On March 8, 2008, Glenn Hills High School in Augusta won the Georgia state basketball championship. It was exactly what the community needed. Like so many areas across the nation, the community has been bogged down with the troubles of the current foreclosure crisis. While the emotional victory (the first in the school's 40 year history) may have been temporarily uplifting, the stain of foreclosure is still very evident in the fabric of the Augusta community.
According to Realtytrac, in 2007, the metro Augusta area had 1,960 properties with foreclosure filings, which shows a rise of 4.53 percent from 2006. According to the Realtytrac rankings of the 100 largest metro areas, if the Augusta-Aiken area were large enough, it's foreclosure rate of .891 percent would be 57th in the nation.
The rising amount of foreclosures have also significantly impacted the housing market. In January 2007, the average length of time to sell a home was 93 days. In January of 2008, the number was up to 97.
According to the Greater Augusta Association of Realtors, the average sale price for homes in the Augusta area was 2.7 percent lower in January than in the same month of 2007. The average sales price for all homes in the Richmond, Columbia, and parts of Aiken, Lincoln, Burke, and McDuffie counties was $135,756 in January of 2007, compared with $132,109 in January of 2008. The list-to-sell ratio (how close the seller came to getting the asking price) was 98 percent in 2007 and 97 percent in 2008.
Also, in January of 2007, homes in the $350,000 - $400,000 price range were on the market the longest, with an average 288 days. In January of 2007, homes in the $30,000 - $40,000 price range were on the market the logest, with an average of 158 days.
Carmen Chubb, Assistant Commissioner for Housing for the Georgia Department of Community Affairs, says, "Nobody knows for sure if we're really at the point of where we've peaked out with the foreclosures. The most reasonable estimate that I've read indicates that we'll continue with this trend through 2009."
Sadly Augusta, is just one example in long line of desperate communities that have been ravaged by the foreclosure crisis. All across our nation, foreclosure are at an all-time high and homeowners are becoming fragments of an already destroyed American dream.
Assistance may be available to some homeowners. Studies show that many foreclosures could be stopped
homeowners would negotiate with their respective mortgage companies. Sadly, dealing with mortgage companies
is more complicated then just giving them a call and asking for assistance. They require an a lot of forms and the
correct paperwork to substantiate your claim before getting any real assistance. This can be time consuming and
frustrating for a once in a life time event.
There is, however, another option. Homeowners may try to inquire of reputable third-party assistance firms to help them negotiate with their mortgage companies. For example, the Lewis Mortgage Foreclosure Assistance Foundation has assisted homeowners with the negotiation process and can act as a go between for the homeowner. Their team of educated and trained professionals has assisted tens of thousands of homeowners to retain their homes. Organizations like Lewis may be the only hope as the darkest days of the foreclosure crisis lie ahead.
For more information, contact the Lewis Mortgage Foreclosure Assistance Foundation at 866-645-8551
March 27, 2008
Augusta Foreclosure
March 22, 2008
March 17, 2008
Homeowners in the Dark
America has a problem. Plainly put, America has a foreclosure problem. Staggering foreclosure rates have severely affected the American economy. Across the country, millions of homeowners have lost their homes due to this devastating crisis. Families are broken up, lives have been altered, and homes are left deserted. America has a big problem.
While the blame for the crisis may be a subject of much debate and conjecture, the important issue that all Americans must focus on is the solution to the problem. In the opinion of this writer, the most vital issue regarding the foreclosure crisis is the education of the homeowner of what they should do. For this once in a life time event, most homeowners facing foreclosure have little knowledge about foreclosure. Homeowner’s have little time to educate homeowners about the sometimes complicated foreclosure process (www.lewisstates.com).
Many homeowners have no idea that contacting the people at the mortgage company that they can actually obtain help. Also, they are left in the dark about possible repayment options and timetables. The saddest truth about foreclosure is that many homeowners could have saved their homes from the process had they been more prepared.
The following is a quick overview that homeowners can use to get helpful information about foreclosure proceedings.
TIMETABLE
30 days – The homeowner is not considered late on the mortgage until they are 30 days past due. At this point the mortgage company will attempt collection calls to cure the deficiency.
60 days –The 60 day mark is when a homeowner is considered to “default” on the mortgage. The mortgage company may offer some more random collection calls and possibly send a letter or two. Remember, they are not obligated to do anything in most states.
90 day – The 90 day mark is the beginning of a very serious time. The Mortgage company will normally send the homeowner a letter that demands that the full amount due be paid or the foreclosure process will begin. Often, the foreclosure process and notification are a simultaneous event, thus the homeowner could be in foreclosure but not know it. Collection efforts by the mortgage company will continue even while the foreclosure process progresses.
Over 90 days – Once the loan is in foreclosure, the mortgage company can schedule an auction date at a time as required by law (www.lewisstates.com). The homeowner has some time to redeem or vacate the premises after the home is auctioned off to the highest bidder, the alternative is being escorted off the premises by local law enforcement.
OPTIONS
Refinance – Unfortunately, the vast majority of homeowners facing foreclosure are not able to refinance their homes. The pending foreclosure has obviously negatively affected the credit of the homeowner that will scare away any mortgage companies interested in refinancing the loan.
File Bankruptcy – In the opinion of a study conducted in Georgia, Bankruptcy should only be considered as the last option possible. Bankruptcy will stays on the homeowners credit for at least seven years and sometimes longer. One study indicated that 70% of homeowners who file bankruptcy to save their homes failed during the first 12 months.
