not able to make mortgage payments for twenty months. Apparently, it was Griffin’s duty to pay the bills but he never informed her about missing the payments.
In fact, due to the foreclosure, the house should have been sold by April 17. And because of this whole trouble, Griffin’s wife decided to file for divorce last June.
With such a story, it could be said that a foreclosure could indeed lead to a charge of arson, jail sentence and a divorce.
Search for Indiana Foreclosure Homes by Top Cities:
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New Law Reduces Los Angeles Foreclosures by 50%
7 November 2008If you are wondering whether or not mortgage lenders have been helping homeowners stay in their homes and avoid foreclosure, you might get your answer from the most recent foreclosure data for Los Angeles. Foreclosure rate dropped for the month of October after a state law was passed last July requiring lenders to notify their borrowers and wait 30 days before filing for foreclosure.
Obviously, the new law has given troubled borrowers more breathing space. At least, they can try exploring options with their lenders in order to prevent foreclosure. But just like other laws, there seem to be some loopholes. For instance, the state law does not require the lender to show evidence of the foreclosure alternatives being considered. All they are required to show is proof that they have contacted the lender and informed them of their mortgage default.
For most critics, the state law merely delays the entire foreclosure process and does not really provide a solution for these homeowners facing foreclosure. Because of this, analysts are actually expecting for the city’s foreclosure rate to rise once again for the month of November.
Sadly, the distressed homeowners will only be gaining a couple of weeks’ respite from the idea of being homeless. In the same way, the local housing market will just enjoy a momentary dip in the inventory of affordable homes.
What Los Angeles really needs is a state law that will provide homeowners facing foreclosure with real assistance in the form of foreclosure counseling. In addition, lenders should also be required to negotiate loan modification with their borrowers in order to finally make a dent on the housing crisis.
If not, Los Angeles and California will find itself with more foreclosure homes piling up and more families left homeless because of this housing mess.
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More States Are Launching Programs to Prevent Foreclosures
7 November 2008To avert the potentially disastrous situation of millions of Americans with foreclosed homes, 31 states have introduced various programs to help borrowers keep their homes and to prevent mortgage firms from imposing high interest rates on mortgage loans, as described in a publication by Pew Charitable Trusts.
The report, which was featured in Realtor Magazine, also highlighted the number of states which have introduced regulations against predatory loans and number of states which launched programs to avert foreclosures.
The report also said that the states have opened hotlines to facilitate communication with troubled borrowers and have established loan funds for the refinancing of high-interest mortgage loans.
Various news agencies, including the popular mortgage and housing news site HousingWire, have covered California’s success in its foreclosure prevention programs and its influence on other states. California’s strategies in persuading more mortgage companies and loan servicing firms to help troubled borrowers have obviously succeeded.
As shown in a survey conducted by California’s Department of Corporations, the overall number of borrowers who restructured their mortgage loans has increased while the overall number of foreclosed homes has decreased, compared to data collected in previous months and to mortgage loan figures in 2007.
While states are opening their facilities and resources to help homeowners, federal agencies have also been working to establish mortgage-guarantee programs that will be launched across the country. The financial regulation agencies, Federal Deposit Insurance Corporation (FDIC) and Treasury Department, have been holding discussions to be able to offer guarantees for millions of troubled mortgages.
FDIC chairperson Sheila C. Bair has also called on national legislators to introduce credible strategies to prevent the continued rapid decline of the residential market. She urged them to give special attention to the foreclosure problem and prevent a catastrophic situation of millions of Americans forced out of foreclosed homes.
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Facing Foreclosure? Who to Turn To
6 November 2008Across the country, millions of homeowners have lost or about to lose their homes to foreclosure. Experts believe that a significant percentage of these homeowners failed to find a solution to their mortgage problems in time. Some may have simply decided to ignore their problem while the others do not know where to start.
If you are among the unfortunate individuals facing foreclosure, you should realize that you can turn to several people you can turn to for assistance:
Family and Friends: if you are having some financial difficulties, you should ask your friends or relatives for a personal loan. Just make sure that you keep your end of the bargain so that you can ask for help again in case you found yourself in the same boat.
Lender: despite what you might think, your lender is actually one of the people who could immediately provide you a way to stop foreclosure. Before discussing your mortgage problems with your lender, you should make sure that you have scrutinized your finances. Your lender will certainly appreciate your effort to get your financial life organized.
Foreclosure Counselors: if you are having trouble negotiating with your lender, you can always turn to foreclosure counselors for assistance. Most of them are quite familiar with the various foreclosure alternatives and could explain to you easily what each option involves.
Foreclosure Rescue Companies: there are actually legitimate foreclosure rescue operations that could provide you with the means to stop foreclosure. However, you have to make sure that the company you are dealing with is certified by the Department of Housing and Urban Development. Otherwise, you might find yourself becoming a victim to foreclosure rescue scams.
With all these help, you will soon find yourself free from mortgage problems and enjoying the knowledge that you can stay in your home.
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