Archive for the 'Foreclosure Crisis' Category

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.

It has been observed that Treasury Secretary Henry Paulson announces a new economic recovery program every now and again for almost a year because so far, no plan was successful enough to stop the surge of foreclosures in the country.

The continuous increased in foreclosures has been blamed for the losses in the financial industry and the drastic decline of market values.

CRL President Michael Calhoun points out that MBA’s data only highlighted the extent of the crisis in the housing market. He calls on the Bush Administration and the incoming Obama Administration to implement systematic programs designed to offer relief and solace to homeowners so they may not be forced to vacate their homes.
It is suggested that the Congress adopt a plan that will involve mortgage modification that will help thousands of homeowners quickly and effectively.

The Treasury Department is urged to implement a proposal by the Federal Deposit Insurance Corp. (FDIC) for the federal government to guarantee home loans that have been modified as a strategy to entice investors and loan servicers to enforce such changes.

Meanwhile, the Congress is also urged to implement an action that will lift the rule banning judicial modifications.

The MBA data showed that annual rate of foreclosures in the country reached 2.4 million as of September. With these figures, it is estimated that about 41 million homeowners who live near these distressed homes could experience a decline in home values.

Some states hardest hit by the foreclosure crisis are Arizona, California, Florida, Indiana, Illinois, Michigan, Ohio and Rhode Island.

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.

Putting an end to foreclosures at the present time is not the solution anymore, according to National Community Reinvestment Coalition President John Taylor.

According to Taylor, 10,000 properties everyday are being considered as foreclosed homes as compared to 1,000 properties per day at the time of the Great Depression.

In addition, he said that Litton Loan Servicing, Citibank and Bank of America could not modify mortgages considered as sub-prime.

He stated that for most banks, allowing mortgages to end up in foreclosure would be a trouble-free solution on their end because they will recover all losses to the investors instead of adjusting a loan in which they could lose some money.

The banks do not realize that they may initially lose some money, but will be on continuous flow when a mortgage could be compensated regularly once again.

The standard amount of loss in foreclosure is about $100,000 according to Taylor. The U.S. government has to obtain from well-known fields or through an offer that will not be declined; otherwise all hard work will be meaningless.

In addition, having the Obama administration to approve will be a great accomplishment.

Ex-Federal Reserve director Alan Greenspan is in firm denial to let the banks divulge anything except only for common information on such accounts like loans for a small business which, according to Taylor, is discouraging.

Greenspan wanted the banks to become ‘color blind’. Taylor said that if a person approached them for business-type of loan, they are making that person not liable because they are not getting all information.

If this kind of situation continues to occur, then it looks like Illinois foreclosure would still have a long way to go before it goes back to its normal state once again.

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 $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 [...]

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.