Archive for the 'Foreclosure Crisis' Category

In a forum held at the Capital Community College in Hartford, Housing and Urban Development Secretary Shaun Donovan reiterated the reality that not all troubled homeowners will be saved by the government foreclosures program developed by the Obama administration.

The government foreclosures program has eligibility requirements that borrowers need to meet before they can avail of loan modification or loan refinancing schemes. Under the loan refinancing scheme, borrowers must be paying loans owned or guaranteed by Freddie Mac or Fannie Mae, must not have been over 30 days late in their payments within the last 12 months and their loans must be about the same or less than the market value of their homes.

Under the loan modification scheme, borrowers must be living in their homes; their loans must not be higher than $729,750; the loans must have been taken out before January 1, 2009; and must have valid reasons for struggling to pay the mortgage loan.

Donovan said some homeowners that do not qualify for the government foreclosures program should explore other options that do not bring them to foreclosure. It is not reported if Donovan mentioned short sales, but he referred to options that do not damage credit records, that allow borrowers to sell their houses more quickly, that prevent them from going into foreclosures and that allow them to have a fresh start.

The Association of Community Organizations for Reform Now and other advocacy groups have been campaigning for extensions of moratoriums on private lender and government foreclosures until the proposed reform on the authority of judges to order mortgage modification is resolved.

However, many other groups are opposing the bankruptcy reform proposal, saying that taxpayers should not bear the problems of homeowners who want to stay in homes they could not pay. They argue that delaying foreclosures and evictions would just delay the restoration of housing market stability.

In the Hartford forum, Donovan was accompanied by Senator Christopher Dodd. Donovan has been traveling to cities across the country to take a look at the impacts of foreclosures homes and how the government foreclosures program is being implemented.

Secretary Donovan and Senator Dodd are expected to also visit Bridgeport and New Haven, two cities contributing large numbers to total Connecticut foreclosures.

Donovan’s explanations on the government foreclosures program were intended to respond to both sides of the debate on the use of taxpayer money to save homeowners who are described by other groups as irresponsible or reckless borrowers who took out mortgage loans they cannot afford to pay.

In February, almost 3,000 homes in Maryland received foreclosure filings, bringing total Maryland foreclosures to 12,977 housing units. In the city of Baltimore, neighborhood revitalization efforts in the past several years are being destroyed by the rising number of abandoned foreclosed properties being added to foreclosure listings.

Nationwide, as large numbers of people lose their jobs, large numbers of homes are also added to foreclosure listings.

The loan modification and loan refinancing schemes of President Obama’s foreclosure prevention program have been launched in March, but many mortgage lenders have not yet implemented the program. Many banks have not yet integrated Obama’s Making Homes Affordable schemes into their computer systems and have not yet trained their staff to respond to requests for loan modifications.

As foreclosure listings advertise bargain-priced homes and as neighborhood suffer from abandoned bank foreclosed houses, hopes of recovery seem bleak.

Some analysts are now proposing more aggressive actions by the federal government to force lenders to undertake loan modifications. They are even proposing the creation of a federal agency patterned after the Home Owners’ Loan Corp., which was created to respond to mortgage debt problems during the Great Depression.

Banks which have been keeping many forclosure houses from foreclosure listings in the hope that home prices recover are now realizing that they are instead losing more. Many of the foreclosed houses are being vandalized, further reducing their values. Aside from the foreclosure costs and legal fees they pay, banks also spend some more money to maintain foreclosed properties, forcing banks to rethink their strategies regarding foreclosure properties.

Federal officials need to look at the apparent success of the Federal Deposit Insurance Corp.’s experimental loan purchase program. Recently, the FDIC helped an alliance of investors acquire over $560 million mostly delinquent home loans at a big discount and then resell them to the homeowners at bargain prices to prevent their houses from being added to foreclosure listings and to enable them to keep their homes.

But politicians are not so enthusiastic about supporting proposals to force banks to sell their foreclosed properties at a discount for subsequent resale to distressed homeowners at bargain prices. Many Americans are questioning the idea of spending taxes paid by responsible Americans to cover the financial recklessness of irresponsible Americans.

In a recent nationwide survey, only 46 Americans in every 100 support the use of taxpayer money to save Americans from losing their homes to foreclosure listings.

After President Barack Obama arrived from his first trip to Europe as U.S. president, he spoke with reporters and encouraged Americans to take advantage of the falling mortgage rates and the government foreclosures program that includes loan modification and refinancing options.

Obama said there are about 7 to 9 million Americans across the nation who could save up to $2,000 a year by applying for loan refinancing or loan modification under the government foreclosures program.

Among the people who were with Obama while he met with his advisers were a group of homeowners who had reduced their monthly payments by taking advantage of the government foreclosures program and the dropping mortgage rates.

Obama said his advisers have estimated that the average household can save about $1,600 to $2,000 annually from their mortgage payments if they refinance under the government foreclosures program.

The president also advised homeowners to visit the MakingHomeAffordable.gov web site and check the options available and check if they were qualified for mortgage refinancing.

In addition to the government foreclosures program launched in February, President Obama also announced that his administration is setting up additional measures to help other groups of homeowners who are in greater danger of losing their homes to private lender and government foreclosures.

Meanwhile, in support for Obama’s statements, Housing and Urban Development Secretary Shawn Donovan said mortgage rates for housing loans are expected to continue decreasing from their already low levels. He said the declining rates will help more homeowners to refinance their loans.

In the president’s talk with reporters and advisers, he cited the key role of the housing sector crisis in the national economic downturn. He reiterated the adverse economic effects of housing values that shoot up beyond manageable levels, the lack of financial regulation that could have controlled the use of complicated securities packages and mortgage practices that took advantage of homeowners.

The president described how the collapse of the housing market led to further drops in home values and devastation of the financial markets. The resulting private lender and government foreclosures continued the unending cycle of market collapse and financial sector devastation.

During President Obama’s trip to Europe, he met with heads of state about working together to find solutions to the economic crisis battering nations worldwide.

The John Hancock Tower has been one of the landmarks of the Boston, Massachusetts skyline. It has been designed by architect I.M. Pei and finance by Broadway Partners.

The last quarter of 2008 will be recorded in U.S. history as the bleakest quarter in terms of private and government foreclosures since the Great Depression. It will also go down in history as the worst in terms of national income, production output, corporate profits, household income, wealth and job growth.

The latest effort of the federal government to revive the ailing housing market by reducing the number of repo homes has failed to meet industry expectation.

Data from RealtyTrac showed that bank and government foreclosures notices were received by over 2 million distressed homeowners in 2008. In January 2009, bank and government foreclosures reached 72,694 while pre-foreclosure filings were reported to be about 166,860.

You would think that with the growing number of foreclosure homes everyday there is a never ending supply of low-priced houses for every American family. But not for working poor renters in the Washington area.

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.