In Port St. Lucie, one of coastal towns in Florida littered with abandoned subdivisions and foreclosed houses, about one in five home loans was provided by the USDA, according to local real estate professionals.

In Menifee, California, where many mortgages were taken out through the USDA housing program, record foreclosures have been posted because distressed borrowers could not sell their homes to avoid foreclosure.

The program that has driven the sharp increase in USDA home loans is the USDA guaranteed housing loan program launched in 1949 and rejuvenated by the Obama administration with $10.5 billion this year, a substantial increase from the $6 billion provided by the Bush administration last year.

Because of the sharp increase in funding, builders and lenders took advantage of the easy requirements of the program, resulting into almost 120,000 home loans in the first 9 months of 2009, a staggering increase from only around 35,000 in 2007.

According to interviews with borrowers, they are attracted to the program because they do not need to shell out down payment. This easy requirement however has resulted into more government repo homes at USDA.

Analysts such as Daniel Oppenheimer of Credit Suisse said the relaxed lending standards are the same standards that led to the current housing meltdown and added that the USDA no-down loans should be called USDA subprime loans.

Among the builders helped by the program is D.R. Horton. About 64 percent of its total home sales were sold through federal loan programs, including loans guaranteed by USDA. Jim Belfiore, head of Phoenix-based Belfiore Real Estate Consulting, said every builder is trying everything to survive the downturn, so the USDA home loan program is a great opportunity for them to make sales.

The builders and lenders, just like during the boom, have been filling their advertisements with enticing words such as absolutely zero-down and 100-percent financing.

In response to critics, builders and the USDA explained that they apply strict underwriting requirements and evaluate borrowers’ income, cash flow and credit thoroughly.

Joaquin Tremlos, acting head of the USDA home loan program, said the department’s loan portfolio has a low delinquency rate. He reiterated that the department has not relaxed its guidelines leading to more government repo homes as reported in the media.

Lichtenstein, who studied the foreclosure trend in the county and statewide since February 2008, said that foreclosure appears to be worsening. Data compiled showed that local foreclosure activity continues to increase and affected modestly priced houses.

She said that she was surprised to learn that the foreclosure problem has disproportionately affected poor and middle-income homeowners. What is happening in the Tuscaloosa county is in contrast with other parts of the country where foreclosure spared wealthy homeowners.

Data showed that over 1,000 houses went into foreclosure in Tuscaloosa since February 2008 and the highest assessed value on repo homes for sale was about $300,000.

Most properties located in higher-end communities have been spared from foreclosures, with the problem occurring mostly in Alberta, Holt and outlying parts of Tuscaloosa. Many homeowners in middle-class subdivisions such as Lake View’s Million Dollar Lakes lost their homes to foreclosures.

According to industry experts, the assessed value of foreclosure houses in the county were between $58,000 and $300,000, and the median price was about $124,923. Experts explained that the median price indicates that 50 percent of the houses were assessed for more and the other 50 percent were assessed for less.

Lichtenstein said that she started to study the foreclosure trend in the county in 2008 after she learned from a neighbor about some foreclosures in the NorthRiver Yacht Club community. The information was not true but she started compiling foreclosure data and analyzing it with the help of Brian McKean, University of Alabama School of Social Work grant administrator.

According to data analysis, 58 percent of people whose properties were repossessed were married couples. And the average time that they stayed in their foreclosure houses was only about four years. Data also showed that the amount of time they stayed and owned their houses when they were foreclosed ranged from a year to almost 31 years.

The study also showed that foreclosure continues to spread across the county. Since February 2008, about 55 houses have been repossessed every month in Tuscaloosa. The highest number of repo homes for sale was reported last June with 93 foreclosed homes.

Some lawyers involved in the lawsuit filed by Deutsche Bank National Trust Co, against Deltona homeowner, Vincent Virgilio have asked Doyle to remove himself from the case. According to reports, Doyle told Farzard Milani, one of the bank’s lawyers, that he would not perform his job if Milani will just sit in his Fort Lauderdale office, smoke Cohiba cigars and drink lattes.

Doyle reportedly told Milani that he will do everything to have him disbarred. Milani’s lawyers claimed that Doyle made ethnic or racial bias inferences against Milani.

Doyle explained that an estimated 20 percent of homeowners who are at risk of foreclosures were making an appearance in court while some lawyers representing the banks were not. Non-appearance of lawyers resulted to delayed or canceled hearings.

He said that distressed homeowners were angry because they were losing their properties to foreclosures and they leave their work early to attend a hearing that often was canceled or delayed.

