Archive for the ‘foreclosures’ Category
Democrats: Pro FDIC Loan Plan
Tuesday, December 30th, 2008A $24 billion bailout money proposal by Federal Deposit Insurance Corporation (FDIC) to support 1.5 million struggling borrowers will supposedly prevent foreclosures through modified loans by end of year 2009. It can be recalled that the same proposal was opposed by the Bush Administration and was once again moved last week by FDIC Chairman Sheila Bair.
During a hearing last week, Bair urged a more aggressive action by the government in helping millions of borrowers avoid foreclosures. She said it would be a necessary move to achieve economic recovery.
This has brought a division among the house with Democrats supporting the proposal. Even House Speaker Nancy Pelosi, from the District of California, insisted the opposing Treasury Secretary Henry Paulson, publicly to side with the FDIC plan. Also, in a statement made by Pelosi, solutions to home foreclosure problems have been present for a while and it would be an unacceptable move if they are delayed further.
However, dissatisfaction of lawmakers also plays a significant role especially since the Congress is capable of imposing new conditions on bailout money use. Although Democrats are for the idea of pushing money for the aid of challenged auto industry as well as struggling homeowners, legislative move is seemingly frozen until President-elect Barrack Obama’s administration starts on mid-January 2009.
Paulson reaffirmed his opposition, even citing a program during the previous year wherein borrowers serviced by Fannie Mae and Freddie Mac, two of the government mortgage giants, would be allowed longer terms for a more affordable payment or even reduction of interest rates which would help the homeowner prevent foreclosures. This statement however, was criticized by Bair stating the plan had fallen short of the needs.
With FDIC’s proposal, 2.2 million of the top at risk loans of struggling homeowners would be allowed modification of their mortgages to avoid foreclosures. Apart from that, even the servicer gets to benefit — being granted $1,000 for every loan modified.
Controlling Foreclosures: A Key to Recession
Monday, December 29th, 2008The number of foreclosures has increased in staggering proportions since last year, with figures almost doubling in the last few months. 2007 registered 1.5 million foreclosures proceedings. This figure was almost matched during the first 6 months of 2008. If this trend goes on, more families will lose their homes to foreclosures during the next two years. The Federal Deposit Insurance Corporation (FDIC) estimates this figure between 4 to 5 million homes.
Various sectors have mixed emotions towards people who are currently in imminent danger of foreclosures. Many are blaming them for triggering this financial crisis by their exuberance in taking on mortgages on homes and loans that they will not be able to pay in the first place.
Others consider these people victims of misleading sales practices making them believe in the perpetual increase of home values and enticing them to take on loans with high risks just to close the deal on that fabulous home.
The same system that allowed these troubled homeowners facing foreclosures to take on unrealistic loans tumbled down upon them when interest rates adjusted beyond their paying capacities. This triggered a wave of delinquencies resulting in foreclosures, which in turn became a catalyst for unemployment, recession, severe drops in market prices for median homes and economic instability. A vicious cycle unfolded that should end before everything is too late.
Several good ideas have been put forward from various sectors, from using the federal bailout fund to provide direct financial assistance to homeowners facing foreclosures, to a 120-day moratorium on foreclosures. One proposal allows banks to rent out foreclosure properties to former owners. Great efforts are also being placed in making homeowners and lenders discuss a restructuring of the loan that will benefit both in the long run.
However, proposals for direct assistance to homeowners are being resisted directly from the top, and economists are hoping that a change in administration would produce better action. Homeowners have nothing else to do but hope.
Paulson Explains Change in Foreclosure Fund Spending
Monday, December 22nd, 2008In a prepared statement to be delivered at the U.S. House Financial Services Committee hearing on Tuesday, Treasury Secretary Henry Paulson said the Troubled Asset Relief Program (TARP) was not intended to be an economic recovery and stimulus package. He said that the $700 billion TARP was meant to stabilize the country’s financial system.
Paulson further explained that since the summer when the proposal was handed to Congress, the U.S. financial crisis has spread worldwide, worsening further the U.S. financial situation that the Treasury had to take action to save failed financial institutions in order to stabilize the country’s financial system.
As a response to expected questions about foreclosure prevention, Paulson stated in the prepared document that the Treasury’s decision to buy equities in U.S. financial institutions will ultimately become more effective in preventing foreclosures than if Treasury carried out the proposed purchase of delinquent loans from mortgage banks. He explained that there are other programs being worked out to help troubled homeowners avoid foreclosures.
Paulson is expected to be interrogated intensely at the House hearing, especially by Democratic lawmakers who have previously expressed their disappointment at Paulson’s decision. The Democrats said they approved TARP mainly because they expected the program to help millions of Americans facing foreclosures and help stop the soaring number of home foreclosures across the country.
Among the lawmakers that Paulson faces at the hearing will be Democratic Representative Frank Barney, chairman of the House Financial Services Committee, who has been vocal in his assertions that the foreclosure prevention objective was clearly spelled out as one of the options in the original TARP proposal presented to and approved by Congress in the summer.
