Archive for the 'Foreclosure Crisis' Category

An estimated 2 million school children across the nation have been and will be adversely affected by foreclosure since 2007, according to nonpartisan group First Focus. Not only families that experienced lender foreclosures are affected, but also families that went through tax foreclosures.

U.S. President Barack Obama has released details of his foreclosure prevention plan which include reducing mortgage loan payments for about 9 million distressed homeowners and extending the role of Federal Home Loan Mortgage Corp. and Federal National Mortgage Association in trimming the number of foreclosed homes.

President Obama in Phoenix, AZ today unveiled his administration's latest attempt to help save millions of Americans from possible foreclosure. The Homeowner Stability Initiative will provide up to $75 Billion dollars in aid to struggling homeowners; those who are facing foreclosure and those who also are "upside down" on their home loans. This new initiative is expected to help as many as 9 million homeowners and will be ready to start helping homeowners as soon as March 4, 2009.

Last Tuesday, a Financial Stability Plan has been outlined by Treasury Secretary Timothy Geithner that aims to distribute as much as $2 trillion of private and public funds to the crippling financial system. The plan will be financed within a complex combination of a balance sheet extension of the Fed, private capital and federal tax dollars. Basically the central bank will produce more money in order to finance business and consumer lending and slow down home foreclosures. The plan has four focal points to strengthen financial markets:

A surprising increase in contract signing to purchase repossessed homes occurred last December indicating housing demand. The pending home resale index showed a 6.3 increase to 87.7, the first rising since August. But other sources say that the inventory of foreclosed homes actually caused a $3 trillion lost of home value in 2008.

Barack Obama, who is just a few days away from being inaugurated as the 44th and the first African-American U.S. president, is facing his first big test in the Senate. Democratic and Republican senators have been debating whether to give him the second $350 billion of the Troubled Asset Relief Program fund for his own foreclosure prevention program.

More empty space is expected this year as more jobs are lost and businesses become unstable. Rental income and property values decline. In fact, 2009 is predicted to be the worst year of the commercial real estate market.

Foreclosures have once again brought a huge impact on housing markets. Out of twenty cities in October 2007, 14 have shown declines in home prices. These declines have already reached up to 18% as compared to records from the previous year. According to David Blitzer, chair of Index Committee at Standard & Poor's, this record was last exhibit in March of 2004.

Foreclosure filings have not stopped despite the introduction of loan modification programs by Citigroup, Bank of America Corp., JP Morgan Chase, the Federal Housing Administration (FHA), by the Federal Deposit and Insurance Corp. (FDIC) at IndyMac Federal Bank and by several other mortgage lenders.

Many experts believe that the key to solving the deepening economic problem is to stabilize the housing market and finally put an end to increasing foreclosures.

Foreclosure crisis has excessively expanded that even top banking regulator expressed concern about struggling homeowners who can no longer keep up with housing problems. Even FDIC Chair Sheila Bair claimed during a forum at Washington that the nation is way behind in dealing with this problem. Had her earlier warnings regarding making modifications on mortgages, she says the nation may not be experiencing the challenges it is experiencing today.

The Mortgage Bankers Association (MBA) has released data showing that one per 10 homeowners in the U.S. has defaulted on his monthly mortgage payment or is in some form of foreclosure. The data, compiled for three months until September 30, 2008, only strengthens the fact that experts have known all along: preventing foreclosures is the best tool to achieve economic recovery.

If only the Federal Reserve had paid attention to warnings about deregulation being unmanageable in 2006, it may have prevented the present slump of house foreclosure.

Foreclosures rise as more and more homeowners fall behind their mortgage payments. The blame is put into the weak economy causing a lot of homeowners to lose their jobs and lose their only means of paying their mortgages.

In Michigan, families who lost their homes to foreclosures further lose their last chance in saving the said properties.