Negotiate –It is possible to negotiate with your mortgage company. Sadly, due to the current volumn of foreclosures, this option has become almost impossible to hurdle without professional assistance or advice. In order for a homeowner to negotiate with the mortgage company, the homeowner must have a working knowledge of foreclosure and real estate proceedings and be able to provide the mortgage company a completed 20 to 40 page workout package containing all the elements necessary for the mortgage company to consider their unique situation.
Get Help – Many times this is the only option that is open to the homeowner. Homeowners must beware of foreclosure predators but be willing to search for help for their problems. Homeowners should not hire anyone who guarantees to specific result. Homeowners should ensure that the company is a member of the Better Business Bureau and Dun and Bradstreet. It is helpful if the company has a Reliability Partnership with the Better Business Bureau and has not got any unresolved complaints against them.
Knowing what the mortgage company is looking for and then how to communicate with them is only part of the battle. Once the communicate process has opened up then a homeowner has to know what to say when someone says “no” to their plan. If you are experiencing problems such as these, perhaps the best solution is to hire some advice or counseling on how to proceed.
About the Author: Jacob Cukjati is a knowledgeable foreclosure professional with Lewis Mortgage Foreclosure Assistance Foundation. He is dedicated to providing a valuable resource for homeowners facing foreclosure. You may contact him at his office (251) 923-0235 or e-mail him at jacobcarro@gmail.com
About the Company: Lewis Mortgage Foreclosure Assistance Foundation is non-profit organization based in Lillian, Alabama. They have a team of foreclosure professionals that are dedicated to helping homeowners save their homes. You may contact them at 866-645-8551.
March 11, 2008
The Crippling Foreclosure Crisis
A survey of elected local officials shows that the recent increase in foreclosures has significantly increased vacant properties, homelessness, and crime while decreased city revenue.
The National League of Cities surveyed 211 officials through online and e-mail questionnaires, and 67% of those surveyed reported an increase in foreclosure in their respective cities. 33% reported an increase in vacant properties and decrease of local revenue.
Cynthia McCollum, President of the National League of Cities and Councilwoman of Madison, Alabama said, "There's a reduction in revenues at the same time that more services are needed. Because of foreclosures, people are stealing, crime is on the rise and we don't have more money for cops on the street."
20% of city officials polled reported an increse in homelessness.
When the National League of Cities meets with Congress, the foreclosure crisis will be the main topic of discussion.
James Mitchell, a Charlotte Councilman and head of the National Black Caucus of Local Officials, said, "The American dream for individuals has now become the nightmare for cities."
He reports that there has been an increase in police calls because abandoned properties are targets for vandalism.
Mitchell also claimes that in Peachtree Hills, a Charlotte suberb, 115 of 123 homes are in foreclosure.
He says, "The 12 residents left there can't sell their homes and now their property values have decreased. It's starting to be a symbol of what we don't want to happen to Charlotte."
Many of the homes where sold to African-Americans enticed by zero down mortgages and low priced housing. The survey shows that people of color, single parents, and senior citizens are being disproportiantely affected by the foreclosure crisis.
Even cities that have been spared from the worst of the crisis are experiencing serious ramifications.
The heart of California's Inland Empire, Riverside, ranks 4th nationally in foreclosures. The area attracted people from the costlier coastal area, but the housing boom had little affect on Riverside. However, the communities to the East were more severley affected.
Riverside Mayor Ronald Loveridge says, "It's having a ripple effect on our budget and city finances. Housing industry is not simply building homes. There's less money being spent for new cars. That's had a powerful effect on the economy of our region."
Since the 1978 passage of Proposition 13, which caps real estate taxes, California cities rely heavily on sales tax revenues. Riverside is facing a $12 million defecit this fiscal year.
Loveridge says, "We handle that essentially by not filling positions."
Riverside is adjusting the payment schedule of development fees to encourage construction. Also, it passed an ordinance requiring the upkeep of homes in foreclosure.
The Department of Housing and Urban Development is working with Charlotte on a program that allows teachers, firefighters, and police officers to buy foreclosed homes at 50% of the listed price.
March 3, 2008
One Year Moratorium
President George W. Bush recently announced a 30 day moratorium on foreclosures. Sen. Hillary Clinton has expressed her approval for a 90 day moratorium.
But, recently, two state legislators have been pushing for a 1 year moratorium for the state of New York.
Assemblyman James F. Brennan (Brooklyn, Democrat) and State Senator Frank Padavan (Queens, Republican) have introduced a bill that would call for a statewide year-long halt on foreclosure proceedings.
The proposal gives homeowners the ability to stay in their homes and negotiate with their lenders to ultimately stop the foreclosure action.
This bill has been one of the more extreme proposals dedicated to stopping the foreclosure crisis and may remind many of the moratoriums instituted during the Great Depression of the 1930's.
It was introduced in December and has been gaining momentum steadily. Mr. Brennan claims that it has the support of over 60 assmbly members. A community organization group with more than 60,000 members, New York Acorn, has supported the bill as well.
The moratorium would be the longest such action since Gov. Herbert H. Lehmen instituted a one year moratorium in 1933; the moratorium was renewed every year until 1949.
Bertha Lewis, Executive Director of New York Acorn, says, "Some people say, 'Well, that's too crazy,' we say, 'Look, either we are in a crisis or we're not.' We have to do something in New York State. This crisis is real, just like it was real in 1933 during the Depression."
Mr. Brennan claims that the idea for the moratorium came from a 1934 Supreme Court case that he studied in Brooklyn Law School. The case, Home Building and Loan Association vs. Blaisdell, instituted a Minnesota moratorium.
Mr. Brennan says, "There's nothing wrong with giving people some time to see if better arrangements can be worked out."
New York's Superintendant of Banks, Richard H. Neiman has claimed he would review the proposal.