Of the first $350 billion that Paulson got from the $700 billion TARP, $125 billion was given to nine major banking firms, including JPMorgan Chase, Citigroup and Wells Fargo, and $40 billion was provided to international insurance firm AIG.
Deceptive Mortgage Ads Eliminated
Tuesday, December 9th, 2008Mortgage advertisements are to attract property buyers. But what most of the consumers do not know is that there are hidden risks in getting carried away by those ads.
Attorney General John Suthers moves to put an end to the deceptive mortgage ads by foreclosure rescue firms and mortgage brokers to save Colorado homeowners. His specific targets are those who offer adjustable rate mortgage loans or ARMs, without informing the people of the risks attached to such an option.
Three brokers practicing deceptive-advertising have been named by Suthers: 5280 Financial Group, Arbor-Financial Inc., and Mortgage Toolbox. But after some agreements have been signed, these brokers have agreed to disclose real loan terms and only fixed rate or traditional loans, and not the ARM option in their advertisements.
Other actions have been made by Suthers. He has filed civil-consumer protection claims against Home Mortgage Solutions Inc. for its direct mail regarding ARM without including the associated risks. He has settled with Encore Lending LLC, which inflates incomes of borrowers to qualify them for better loans. Another settlement has been agreed with Tri-Point Realty, which sends false letters to Colorado homeowners requesting them to refinance.
Lastly, Suther’s office has entered into an agreement this year with seven companies to protect distressed homeowners facing foreclosure from rescue firms who do not follow the Colorado’s Foreclosure Protection Act.
All the companies Suther have named have agreed to cease operations until they are able to comply with the Foreclosure Protection Act. He has also noted that the Colorado Housing and Finance Authority offers free or low-cost programs regarding mortgage application.
It is good to know that there is an effort like this from a state’s Attorney General. This is very advantageous for Colorado homeowners because this enables them to be more careful in dealing with mortgage brokers and rescue firms.
The revelations of the deceptive-advertising practices have stopped such practice, and have advocated the protection of the borrowers facing foreclosure.
Additional 32 Foreclosures Filed in Pasco County
Monday, December 8th, 2008On November 4, 2008, residents of Pasco County were alarmed that 32 additional foreclosures were filed on that day. This brings the total of Florida foreclosure filings to over a quarter of a million in the first half of 2008. An estimated 4 million properties are in foreclosure around the country.
According to ForeclosureConnections, about 60 percent of homes purchased in the U.S. have filed for foreclosure since 2003. In September 2008, Pasco reported over 1,100 filings and 32 more were added in November.
The ages of those 32 Pasco homeowners who filed range from 20s to 60s, with some of them house painters, realtors and home inspectors. These homeowners paid from $220,000 to $825,000 for their houses that were constructed in neighborhoods of Port Richey, New Port Richey, Holiday, Land O’Lakes, Hudson and Zephyrhills in 1969, 1977, 2004 and 2006.
The same homeowners also failed to make monthly payments since March of this year. One homeowner who filed for foreclosure is a man who used to be a soccer coach. This high school science teacher and his wife owe $3,000 in mortgage more than the amount they paid for their house when they bought it in 2004.
Another homeowner, an older woman in Port Richley, still failed to meet her $430.01 monthly payment for her one-story house despite working as a director in a local church,
One homeowner who is struggling to make his monthly payment is 53-year-old engine repair shop owner, Randy Chiavaroli. His wife received an award for her Boy Scouts volunteer work. His son who has spina bifida is confined in a wheelchair.
When the construction activity in the county slowed down, his business was affected forcing him to reduce the number of his employees from four to one. His plight deteriorated when the price of gas increased.
Advertising Campaign for the Prevention of Foreclosures Reached Over 100 Million Households
Monday, December 1st, 2008Over 100 million households in the United States have been reached by a foreclosure prevention advertising campaign supported by the mortgage industry. The national public service campaign is led by the partnership of Neighborworks America and Ad Council.
The campaign drive, which includes television, the Internet, radio and outdoor advertising, was launched with financial and material support from the financial and mortgage services industry in June 2007.
Ad Council’s public service advertising focuses on providing information to homeowners facing foreclosure about where to look for help if they are having difficulty meeting their mortgage payments.
The said campaign has also generated about $74 million donated advertising time from lenders and non-profit organizations. It has helped homeowners who were experiencing difficulties meeting their mortgage payments find and contact housing counsellors and received information to protect their properties from foreclosure.
NeighborWorks America Chief Executive Officer Kenneth D. Wade said that the over 100 million Internet, outdoor and broadcast media impressions indicated that the campaign was a huge success. He also said that because of the campaign, many homeowners avoided filing for foreclosure proceedings.
The campaign advises homeowners facing financial difficulties to contact Homeownership Preservation Foundation’s Homeowners Hope Hotline. The foundation has received over 916,000 telephone calls since the start of the campaign.
Meanwhile, on the associated website for the campaign, homeowners are being urge to call their mortgage servicer. NeighborWorks America, a HOPE NOW Alliance member, knows that property owners are responding more to mortgage servicers.
