MacArthur Foundation aims to reduce the number of vacant properties to alleviate the housing crisis in Chicago. It hopes that its investment will attract additional $500 million funds from other sources willing to help address the foreclosure problem.

The foundation plans to help about 10,000 households and to counsel an average of 6,000 borrowers. It hopes to prevent foreclosures on 2,700 homes by 2010.

The bulk of the money will be given to eight neighborhoods under the MacArthur Foundation’s New Communities Program. Under the program, the foundation has spent $150 million for the rejuvenation of 16 neighborhoods.

Jonathan Fanton, president of MacArthur Foundation, said that the home crisis in Chicago is threatening to eradicate progress in communities. He cited results of the foundation’s 2006 community vitality index, which showed improvement in almost half of the communities in the New Communities Program.

Michelle Collins, Shorebank’s senior vice president, mortgage lending, welcomes MacArthur Foundation’s help which he claims is a big start in solving the housing market crisis in Chicago. MacArthur Foundation is set to give ShoreBank $15 million.

Another recipient of the grant money from MacArthur Foundation, Neighborhood Housing Services, noted that the investment had boost its outreach services and counselling.

Neighborhood Housing’s home ownership services director Mike Vanzalingen said that the organization was able to save about 300 homes from foreclosure in 2007. He adds that the organization plans to use MacArthur Foundation’s grant to save about 600 to 800 homeowners in 2008 and 2009.

Molly Sullivan, Chicago’s director of housing department, believes that MacArthur Foundation’s goal to alleviate the housing problem in the city is achievable.

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.

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.

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.

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
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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
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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

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:

• Fort Wayne IN Foreclosures
• Lafayette IN Foreclosures
• Indianapolis IN Foreclosures

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.

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.