The Mortage Bankers Association has claimed that the moratorium is sometimes useful but not a long term solution.
After a civil rights group pushed for a national 6 month moratorium, John M. Robbins, Chairman of the Mortgage Bankers Association , said, "Each loan is an individual transaction and situation, one which needs to be addressed individually between the lender and the borrower."
Also, the bill could possibly reduce the lenders power over defaulted homeowners becuase it is thought that lenders will shy away from extending loans to prospective homebuyers. The bill has received the support of State Senators, James S. Alesi of Rochester, Martin J. Golden of Brooklyn, and William J. Larkin Jr. of Newburgh in Hudson Valley.
Mr. Padavan claims that the bill is a "common-sense solution" to national crisis. He says, "This is a freight train coming down the tracks and we're just trying to slow it down so people can deal with the underlying problem."
The bill is one of many proposals to help mitigate a crisis that is espcially harmful in New York.
According to an analysis of housing data by the Furman Center for Real Estate and Urban Policy at New York University, foreclosure filings in New York City for two to four family properites have increased from 3,461 in 2004 to 8,263 in 2007.
Foreclosures for two to four family properties in the Jamaica and Hollis section of Queens have increase from 233 in 2004 to 784 in 2007.
The Center for Responsible Lending predicts that in the near future, 2.26 million homes will endure foreclosure. Michael D. Calhoun, predicent of a congressional subcommittee dedicated to studying foreclosure predicts that in the 16th congressional district (South Bronx) one out of every five subprime loans will go into foreclosure.
Other states are proposing foreclosure moratoriums as well. Gov. Deval Patrick of Massachusetts instituted a case-by-case two month moratorium on qualifying homeowners. Activists in Michigan have been pushing Gov. Jennifer M. Granholm for an astounding five year moratorium.
Supporters are very clear that the proposed moratorium in New York would not be delivered on a case by case basis but would fully apply to all homeowners facing foreclosure. It would start the one year when the lender proves its entitlement to foreclosure and it would end the year with the court allowing the foreclosure proceedings to continue.
The bill calls for the lenders to fairly present the homeowners with viable solutions and repayment plans to continue paying their mortgage.
The homeowners failure to adhere to the repayment plan may institute a lift on the moratorium.
Mr. Padavan said, "This is not a giveaway. We're not paying these people's mortgages for them."
Until this bill has passed, homeowners should seek the help of licensed professionals to mitigate foreclosure plans with mortgage companies.
February 26, 2008
Foreclosure Pets
The number of animals being surrendered to animal shelters is soaring as the US foreclosure crisis grows—some shelters have 35% more animals now than this time last year. As more and more people lose their homes, 100’s of animals are being surrendered. Even worse are the animals just abandoned without out food or water—sometimes left locked inside homes. It’s often the real estate agents and property inspectors who are finding the abandoned animals in horrible conditions and sometimes already dead.
Another outcome from the surge in foreclosures, is fewer new homeowners. Fewer homeowners means there are fewer pet adoptions taking place across the country. There aren’t enough people to adopt the influx of pets.
Sadly, many people facing foreclosure are waiting until the last minute to make plans and many families are having a hard time finding rentals that allow pets, especially medium and large dogs. It is illegal in most states to abandon your animals not to mention barbaric.
The Philadelphia SCPA is waiving fees for surrendering pets due to foreclosures. And the Salem Animal Rescue League in New Hampshire is looking at providing temporary shelter for pets until their families get back on their feet after a foreclosure.(via therealestatebloggers)
The crisis is widespread enough that the Humane Society of the US and the ASPCA have issued statements urging people facing foreclosure to plan for their pets. The HSUS has good tips on how to protect your pets:
Give yourself enough time. If possible, check ads and contact real estate agents and rental agencies at least six weeks before you plan to move or when you first learn that foreclosure and/or eviction may be in your future.
Make use of available resources. Contact the humane society or animal care and control agency serving the area into which you are moving; the agency may be able to provide you with a list of apartment communities that allow pets.
Gather proof that you’re responsible. The more documentation you can provide attesting to your conscientiousness as a pet owner, the more convincing your appeal will be to your future landlord. This can include statements from current property managers and neighbors that you maintain your pet responsibly, as well as copies of veterinary records showing ongoing pet care.
Get it in writing. Once you have permission from a landlord, manager or condominium committee to have a pet, be sure to get it in writing. Comprehensive agreements protect people, property and the pets themselves.
The HSUS also has tips on lowering the costs of keeping your pets:
While buying expensive toys and accessories has become a popular way to demonstrate your attachment to your pet, your pet can be just as happy with less expensive toys or homemade toys. They need your love and attention more than a pricey product. The HSUS has tips for inexpensive toys for both cats and dogs.
Keep your pets safe inside or on a leash while walking outside. Animals allowed to roam freely are more prone to accidents and resulting veterinary bills.
Let your veterinarian know that finances are tight and ask that he or she prescribe only the most vital vaccinations to keep your pet healthy.
Consider pet health insurance to minimize the shock of an expensive bill from the veterinarian in case of an unexpected illness or injury.
This article courtesy of Sarah at Pet Project.
February 5, 2008
Foreclosure Predators
The current foreclosure crisis strikes at the heart of the American economy, the homeowner. Homeowners across the nation are being forced to leave their most prized investments and face financial instability.
As if this was not shameful enough, many homeowners are being defrauded by so-called “Foreclosure Specialists.” In reality, these specialists are small businesses dedicated to preying upon unsuspecting homeowners facing foreclosure. Many of these businesses promise financial stability and the ability to save the homeowners home, but their main focus is to take as much money from the homeowner as possible and leave them still in foreclosure.