Wade blames the current economic crisis to the poor housing market. He believes that continuous outreach efforts and providing the right information to homeowners on how to avoid foreclosure are critical to reversing the current downtrend in the market.
He adds that the NeighborWorks America’s outreach efforts will continue until 2009. The organization is also working to add more programs to help strengthen and stabilize the housing market and communities.
Coping with Weak Economy and Avoiding Foreclosure
Monday, November 24th, 2008If you are not pre-occupied with the news of the poor economy, then you must be focusing all your efforts in trying to avoid losing your home to foreclosure. The funny thing is that you need not look far for you can actually earn extra income by converting some parts of your home into rental units.
- Garage – some homeowners have decided to rent out their garages to small businesses to be used as office space. Or you could always rent it out to an artist as a small art studio.
- Rooms – if you have several unused bedrooms in your home especially if your children have all grown up, it would be practical for you to rent these rooms out. With the supply of rental homes dwindling in most cities, it will not be difficult for you to find a tenant. It will be your choice if you want to conduct a background check before renting out the rooms in your home.
- Other living spaces – some parts of your home might be converted into a separate living space for rent. You will just probably need to add a kitchen sink or a bathroom so that you could justify a higher rental fee.
Obviously, you can use the rent money to pay for your mortgage. As for permits, you should inquire about the requirements needed and ask about taxes and necessary license from your local county. This way, you are not violating any local housing laws and the rights of your tenants. You should also check with the city engineer, especially if you will be adding kitchen units, for health and safety reasons.
Despite the bad economy, homeowners should still continue looking for solutions to their mortgage problems in order to continue fuelling the great American dream of home ownership.
Beware of Foreclosure Rescue Scams
Friday, November 21st, 2008A lot of foreclosure rescue companies seem to be real. But, hey are actually fraudsters pretending to be foreclosure counselors who take away titles from homeowners facing foreclosure.
Often, such people request you to sign this and that and make promises that in reality are too good to be true. If you are worried about avoiding these scams, you will be delighted to know that do not need assistance from a third party to recognize them.
Once a default notice has been filed, scammers will offer any of these helps, which should already alarm you:
- The company will pay the lender for your back payments.
No charities bail out distressed homeowners from foreclosure by giving money to the lender.
- You can apply for another loan to pay off your current lender.
No other companies can lend you money when you are already in default unless your existing lender lends you money for the reinstatement of your loan.
- You can stay in the house as a tenant and later reclaim title.
The possession of your home is only until the completion of foreclosure, which takes about three and a half months to a year, depending where you live.
- By paying an upfront fee, they will freeze foreclosure for you.
Stopping foreclosure has no guarantee. There are options for you to work out with your lender, which you can do yourself.
- By paying some amount to the company, they will make some arrangements with your lender to allow you to stay in the property.
There is no magical remedy for foreclosure. Lenders offer options you can choose from, whichever best fits your situation.
- Signing a contract or deed transferring title is temporary.
All contracts are final. Once you have signed one, you have already transferred title.
You should report such scams to any of the following: real state licensing department, office of the Attorney General, office of the local District Attorney for Consumer Fraud, or FBI.
Fraudulent “foreclosure reinstatement” scheme discovered
Monday, November 10th, 2008The Exchange Commission and Security filed fraud charges against the promoters of a real estate investment scheme that operated a fraudulent foreclosure reinstatement scheme. The scheme started in 2005 and got around $18 million in only two years. More than 600 people were caught by the scheme with the promise that they could get returns of 50% of their investment within 30 days.
Foreclosure Rates Higher in Brickell condominiums
Monday, November 10th, 2008According to some of the recent reports, Miami foreclosures have completely overshadowed the South Florida real estate and housing market. As a result of high number of foreclosures in 2008, Miami is ranked second in the country where foreclosures are concerned and Brickell condos have the highest foreclosure rate locally.
According to one of the new reports that has been taken out by Condo Vultures, the 3 condominium towers of Brickell condos has recorded the highest number of foreclosure homes that were filed in the Miami-Dade County in the first 3 quarters of 2007 and continue to do so in the first quarter of 2008 as well.
Brickell condos have recorded 54 foreclosed homes with The Club at Brickell Bay situated at 1200 Brickell Bay Drive leading the pack. This is the highest number of foreclosures by state for any particular building in the Broward and Miami-Dade counties. The number two spot goes to the The Vue at Brickell, situated at 1250 S Miami Ave., as it has recorded 49 foreclosures. The Jade at Brickell Bay situated at 1331 Brickell Bay Drive has recorded the third highest number of home foreclosures.
All the three Brickell towers together accounts for almost 37% of the foreclosure actions that have been filed by the top 10 buildings in Miami and entire of South Florida according to a report by Condo Vultures. This accounts for almost $113 million in mortgages as well as fees that homeowners owe the lenders.
As a result of this high number of foreclosure homes in these 3 buildings, Brickell Avenue as well as Downtown Miami can expect a high influx of discount buyers and investors in the near future.
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