Doyle has allowed lawyers representing lenders from across Florida the option to make their argument by telephone. However, in some cases, lawyers would not answer his calls. He explained that many law firms representing the banks hire neophyte lawyers who will handle the foreclosure cases for a fixed, flat fee.

He added that these neophyte lawyers are trained not to give importance to foreclosure hearings and missing one is not such a big deal. He explained that missing just one hearing would mean granting of relief against their clients.

After the controversy with Milani, Doyle decided to stop holding hearings by telephone, affecting the almost 3,000 pending cases of foreclosures on his docket. Milani’s lawyers filed a request for Doyle’s removal from the foreclosure case before the Fifth District Court of Appeal. They claim that they have the evidence showing that Doyle dislikes Milani, adding that the judge’s comments caused the lawyer to be concerned that he will not get a fair judgment.

In the case, Deutsche Bank is seeking about $177,700 for the mortgage owed by Virgilio on his Deltona house. According to court records, Virgilio claimed that he is a person with good credit standing but was forced to miss payments because he lost his job.

Especially in areas such as Santa Monica, Pasadena and Culver City, demand exceeds supply in the bottom market for repo homes.

Real estate agent Christopher Hain has an explanation why many homebuyers are unable to buy homes in a market supposedly overloaded with cheap repo homes. He contends that buyers are not increasing their bids because they are afraid the market has not bottomed out and they could be paying too much.

Burt Slusher, a real estate investor, observed that many buyers are offering unrealistically low bids. He suggested that home buyers should focus on inventory of existing homes and repo homes in fine areas.

Another agent, Phyllis Harb, complained that many home buyers are relying too much on published housing statistics, attending open houses and then making offers 20 percent below the asking price.

According to research service MDA DataQuick, around 20,000 houses in Southern California were sold in March, with most of the sales occurring in San Bernardino and Riverside counties, where large numbers of California foreclosures occurred. Across Southern California, sales of repo homes comprised 55 percent of total home sales deals in March.

In Los Angeles County, the cheaper homes, including repo homes, dominated sales in March, with 2,871 houses priced under $300,000 sold.

For houses priced over $1.2 million, there were only 202 units that got sold.

For the middle range – homes priced between $400,000 and $800,000, less than 25 percent of total deals were sold.

Among frustrated Southern California homebuyers are Silver Lake pizza business owners Bunny and Nicky DeMarinis. They said they have inspected about 50 homes already, but they have not bought one. They made a $1 million offer for a conventional house in Los Feliz, but despite lots of repairs that need to be done on the property, the seller refused to budge from the $1.7-million listing price.

Real estate agent Tracy King said that prices of homes, including repo homes, are extremely local, and that a published regional median price does not have an effect on local prices.

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Pre-foreclosure filings last October were 10% down from August levels and 7% down from September. These include notice of default and foreclosure auctions. With only 84,286 repossessed properties during this month, the level dropped dramatically by 22% since September. This trend is the same throughout half of American states according to the U.S Foreclosure index.

Although the current financial crisis have rolled across most of the U.S., pre-foreclosure filings and repossessed houses where mostly concentrated in certain states, cities and counties. These areas include Detroit which was hard-hit by recession and unemployment. The case is different with other states like California, Florida and Nevada which where victims of property speculation in prices and affordability.

The new President-elect has placed the current economic crisis at the top of his agenda when he takes charge in January. Included in this program is this lingering real estate crisis where Obama promised a 90-day moratorium on foreclosures. However, experts say that it will still be up to individual states to impose their own regulations.

While direct intervention by the government regarding foreclosures is still debatable, major banks and financial institutions have starting working out mortgage restructuring and putting monthly payments down to affordable levels. This means cutting down interest rates, extending loan terms, and reducing balances.

Although the last two months have shown good figures and great signs of recovery for the housing industry, work in this area still has a long way to go. Experts say that these figures may not yet be considered conclusive, although it shows sign that the nation is heading in the right direction.

Most of the repossessed homes are listed in foreclosure listings taken out by banks, private lenders, HUD and other financial establishments. Repossession of homes is actually the initial step towards foreclosure. There is always a pre-foreclosure period during which the homeowner can pay the loan amount and get the home back. Most people are unable to pay during this period or are unaware of the different options available. As a result a prime property becomes a part of the increasing number of bank foreclosures for sale.

December 2005 had recorded some of the highest foreclosure filings so far with and November 2005 had 114.7% more filings in December 2005. Around 6,455 homes went into foreclosure in Georgia in 2005, which is a huge number. The current situation is not good as far as repossessed homes are concerned because the numbers are increasing rapidly. On one hand it is a good sign for investors and first time homebuyers who can find the property of their choice for a bargain price but it is also a sad situation for current homeowners who are losing their homes.

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