Thus, they are commonly referred to as “foreclosure predators.” These companies use emotional instability to guide their prospects into paying them egregious fees for little or no work on behalf of the homeowner. While the homeowners they promise to help are thrown out into the street, they are taking as much money from them as possible. This type of predatory business preys upon many unsuspecting homeowners every year.
Unfortunately, the businesses that do, in fact, help homeowners are becoming tied in with such predators. Not only do the predators hurt their own customers, but they also prevent other reputable companies from actually helping people. The following tips may be helpful in determining if a foreclosure consultation company.
First, a homeowner must be sure that the consultant is a member of the Better Business Bureau. If a consultant dodges this question, they are generally not a reputable company. Also, it will help the company is a Reliability Partner with the BBB. This designation is only given to the highest rated companies within the BBB. This verification shows that the business has never had any unresolved complaints against it. This is a very reliable way to determine the legitimacy of a business.
Also, a homeowner should ensure that the company is a member of Dun & Bradstreet. This financial institution provides valuable commercial information regarding some businesses. If a consultant is a member with D&B, they are most likely among the elite in their industry.
Lastly, do not be concerned with up front fees, but beware of guarantees. Most consultation firms must charge up front fees for the simple reason that once a home is saved, many times the homeowners do not feel the need to pay them. Guarantees, however, are not the mark of a good consultation firm. Reputable firms understand the work that it takes to save a home. Therefore, most do not guarantee anything because it is a risky business. When choosing a consultant, homeowners should choose a firm that conducts an interview to determine whether the homeowner will qualify.
Foreclosure predators will always be attempting to defraud homeowners during perilous times, but with close examination, a homeowner can severely reduce the chances of being caught in a “foreclosure scam.”
This article submitted by Jacob Cukjati
For more information see stopforeclosurecenter.com
January 29, 2008
The Education of the Homeowner
THE EDUCATION OF THE HOMEOWNER
The current foreclosure crisis is affecting millions of homeowners nationwide. Unfortunately, most homeowners are uneducated regarding the foreclosure process in their respective states. It is the duty of the mortgage company to provide the homeowner with all possible information regarding foreclosure; sadly, the mortgage company rarely provides the homeowner with any information.
If the mortgage company refuses to take the time and effort to educate homeowners properly, the duty then falls to the homeowner. Homeowners facing foreclosure must take it upon themselves to learn as much as possible about the state foreclosure laws that apply to their homes. Close examination reveals that the process of foreclosure varies greatly from state to state.
For example, in Nevada, many mortgages allow lenders to sell a property when an owner defaults without filing a legal action. Homeowners in Nevada have been ransacked by that staggering revelation. How many homes in Nevada could have been saved, by taking early action, if homeowners would have been informed?
Also, Texas foreclosures are very fast when compared to other states. It is not uncommon for foreclosures in the state of Texas to be complete in 3 months. In most states, if a homeowner has not paid their mortgage in 3 months, foreclosure is started. In Texas, the home would be sold at auction.
Redemption rights also vary between states. In some states, homeowners have a right to redeem their home after it has been sold at auction. In other states, the owner has no post-auction rights.
It should also be noted that foreclosures may be processed in and out of court. The regulations vary greatly by state. Some foreclosures require lengthy court proceedings. In others, the homeowner may never have to appear in court.
It must be concluded that the education of homeowners should be a primary concern of all involved with the foreclosure process. How many homes could have been saved if a homeowner had been educated? How many homeowners had the power to save their homes but did not due to a lack of information? It is the duty of the homeowner to obtain proper knowledge of all foreclosure proceedings in their respective states, and to respond in accordance to those guidelines to maximize the possibility of a foreclosure being stopped.
Helpful Resources-
Lewisstates.com
Stopforeclosurecenter.com
Nationalforeclosureblog.blogspot.com
Foreclosure-help.bizForeclosure-solutions.biz
January 24, 2008
The Saddest Truth About Foreclosure
Foreclosure is a sad thing. It causes economies to falter. It causes people to lose their homes. It causes families to be destroyed. The affects of foreclosure on a society can damage the lives of millions of people. Foreclosure leaves a path of destruction in its wake. It leaves widows homeless. It leaves families divided. It leaves homeowners in shame.
The tragedies that accompany foreclosure are almost incalculable, but what if there was something worse? What if someone had the power or knowledge to help a homeowner but did not? What if the broken families could have stayed together? What if the widow could have kept their home?
Sadly, this is the situation we are currently facing in America. Mortgage companies have specific departments dedicated to helping homeowners in foreclosure. These departments focus specifically on homeowners who have encountered financial hardship and need assistance from the mortgage company. Every month, these departments help a certain amount of homeowners, and yet thousands of homeowners still lose their homes every day.
The answer is very simple. The mortgage companies do not have the resources to help a significant amount of homeowners. Key departments in the mortgage companies are woefully understaffed, and they are receiving a record amount of homeowners to deal with. The problem lies with the mortgage company.
Now, let us examine closely how a homeowner may go about obtaining the assistance of their mortgage company.
Firstly, the homeowner must get in contact with the mortgage company. Now, this may seem like a very simple task, but an eye-opening study reveals that only 40% of homeowners actually get in contact with the mortgage company while facing foreclosure. This staggering statistic reveals that 60% of homeowners never speak with anyone from their mortgage company during foreclosure.
Now, if a homeowner happens to be one of the fortunate 40% then they have a daunting task to face. The homeowner must convince the mortgage company to send a workout agreement. This agreement is very complex and usually involves about 35-40 pages of financial paperwork. A separate study reveals that only 10% of all homeowners receive a proper workout agreement, indicating that 90% of all homeowners never have a solid financial opportunity to save their home.
