Archive for the 'Foreclosure Crisis' Category

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.

A lot of foreclosure plans have been derived by the government, the lenders, and the banks just to help distressed homeowners but it will not do much help anymore. The foreclosure crisis has left homeowners unable to afford loans on any terms, and no bank or federal programs will provide them relief.

Loan modification plans have been proposed to adjust interest rates to drop it at a more affordable level, about 31% to 38% of a homeowner’s gross income. However, this does not help much for those who have so much less to no income at all. Unemployed borrowers have to be assessed on a case-to-case basis first.

Mortgage Bankers Association has reported that about 1.2 million properties have been foreclosed in the second quarter of 2008. Consumer advocates and lawmakers of the Bush administration have pushed banks and officials to do their best to help distressed homeowners.

More foreclosures will lead to further home price declines and a weaker economy, so this cycle has to be broken. Rising unemployment rate has to be stopped as it has already reached its highest level by now at 6.5% in more than 14 years.

2 million more families are expected to face foreclosure in the next two years. A lot of homeowners have been calling for help.

For those with greater possibility of getting a new job with the same income, a forbearance or short-term modification can be offered by the bank. But for those who have trouble in getting new jobs, there are fewer options like a short sale.
The government has to create more jobs to make the economy recover. More jobs would mean less foreclosures and better home prices.

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

Ideally, owners of foreclosed homes are given a grace period of six months to repay their loans and keep their homes. These properties have a great chance of being redeemed just as long as the homeowners know the amount they need to pay.

Unfortunately, because of certain real estate legislation in March 2005, the calculations of liabilities to be answered have been taken from the hands of county registers and passed on to the purchasers of the repossessed homes.

Of course, these purchasers have their own interest to protect. They would not disclose the amount needed to redeem the foreclosed properties so that borrowers would not be able to claim back their mortgaged homes. Original homeowners would complain about the difficulties they encounter in the attempt to contact the purchasers. For families unfortunate enough, they would even be charged more than $200 just for that information.

To address this problem, concerned parties have taken initiatives to push for Senate Bill 1390 – a real estate law that would restore the calculation of foreclosure repayment amounts within the jurisdiction of the government.

With the calculations under the mandate of the county registers, homeowners would have easy access on information necessary to redeem their properties. Only an affordable $50 (or even less) has to be paid.

Based on the Bill, only willing county registers are expected to perform the calculations. Despite the fact that compliance to the Bill is voluntary rather than mandatory, it has not been politically acceptable at the moment.

Nevertheless, hope is not frail. Ample support from the Senators can be obtained with help from the public. With Senate Bill 1390 seeing its way through implementation, a significant number of homes in Michigan shall be saved from foreclosure.

The $700 billion bailout funds, named the Troubled Asset Relief Program (TARP), was promulgated by Congress a few months back in an attempt to lift the country out of its current predicament brought about by the financial crisis. Experts have reported that the root cause of the financial crisis was the increasing foreclosures that resulted from defaults on subprime mortgages.

Logically, people were thinking that the bailout package was intended to “bail out” homeowners in trouble of losing their homes to foreclosures. Treasury Secretary Paulson proved these people wrong.

The first announcement from the Treasury Department was that the fund will be used to purchase securities that are backed by mortgages which basically placed banks in the rut due to the increase in foreclosures. Only a few people supported this decision. The majority, however, was right and Secretary Paulson backed out from this initial decision.
The second announcement, barely a week after the first one, told people that the fund will be used to buy investments from banks and stabilize the financial market. Congress questioned this move, and was expecting that part of the fund will be used to help homeowners prevent foreclosures.

However, Secretary Paulson, with a White House go signal, announced that the fund will not be used as an “expense” and buy-out troubled loans to stop foreclosures. He said that the fund should be used to “invest” instead and defended the administration’s stand in using $290 billion from the TARP fund to purchase no-vote assets from banks. Another $40 billion was already used to salvage the insurance giant AIG. Zero dollars went to homeowners desperate for help on foreclosures.

Several communities, sectors and even legislators criticized the government for their lack of support in providing a direct assistance to homeowners in trouble. Various groups have already approached Capitol Hill and the White House in a bid to urge the government to make use of taxpayer’s money to help these troubled homeowners. All these homeowners can do right now is wait and hope for the best.

In October, hunters have been targeting bargain homes in Broward County, South Florida. Amidst the very challenging mortgages and increasing job losses, buyers never get second thoughts about investing on the much affordable bargains. With the increasing number of foreclosed homes, bargain homes would remain an eye candy for these hunters.
According to Florida [...]

Question: I like to buy a condo unit being sold by the owner who has been trying to sell it for months. He paid $260,000 for the unit and has a mortgage loan balance of $180,000. A mutual friend told me that he might just abandon the condo to foreclosure. I plan to buy it for about $160,000. What should I do? Should I talk with the mortgage bank directly?

A lot of homeowners of foreclosed homes just leave their pets behind, not being concerned with how these pets will survive life without food and water.

Governor Jon S. Corzine has proposed a financial aid program for New Jersey that includes an assistance package for those facing foreclosure.

It has been a year since that government started developing programs on how to remedy the mortgage problems that triggered the current financial crisis. Since then millions of homeowners face foreclosures and unemployment, rendering government programs like FHA Secure and Hope Now alliance ineffective in handling these issues. Taxpayers’ money is being used to salvage financial institutions, and people are now clamoring that it is high time for the government to act on bailing out foreclosure homes.

Just sitting around, as a foreclosed house deteriorates and attracts crime, is a no-no. You can do something to prevent foreclosure-related crimes in your neighborhood. And 10 ways to do it are as follows:

According to Minnesota Homeownership Center, there have been 66,000 homes foreclosed in Minnesota for the three previous years. Most of these foreclosures have actually resulted from equity strippers who cheated homeowners with scams or toxic mortgages. According to the findings of Minnesota Public Radio, there are only a few of these scammers who were given criminal charges. Even worse, only a small number have been labeled in civil suits.