Archive for the 'Foreclosure Help' Category

A public hearing will be held at the Legislative Office Building in Stamford, Connecticut to discuss the plan to release and distribute about $3.6 million federal economic stimulus block grants to several cities and towns to help them purchase and rehabilitate properties on listings of bank owned homes.

The plan for Small Cities Community Development Block Grant, announced by Governor M. Jodi Rell, is designed to help cities and towns rehabilitate their neighborhoods severely affected by the foreclosure crisis.

Rell explained that the stimulus funds will allow several communities to purchase and renovate properties on listings of bank owned homes. The renovated properties will then be resold to low and moderate income buyers at affordable prices.

The funding can also be used by municipalities to upgrade infrastructure on neighborhoods blighted by foreclosed properties, such as streets, sidewalks, sewer and water lines.

According to Rell, the plan is a sound investment that will help house families in need of affordable housing and revive the economy of neighborhoods.

She added that the stimulus money, combined with the almost $25 million in Neighborhood Stabilization Program funding, will greatly help in supporting and making investments in communities at risk of deteriorating as the foreclosure crisis continues to pose a threat to the country’s economic stability.

Meanwhile, Rell pointed out that restoration of properties purchased on listings of bank owned homes should be done in such a way that it will promote energy efficiency. Additionally, infrastructure should also be upgraded to promote conservation, small growth and energy efficiency.

In line with the energy efficiency advocacy of the her government, Rell suggested building more bus stops in communities to promote mass transportation, energy-saving street lighting and bicycle lanes.

Under the block grant program, a recipient can only receive a maximum of $750,000 and the deadline for spending the total amount is on September 30, 2012.

The Small Cities Community Development Block Grant is set to give $3,616,527 to Connecticut under the American Recovery and Reinvestment Act of 2009 (ARRA).

The Department of Economic and Community Development’s (DECD) Small Cities CDBG-R Allocation Plan has proposed to award funds to buy and rehabilitate properties on listings of bank owned homes to cities and towns of Bloomfield, Ansonia, Enfield, East Haven, Naugatuck, Killingly, Shelton, Plainfield, Windsor, New Milford, Wallingford and Torrington.

In an effort to reduce government foreclosures, the Federal Housing Administration has tightened its screening process for mortgage brokers who are allowed to originate FHA loans.

Housing officials contend that in the past, many mortgage brokers enticed borrowers to take out risky mortgage loans and higher loan amounts to increase their sales commissions. Because a number of these loans were insured by FHA, the number of government foreclosures significantly increased when the borrowers defaulted.

Since 2007, the HUD, which supervises FHA, has taken over 110,000 units in government foreclosures. As of May this year, over 50,000 government foreclosures are being held by federal agencies that have housing programs.

Mortgage brokers who want to work with FHA are also now required to get approval from the HUD when they originate FHA loans. In the past, mortgage brokers could refer prospective buyers anytime to lenders and then charge the borrowers for fees.

In addition, brokers who had been convicted of originating fraudulent mortgage loans can no longer take part in any FHA loan program.

However, William Apgar, adviser to the mortgage finance secretary at HUD, warned that there are probably unscrupulous brokers who have gone through the FHA screening processes successfully. He said that in the past, many companies and not their employees were penalized for fraudulent lending.

Apgar said that there are already 13,000 mortgage brokers with FHA licenses.

FHA loans are preferred by first-time homebuyers because these loans are designed for borrowers with lower credit scores and less money to pay down payments. FHA also charges lower interest rates. During the first week of June, the rate for fixed-rate 30-year loans was 5.5 percent.

In the past, many borrowers ignored FHA loans because they could get subprime loans more easily from other lenders without down payments and without FHA insurance premiums. In retrospect, this fact worked in FHA favor because if more borrowers took out FHA loans in the past, there could have been more government foreclosures.

Now that risky adjustable mortgage loans are no longer offered by most banks, more subprime borrowers are applying for FHA loans.