The next step is to fill out the workout package perfectly. In fact, this extensive document must be absolutely infallible for the mortgage company to even look at it. If the package is missing any information, not formatted correctly, not in the proper order, or is not completely tailor-made to the mortgage company’s specifications, then it will not be considered for any type of agreement.
Finally, if the homeowner has jumped through all the hoops that the mortgage company has put in front of them, yet another task remains. The homeowner must negotiate with the mortgage company to obtain an affordable repayment plan. Many times the mortgage company’s idea of what a homeowner can afford differs dramatically from reality. It is up to the homeowner to convince the mortgage company to give them a deal that is financially viable.
So, now that the homeowner has laboriously contacted the mortgage company, persuaded them to send a workout package, completed the package with perfection, and negotiated an affordable repayment plan, the home can be saved from foreclosure. Sadly the vast majority of homeowners are not able to do this because of the operations of the mortgage company.
Homeowners need assistance in dealing with the mortgage companies. The American homeowner needs someone to come to the rescue and deal with the people that have the power to help. Some companies are accomplishing that every day, but the average homeowner does not have access to these types of firms.
Until then, we will have homeowners losing their homes to the very people that have the power to help.
It is quite sad indeed.
January 18, 2008
WHAT DO GOVERNMENT FORECLOSURE PROPOSALS MEAN TO THE AVERAGE HOMEOWNER?
America is facing a crisis. The cornerstone of our capitalistic economy is being chiseled away by the current foreclosure crisis.
In Texas, families of five are being ripped out of their homes. In California, homeowners are pawning heirlooms to stem foreclosure. In Massachusetts, widows are being put out on the streets. A foreclosure epidemic has wrapped its chains around the beating heart of the American economy and intends to squeeze out every ounce of dignity from American homeowners.
Who will come to the rescue? Who will be able to loosen the grip of the current financial crisis bringing America to its knees?
Well-meaning politicians, judges, mayors, senators, congressmen, and governors have all offered solutions to the problem. Our President has even offered his own slate of solutions to help bridge the gap between problem and solution.
In fact, many of these proposals have received mass amounts of publicity, and been deemed as immediate solutions to the current foreclosure situation. But, upon further examination, a startling truth is revealed.
For example, Sen. Hilary Clinton's proposals have garnered public attention as being a viable stopgap for homeowners facing foreclosure. But, Sen. Clinton's main proposal is a mass conversion of many adjustable rate mortgages (ARMs) to fixed-rate conventional loans, which only affects homeowners with ARMs (a small percentage of the home-buying populace). Also, it offers little help to the homeowner that is currently three payments behind and facing foreclosure proceedings because the conversion of those loans would take many months.
Also, Sen. Barack Obama has offered his own proposal. Again, his plan has been highly touted as the most relevant solution by major media outlets. His proposal involves giving money back to the consumer to stimulate economic growth. It sounds wonderful but the current proposal to give every worker and Social Security recipient in America $250 would cost the government $45 billion. And, for some reason, Sen. Obama is not focusing on delinquent homeowners but on consumers in general. This doesn't help that family of five in Texas with a $700 monthly mortgage payment.
Lastly, and most importantly, we look at President Bush's plan to stem the foreclosure flood. His plan is to enact a freeze on ARMs to keep the interest rates on those loans from adjusting for "eligible" homeowners. The obvious problem with this plan is that it only affects those homeowners with ARMs and it only affects those homeowners that are "eligible." Unfortunately, the public is not told by what standards they may become "eligible."
One must conclude that the government is fighting a public relations battle and not a battle to affect the lives of thousands of helpless homeowners. The government proposals have failed to get to the root of the problem. Homeowners are not receiving help from their own mortgage companies during this time of crisis. That problem is not going to be overcome by the far-reaching government proposals that dominate the headlines of daily newspapers.
We must urge the government to take action and start at the root of the problem. Homeowners need help and the government is not giving it to them. The average homeowner is in need of assistance in getting their mortgage company to take time with them to work out their problems, not a freeze on adjustable rate mortgages.
If you are a homeowner facing foreclosure, please do not be misled by the publicity of these many public relations campaigns. Do not assume that the government is going to assist you in saving your home. Many homeowners across America are coming to the disquieting realization that the problem lies with the mortgage company and the indifference that they have toward the homeowner.
How many more families of 5 will be put out on the street? How many more widows will be forced out of their homes while major media outlets rave about government proposals? The problem lies with mortgage companies apathy and unwillingness to help the homeowners that they so eagerly take money from. Until mortgage companies, government officials, and homeowners realize that, our country is on a course for economic disaster.
January 10, 2008
Hey Candidates: It's still about the economy and foreclosure
Monica Davis
Originally published by www.opednews.com on 1/9/08
Dear Hillary, Barak and assorted others:It's still about the mortgage and foreclosure frenzy. It's still about people losing their homes, being thrown out in the street, adding to the nation's homeless problem.
The vultures are rolling in--what are you going to do about it? Ya'll are still senators, aren't you?It’s all over the news, how the mortgage foreclosure fallout is turning parts of American cities into ghost towns. As you bask in the suns of your respective universes, foreclosures are hitting condos in Miami, apartment complexes in Ohio, and closing in on homes and farms from shore to shore.
The market has tanked so rapidly that many renters no longer know where to send their rent checks. On a foreclosure blog, one man brags that he hasn’t paid rent in four months because his rented condo has been flipped more than a pay day hooker at a military base and nobody knows he’s renting the property.
