Archive for the 'States' Category

Counselors at the Washington County Housing and Redevelopment Authority (HRA) in Minnesota are helping distressed homeowners avoid bank foreclosure houses.

These counselors are experts in the process of foreclosures. They know the exact procedure that lenders adopt to foreclose on a homeowner’s house and the approach they use to determine whether a loan is worth modifying or not.

Washington County HRA executive director Barbara Dacy said that the agency is also offering encouragement to distressed homeowners while trying to help them avoid foreclosures.

The HRA counseling service is provided for free to distressed homeowners because it is funded by federal and state funds. Credit-counseling services of for-profit organizations charge a fee of as much as $3,000.

The counseling service started its operation in February 2008 and it was only a matter of time before the agency was swamped with workload due to growing foreclosure and unemployment.

Since last year, the Washington County HRA received more than 700 calls from distressed homeowners. Out of this total, 535 turned into actual cases, and 113 homeowners were able to save their properties from foreclosures through the help of HRA counselors.

They were also able to help 97 homeowners who lost their homes to foreclosures find alternative living arrangements. Meanwhile, nearly 300 foreclosure cases were suspended by homeowners or they failed to make follow ups.

Dacy said that saving a home from foreclosures requires a lot of cooperation and paperwork from homeowners, including management of their personal finances.

The counseling service starts when distressed homeowners call the HRA offices. Typically, distressed homeowners seek help if they are a month to four months delayed on their mortgage payments.

According to industry experts, some homeowners who are struggling to pay their mortgage payments are trying to be proactive to stay current on their accounts. Some are already on the brink of foreclosure. They advise homeowners to seek help immediately so that they will have more options.

In cases that require intensive work, the screeners will schedule a meeting for counselors and homeowners. They will also examine the homeowners’ budget and talk with lenders. HRA counselors said that the process of helping homeowners avoid foreclosures requires perseverance and patience, adding that it could take from two months to nine months.

A study showed that many Illinois residents are living less financially comfortable today than they were two years ago.

DuPage County launched a program to help people pay their utility bills. So far, the program was able to process about 25 percent requests for help, higher than the total figures last year when the unemployment rate was still manageable.

Recently, DuPage County Board members gave approval for the distribution of over $3.6 million for a program that will help struggling residents pay their living costs. Included in the allocated funds were energy assistance grants amounting to $260,580. Illinois Home Weatherization Assistance Program’s grant fund of $2.3 million, partial funding of $500,000 for an administration center for the Public Action to Deliver Shelter (PAD) and assistance for first-time buyers of foreclosure homes.

The assistance program for first-time homebuyers is made possible through the county’s coordination with the DuPage Homeownership Center. The DuPage Homestead Program seeks funding sources to provide home loans with low interest rates, according to Homeownership Center executive director Dru Bergman.

The program also aims to make it easy for families to live in DuPage. Since 1992, the program helped over 500 families purchase homes. Bergman said that so far, only one homeowner who purchased his house under the program lost it to foreclosure.

However, the Homeownership Center noted a growing number of people losing their homes to foreclosures. Before the mortgage crisis started in 2007, an estimated five families would seek help monthly at the foreclosure counseling service of the county. In 2006, around 54 homeowners received foreclosure counseling.

But since then, the number of homeowners seeking foreclosure counseling went up dramatically. From January to August this year, there were already 374 troubled homeowners who sought the help of the center. Bergman noted that some homeowners who seek help were victims of bad mortgage loans.

Meanwhile, the county’s Low Income Home Energy Assistance Program was able to help about 10,881 since it started last September up to May. The figures represented an increase of over 2,000 homeowners compared with the previous year.

The county was able to distribute nearly $4.65 million, thanks to a 34 percent federal funding increase. County officials said that income eligibility requirement for the program will be increased to 200 percent from 150 percent of the poverty line which is $33,072 annually for a four-member family.

Industry experts and analysts agree that the federal government’s $8,000 tax credit for first-time homebuyers have helped tremendously in lifting sales of bank foreclosure homes in Wisconsin.

Many potential homebuyers flocked to the market not only to take advantage of the tax credit but also the reduced home prices and low interest rates. These factors helped entice many people to purchase their first houses and help trim down the number of foreclosure properties that have been pulling home prices and values.

Industry analysts and experts said that the tax credit had made an impact on the local and national home sales. For example, in Milwaukee, tax credits helped lift sales for two succeeding months as potential homebuyers hurry to find a foreclosed home and close a sale before the December 1 expiration of the tax credit.

However, analysts are questioning whether the momentum could be sustained even after the tax credit expiration.

They pointed out that home sales may have picked up locally and nationally, but prices remained at the lowest end. Nationally, median home prices dropped below the normal level, a little more than twice the family income. The home price trend is influenced by the sale of a great number of bargain-priced starter homes.

The average home price in Milwaukee dropped to its 2004 level. Analysts said that the contrasting movement between home sales and prices indicated a return to the normal market conditions. They said that backlogs of unsold properties are starting to dwindle as buyers try to take advantage of tax credit and reduced mortgage rates.

Furthermore, industry analysts said that the dwindling of home inventory is an important step towards price stabilization, adding that declining inventory indicates home values is nearing stabilization.

On the other hand, affordability has dramatically increased with the drop in home prices. But the growing unemployment rate is threatening the financial capability of people to purchase properties.

The nationwide unemployment rate was 9.7 percent while jobless rate in Wisconsin was 8.7 percent. But economists are expecting unemployment to level off in the middle of 2010. Unemployment has forced many homeowners to miss their monthly mortgage payments which eventually led to foreclosures. Last month, foreclosure filings were made on 2,729 Wisconsin properties, an increase of 10.9 percent from the previous month and 52 percent compared with 1,793 properties in July 2008.

The 64-unit affordable apartment complex, Fox Run in Fraser is at risk of becoming a bank foreclosed housing complex due to nonpayment of over $3.75 million loan it took out from Colorado Housing and Finance Authority (CHFA).

Industry analysts projected the rise in the number of home loans that are two months delayed in payments or are in some stage of foreclosure process before the end of 2009. They expected mortgage delinquency rate in the state to jump to over 14 percent.

The continuing increase in the number of bank foreclosure homes has been haunting the Rockland towns of Clarkstown, Haverstraw and Orangetown for some time now.

Greenvest LC, the largest private land developer in Loudoun County, Virginia has defaulted on its almost $130 million loan. This put majority of the company’s real estate holdings into bank foreclosures which will be auctioned off at the county courthouse.

Loan delinquency and bank foreclosed home rates in the state of Connecticut rose to their highest levels in 30 years.

The rate of foreclosure in Vermont remains a threat to the state and its economy. Last month, filings for bank foreclosure homes jumped by 14 percent to 1,135 from 996 posted in the same period last year.

Bank foreclosed house sales accounted for majority of all home sales last month in Michigan. In July, 6,452 properties were sold in Detroit, an increase of 18.7 percent from last year’s total sales of 5,436.