Since May last year, approximately 20 percent of all mortgages originated have been FHA loans, compared to only around two percent in 2006, based on HUD data.

Even so, borrowers are warned by Richard Tracy, a top official at the Connecticut Society of Mortgage Brokers, to make sure their lenders or brokers are really accredited by FHA. They should visit their state banking agencies or the official HUD web site to check if their lenders or brokers are licensed to make FHA loans. Government foreclosures are lessened if FHA borrowers and lenders follow mortgage regulations.

The Arends couple, Barb and Larry, have three adopted children who have disabilities. In 2007, when they learned that they won a handicapped-accessible house in a contest, they were very ecstatic. They regarded the house as a fulfillment of their dream for their three handicapped children not knowing that it is on bank foreclosure list.

On March 18, 2007, the couple and their children moved into the Hope House, as it came to be known, and city leaders, volunteer workers and friends gave the family a very emotional welcome.

Two years later, they were shocked to learn that the one-story house, which they won in a contest sponsored by the Independent Luxury Benefit Fund, is on bank foreclosure list. This fact puts the future of the couple’s children in jeopardy.

The Independent Luxury blamed the mess on the collapse of the housing market and the dire financial situation of the Arends couple.
But the couple and officials of the city, which helped publicize the contest, feel that the Independent Luxury fooled them.

Larry questioned how someone could give away a property that is on foreclosure. He said that they should have hired a lawyer to look at the paperwork but they never did because they trusted the organization.

City officials have filed a complaint against the Independent Luxury with the attorney general’s office in Minnesota. Assistant city administrator Heidi Nelson said that it was understood that the house was donated to a couple and their children.

Explaining the mess, Patrick Schmeichel of the Independent Luxury, said that the organization went above its call of duty by helping the Arendses build the Hope House and repairing the couple’s previous property so that they could sell it. He added that the Hope House would not have been included on the bank foreclosure list if the economy did not deteriorate.

The Arends couple said that Schmeichel volunteered to hold the mortgage of the property in trust for about 10 years. After the 10-year period, the property would be turned over to them. They diligently paid their utilities, home insurance and property taxes.

Meanwhile, in order to help the couple deal with their current predicament, city officials referred them to foreclosure rescue programs.

The couple is hoping that they could save their home from bank foreclosure list, which is scheduled for auction on June 25. If not, they will have to move out of the house six months after, which Barb said is very hard to do considering that it would be Christmas Day.

Renters of homes on Bank Foreclosure List need not worry anymore of sudden eviction because the Nevada Legislature has passed AB140, which is part of the state efforts to curb the impact of the foreclosure crisis.

One of the most disappointing bank owned foreclosure prevention program initiated by the federal government is the Hope for Homeowners. Since it was launched eight months ago, the program has managed only to help just one distressed homeowner secure a loan with affordable payment terms.

The Term Asset-Backed Securities Lending (TALF) will be expanded to residential mortgage-backed securities (RMBS) as part of the U.S. Federal Reserve’s effort to stop bank owned foreclosures and recession. The TALK expansion also aims to eliminate devalued bonds in banks to increase lending and boost prices.

Last week, the Obama Administration announced an expanded version of its $75 billion Making Home Affordable program as part of an effort to reduce the number of forclosed home. The enhancement offers incentives to lenders who allow a short sale. The original version of the program only focused on giving incentives to lenders who modify loan terms to make them affordable for distressed homeowners.

An estimated total of 750,000 jobs would be developed or saved by August under programs launched by the administration of President Obama to fight the effects of foreclosures.
According to President Obama’s Council on Economic Advisers, the American Recovery and Reinvestment Act, which was funded by $787 billion, will save or develop thousands of jobs [...]

FICO, previously Fair Isaac and Co., has launched a Web site that aims to help lower bank foreclosed home rates in the United States. The FICO Web site is welcomed by industry experts who are concerned over companies that fail to fulfill their promises to help distressed homeowners arrange loan modifications.

Bargain-priced homes in foreclosure listings are attracting first-time homebuyers nationwide.