The consequences of cheap condo conversions, greedy investors, criminal conspiracies and con gams, combined with the action, or non-action of look the other way authorities have come home with a vengeance. Home prices are falling like dead birds from the sky, as many of the nation’s cities and states prepare for massive budget shortfalls and layoffs, due to decreased property revenues.
The mortgage fraudsters have made billions through fraudulent appraisals, sales to non-existent buyers, pocketing their often-outrageous fees and profits. Now that the winds of time have finally blown their spit and glue house of cards into oblivion, the nest of snakes in the nation’s real estate investment sector twisting and hissing for the whole world to see. Unfortunately, their poison has spread throughout the world in the form of risky securitized mortgage investments.
Straw buyer purchased condos sit empty and abandoned in hundreds of cities across the country. The hand of real estate fraud continues to wreak havoc around the world as discover that their loan portfolios are full of nearly worthless, or grossly devalued mortgage investments.
The fur is flying so fast that many of the investors have no idea what their investments are truly worth, nor are many of them aware of exactly what they own. The untold thousands of foreclosed rental properties stick in their collective craws like indigestible rock.
Many banks have no intention of becoming landlords and kick out tenants when they foreclose on an apartment property. They’d rather see the property remain vacant, rather than bother with becoming landlords or hiring property managers.
Onetime real estate investment hotspots are cooling fast. A recent sub-headline in a Miami newspaper reads, "South Florida’s many condo buildings began to suffer from hundreds of foreclosures – and it may get worse in 2008." (Miami Herald, 1-09-08)
According to several real estate analysts, the foreclosure crisis is really hitting condo complexes, with those who are left behind and continue to occupy their buildings now having to foot even higher maintenance and home owner association costs. The owner-occupied units have to take up the slack for the now abandoned and foreclosed invester-owned properties.
It’s been said that hot manure doesn’t run uphill and the same is true of bills and fees. When companies get in trouble, they pass their ‘trouble’ on to their customers and clients. The same is true of governments and home owner associations.
Many cities are losing tax revenue because of the massive amounts of abandoned foreclosed properties within their corporate boundaries. Likewise, the remaining condo-owners and property owners who live in neighborhoods or condo complexes with large amounts of abandoned, foreclosed properties wind up taking up the slack in some form or another, through decreased property values and falling tax and homeowner’s association revenues.
Condo associations, which collect fees from residents for maintenance, repairs, management salaries and utilities, have been losing revenue as the numbers of speculator-driven foreclosures rise. It turns out that many condo owners who are struggling to pay their mortgages are also falling behind on association dues. (Business Week, 11-29-07)
Across the country, there are a lot of anxious investors who are waiting for the other shoe to drop. Many hopped into the condo investment business hoping to take the loot and run, but unfortunately, when the bottom dropped out of the market, there were no takers and they were left holding the bag. Thousands of investors were so sure they were going to strike it rich in real estate development that many invested money they could not afford into homes, condos and apartments, only to find that they now are holding the bag on white elephants that nobody wants to buy.
The condo frenzy displaced millions of apartment dwellers, in a time where it was thought that you could make a bundle converting apartments into condos and selling each unit at a hot price. Unfortunately for them the market has not only cooled, but a great part of it is frozen into foreclosure. And now, the shoe has not only dropped, it’s been kicking investors upside the head with a vengeance.
Many investors are caught between a rock and a hard place, saddled with unsaleable properties. Instead of appreciating nicely, with a good profit in store, the value of their real estate investments are instead dropping like rocks, leaving them in a quandary, as was the case with a group of investors in the rental market in San Diego.
The group toyed with a number of possibilities: condo conversion-conversions, condo reversions and even apartment conversions. Pinnegar, executive director of the San Diego County Apartment Association, isn't sure if they ever pinned down a final moniker. But he does know that everyone in the business is asking what's going to happen to all the people who jumped on the condo conversion bandwagon in San Diego, only to find a sinking condo market at the end of the road. ("Condo Conversion-Conversions", Will Carless, staff writer, Voice of Sand Diego, 7-24-06)
The mortgage and foreclosure crisis, which is currently chewing up the nation’s real estate market has uncovered deep faults in the industry. According to an on-line version of Atlantic magazine, there is quite a lot of variety in the types of cities, structures and neighborhoods struck by the foreclosure mess, so much, in fact, that whether foreclosure is a catastrophe or minor crisis depends much on the nature of the mortgages being foreclosed.
Nationally, the variety of communities facing a wave of foreclosures is striking. Many areas of go-go growth—the Southwest, California’s Central Valley, much of Florida, eastern Colorado, Greater Atlanta—have been hard-hit. So too have portions of the Rust Belt, and a narrow east-west strip running from Tennessee into Arkansas. The places encompass run-down neighborhoods as well as areas with at least a veneer of affluence. (On the street pictured below, many of the houses sold for $400,000 or more.) If nothing else, the meltdown forces us to consider how much uncertainty may lurk beneath the surface of apparent prosperity; an ample suburban house could be an asset or a liability, depending on the terms of the mortgage and the direction of the local market. ("There Goes the Neighborhood", the Atlantic.com, January/February, 2008)
Meanwhile, as the lights go out in condos and homes around the nation after a visit from the foreclosure squad, many so-called vulture investors say, don’t blame us, we provide a necessary service. So-called vulture investors say they are a necessary part of the real estate food chain, even going so far as to say there aren’t enough of them to "clean up the market."
Between 2006, the start of the sub prime meltdown, and 2007, over 165 lenders have closed there (sic) doors due to poor business decisions. What happened to all their loans? Larger institutions purchased them at pennies on the dollar. These big banks and others were not looked at as vultures. It was simply accepted as common business practice. Now those institutions have to foreclose on all the nonperforming notes they bought and try to sell the properties at auction. What happens if no one buys them? What if there are no vultures to come and solve the problem? The more money the banks spend on their properties the less money they have to lend. Eventually they will go out of business and possibly send the country in to a recession. The "carcasses" will rot away, and feed no one. That where the Vultures come into balance the food chain. Traditionally Vulture funds were set up to help the rich get richer off the miscalculations of others and you would need a minimum of 1 million dollars to take part - because that’s what the market conditions called for. However, now we are in a new age; the age of the Vulture. The market is saturated with deals. The game calls for more players. (foreclosure blog)
Many who can still afford their homes continue to pay their mortgages, despite living in neighborhoods with far too many vacant, foreclosed properties for their comfort. They know what the real estate agents know: foreclosed properties in their neighborhoods decrease the value of their own property. To heap more coals on this roaring fire, foreclosure is an infection which contaminates whole city blocks, entire neighborhoods.
One of the most dangerous side effects of foreclosure, residential foreclosure in particular, is the effect that abandoned, foreclosed homes/property have on the surrounding neighborhoods. The boarded up, empty, abandoned properties, by their very presence, harms the neighbors of people in foreclosure, even those who aren’t having trouble making loan payments.
According to one academic study, every foreclosure reduces the value of all other houses within an eighth of a mile by about 1 percent, as the sight of vacant property scares off potential buyers. Combine that with a market already in decline, and neighborhoods that begin to have troubles can go off the cliff. On the street pictured, three houses not in foreclosure have been languishing on the market for 72, 97, and 149 days; asking prices along the cul-de-sac vary widely, but average about $40,000 less than the comparable prices in the first two quarters of the year. (Ibid)
From a "vultures" point of view, dive on in, the water's great. Despite the foreclosure glut, there are people, institutional investors, who have billions of dollars in investment capital available. They are on the prowl, looking for good real estate investments, yes, even in this market. And they are searching for a "good deal"—with cash in hand.
(Jack) McCabe, chief executive of McCabe Research and Consulting in Deerfield Beach, Fla., said investment groups with capital "in the multiple billions" are already active in South Florida, searching for fire-sale prices on properties with good long-term prospects. (Washington Post, 10-20-07)
To top it all off, and throw more blood in the water, the fact that the major players keep falling out of the trees like iguanas in a South Florida cold snap makes the game all the more exciting and profitable for those who have the money to buy. As of today, rumors about a potential bankruptcy by a major player in the mortgage industry abound.
The LA Times is reporting of rumors that Countrywide may file for bankruptcy protection.
Countrywide Financial Corp. denied Tuesday that it was considering filing for bankruptcy protection, but its stock price collapsed on widespread rumors, falling to an 11-year low. The Calabasas-based company, which cut more than 11,000 jobs last year, was pummeled by the bankruptcy speculation and Wall Street gossip that its debt would be downgraded by one of the major bond-rating firms. (LA Times, 1-9-08)
The bloodletting in the mortgage industry continues and the vultures are waiting in the wings. As one analyst put it: the problem is not just centered on urban areas, in neighborhoods full of subprime mortgages sold to poor and minority homeowners. There are trillions of dollars worth of risky loans out there, and untold numbers of vulture capitalists waiting to invest in the fallout.
As America's mortgage markets began unraveling, economists initially focused on sub-prime mortgages issued to largely low-income, minority and urban borrowers. Closer analysis reveals risky mortgages in nearly every corner of the USA. Analysis by The Wall Street Journal indicates that from 2004 to 2006, when home prices peaked in many parts of the country, more than 2,500 banks, thrifts, credit unions and mortgage companies made a combined $1.5 trln in high-interest-rate, high risk loans. The potential losses on these loans are unknown. ("This Credit Crunch Has Bite: Part I", Minyanville.com)
Monica Davis is a journalist, public speaker and author of hundreds of articles and several books, including: Land, Legacy and Lynching: Building the Future in Black America. Her articles have been used by home schoolers and students around the world. Author website: http://www.lulu.com/davis4000_2000
December 10, 2007
Quick response can mitigate foreclosure fallout
Maria Saporta
Originally Published in the Atlanta Constitution Journal on: 12/10/07
Vacant, boarded-up houses destroy communities. They become havens for crime, vandalism and deterioration, pulling down the value of neighboring homes and spreading unease for nearby residents.
Unfortunately, this is a reality that communities throughout the region face with the record number of foreclosures.
Formerly reviving communities are being hit with decline, and many families, once part of healthy neighborhoods, are in disarray and may even become homeless.
It's not a pretty picture.
Our region already faced a shortage of affordable housing. Foreclosures will exacerbate the problem, especially in the near term.
Much needs to happen in a short time.
At the Regional Housing Forum meeting last week, experts offered game plans on how to help attack the problem.
The best solution: Prevent homeowners from having to declare bankruptcy. As soon as a homeowner is 30 to 45 days late with a mortgage payment, help should be available before it's too late.
"The likelihood of stopping foreclosures is much more likely in that time period than after 90 days," says Emory University professor Frank Alexander, who is doing a stint at Harvard University until January.
Several entities, such as the Consumer Credit Counseling Service and the Home Ownership Helpline, can help homeowners restructure their debt and better manage finances. Alexander thinks banks should suggest homeowners get such help at the first sign of trouble.
One critical change that needs to happen is for the state Legislature and the governor to extend the amount of time between a declaration of default and the sale of a foreclosed home.
Currently, Georgia and Texas have the shortest window — 37 days — between default and sale, giving homeowners little time to work on a solution.
Alexander and his counterpart at Georgia Tech, Dan Immergluck, believe a three-month timeframe would be much more reasonable and would help keep people in their homes.
It's too late for hundreds of thousands of metro Atlanta residents who already have suffered foreclosures since 2001.
So what should happen post-foreclosure?
In an ideal world, foreclosed properties could return to the market at reasonable rates for working families.
That's easier said than done.
"These lenders are under pressure from their investors to maximize returns," Immergluck says. "Yet they need to bring down values of the properties that they own so that they're affordable."
It's to the lender's advantage to quickly get new residents into foreclosed homes. The value of their properties will rapidly decline the longer they remain vacant. There are several technical ways to structure deals so that banks can dispose of their property in constructive ways.
They can work with the Atlanta-Fulton County Land Bank Authority, parking the property there tax-free until it is sold at an affordable price. They can work directly with community development corporations or nonprofit builders that can help make repairs and find qualified buyers.
"We are looking at this as an opportunity to try to reverse the impact of having streets and streets of boarded-up houses in neighborhoods," says Andy Schneggenburger, executive director of the Atlanta Housing Association of Neighborhood-based Developers, which has 25 members.
Local governments also can play an important role. Alexander says it's vital that building bureaus pressure lenders and owners to keep properties in good shape. If a lender/owner is not maintaining a home or its yard, a local government can put a lien on the property.Atlanta City Councilwoman Mary Norwood has pushed the city to crack down on slum landlords, investigate mortgage fraud and seek affordable housing solutions.
She calls the current crisis a "foreclosure tsunami," and she is working with other organizations to create a task force to attack the problem.
She also hopes to work with major employers to provide housing grants for down payments and other incentives. It's an advantage to have employees live closer to where they work, which saves them time and money in transportation.
If the state, the region and local governments work together, Norwood sees a "once in a lifetime opportunity to match foreclosures with affordable housing." If not, the consequences will be extreme.
Norwood says half of the city of Atlanta's land area has been affected by foreclosures and fraud.
"The result is abandoned, unoccupied houses," she says. "My real goal is that we not allow our neighborhoods to deteriorate and become depopulated."
The region faces a wave of problems — record draught and water shortages, congestion and limited transit, an embattled Grady Memorial Hospital and escalating foreclosures. Let's hope our leaders are ready to take action in all these areas and that metro Atlanta will be able to survive this challenging era.
rpr by permission
December 9, 2007
Bankruptcy doesn't have to end in foreclosure, debt group hears.: Source By David Flaum
Helping people who filed wage earner bankruptcy petitions stay with their repayment plan could help one in 10 of the potential dropouts from losing his home to foreclosure. That was the conclusion of Berje Yacoubian, whose firm, Yacoubian Research, studied bankruptcy and foreclosure trends in Shelby County for the Memphis Credit & Bankruptcy Collaborative. Advertisement The collaborative is a loose confederation of credit counselors, bankers, real estate people, consumer advocates, educators and government workers set up to assess and deal with personal financial issues and education. Yacoubian researchers studied 46,000 Chapter 13 bankruptcy petitions filed by Shelby County residents from 1999 to 2002. Chapter 13 is the part of the bankruptcy code that allows someone to keep his home, car and some other assets while he repays his debt on a schedule filed with the court. The process is designed to take three to five years. "The primary purpose of Chapter 13, if you own property, is to save your house," Yacoubian said. Of the 9,721 petitions filed in 1999, only 584 had been discharged by April 2003, meaning the debtor had completed his program, Yacoubian said. Another 2,462 cases were still open and 6,675 had been dismissed, meaning the person filing them had dropped the ball on the repayment plan, he said. Foreclosure is "the ultimate nightmare" for Chapter 13 filers, Yacoubian said. And about 35 percent of the 15,000 foreclosures in Shelby County since 1999 were filed against people who had petitioned for Chapter 13 bankruptcy protection, he said. At the current pace of Chapter 13 bankruptcy filings, we're likely to see 4,700 foreclosures in Shelby County this year, Yacoubian said. "Foreclosure is really the last step in the process," he said. "Not everyone who files for Chapter 13 and is foreclosed on can be saved. Intervention to counsel homeowners at risk could prevent about 10 percent of the foreclosures." Members of the collaborative have to decide where there are opportunities for financial education to accomplish that, said Beth Dixon, president of The RISE Foundation, a nonprofit group that sponsors the collaborative. Saving 10 percent of Chapter 13 filers homes from foreclosure is possible "if you have the resources," said Ron Roudebush, regional manager of the Consumer Credit Counseling Service of Memphis. Based on the number of households, Chapter 13 bankruptcy is far more common in the "center city" - the 14 Zip Code areas mostly west of Highland - than in the suburbs (the remaining Zip Code sections), Yacoubian's research found. About 19 percent of center city households filed for Chapter 13 from 1999 to 2002 compared to 7.4 percent of suburban households, he said. Foreclosures follow a similar pattern, but the gap is closing, Yacoubian said. The number of foreclosures in the center city was 18 percent higher in 2002 than in 1999, but the suburban figures were up 55 percent. "This is no longer just a center city problem," Yacoubian said. - David Flaum: 529-2330 Copyright, The Commercial Appeal, Memphis, TN. Used with permission.
December 7, 2007
Home Foreclosures Hit Record High - AP
WASHINGTON (AP) — Home foreclosures shot up to an all-time high in the third quarter, fresh evidence of the problems afflicting distressed homeowners amid the housing meltdown....
The percentage of subprime adjustable-rate mortgages that entered the foreclosure process soared to a record of 4.72 percent in the third quarter. That was up from 3.84 percent in the second quarter. Late payments jumped to a record high of 18.81 in the third quarter, up from 16.95 percent in the second quarter.
The association's survey covers more than 45 million home loans nationwide.