Archive for the 'States' Category

Few distressed homeowners have participated in Connecticut’s bank foreclosure mediation program despite the high success rate of the initiative.

The state’s mediation program was part of the comprehensive mortgage relief law initiated in Connecticut last year. The mediation program allows troubled borrowers to meet with their lenders to workout solutions to avoid foreclosures and make their accounts current.

By the end of May, the total foreclosure mediation cases completed across the state reached 2,932. Out of these cases, 1771 or 60 percent have successfully reached settlements which allowed families and individuals to remain in their properties.

According to data released by Connecticut’s judicial department, 41 percent or 1,224 homeowners who were able to avoid foreclosure received loan modification option from their lenders.

Furthermore, 397 homeowners chose to leave their distressed properties but worked out an agreement with their lenders which allowed them to pay off the balance of their loans either through deed in lieu or short sale. Unsettled mediation cases totaled 764 or 26 percent of the total numbers completed in May.

Industry analysts noted that despite the success of the state’s mediation program, only 35 percent or 6,575 of the 18,702 eligible borrowers have actually taken advantage of the initiative. Analysts said that the low rate of participation may be due to the lack of awareness of distressed homeowners about the state’s mediation program.

But state lawmakers are hopeful that the trend would soon change, expecting a dramatic increase in participation rates after they have passed a law making mediation mandatory for all foreclosure cases filed after July 1.

Bank’s committee co-chairman Senator Bob Duff is hopeful that the mandatory mediation legislation would benefit more distressed homeowners and help lower the foreclosure rate in Connecticut.

Industry analysts said that the state’s mediation program will benefit everyone starting with homeowners who will be given a chance to remain in their properties while lenders and banks will avoid the cost and trouble of the foreclosure process.

Additionally, communities will be spared from property value declines and prevent the rise in crime which are common in areas with a high number of abandoned and vacant, foreclosure homes.

Meanwhile, the state government also offers two foreclosure prevention programs for distressed homeowners. The first is the Emergency Mortgage Assistance Program (EMAP) which provides fixed-rate mortgages to homeowners at risk of losing their properties to foreclosures.

Another is the Connecticut Families program which so far, has provided over $20 million funds to financially strapped families in the state.

Oklahoma has not been clobbered by foreclosures as sharply as other states because real estate prices in the state did not soar to outrageously high levels during the housing boom.

As a result, home prices in the state are holding up despite increasing job losses and despite expectations of a lot of foreclosed for sale units in the coming months.

Analysts said that foreclosures will arise from the failure of out-of-state investors who came to Oklahoma in droves during the last months of the housing boom to buy cheap rental homes. Many of these investors have not been able to pay their loans because of lack of renters and declines in rents.

In Oklahoma City, home prices have dropped only slightly. The federal tax credit offered to first-time home buyers helped significantly in holding up home prices, as home buyers were aided in their down payments.

In the past years, the energy industry has been propping up Oklahoma’s economy, but the recession has idled oil rigs and caused energy companies to cut jobs and operations.

According to Oklahoma real estate analysts, average home prices are expected to decline in several cities in the coming months in various degrees. Home prices in Oklahoma City, the biggest city in the state, are predicted to drop by an average of 4.8 percent.

Tulsa is predicted to have the smallest home price decline, as it had been able to resist price declines in 2008. The city is expected to suffer a 4.2-percent price decline during the rest of the year.

Additionally, there were fewer homeowners who took out option adjustable mortgage loans and other subprime loans in Tulsa, according to analysts. This fact will help prevent foreclosures that push down home prices.

In Lawton, the inventory of high-priced homes for sale is rising because of the declining level of consumer confidence among buyers in the higher-priced market. Another reason is the hesitation of banks to lend jumbo loans, drying up lending for buyers who want to move up. Among Oklahoma’s large cities, Lawton is expected to suffer the biggest price decline, which is 5.7 percent.

Residents of Edmond were largely protected from the start of the housing meltdown, having one of the least foreclosure rates in the nation. However, analysts predicted that the city will experience an average home price decline of 5.2 percent largely because of declines in the upscale portion of the market.

A growing number of homeowners in St. Louis, Missouri owe more mortgages on their houses than their total market value. This trend has been bothering industry analysts who noted that despite the affordable housing cost in the area, many borrowers are seeing their properties losing equity.

Analysts pointed out that negative equity is a precursor to more bank foreclosures as it is the tendency of troubled borrowers to walk away from their homes with negative equity rather than spend more money by keeping their accounts current.

According to results of a market study, 29.5 percent of homeowners in St. Louis were underwater, or their mortgages are more than the worth of their properties, in the second quarter of 2009. This means that 170,871 homeowners are at risk of foreclosure.

Additionally, 6.5 percent or 38,000 of homeowners are on the brink of getting into the negative equity position, meaning that they are within five percent of underwater level.

Industry analysts said that negative equity is becoming a serious problem in the housing market. They pointed out that negative equity positions are a major contributing factor to the growing foreclosure rate not just in Missouri but in the whole country.

They explained that negative equity, together with unemployment, will continue to be dominant driver in the mortgage market as it always leads to more foreclosure properties in the event that borrowers experience some economic problems such as illness or job loss.
They said that foreclosure risk will continue to rise until unemployment declines and negative equity recedes.

Analysts took consolation on other developments in the housing market. They noted that home prices appeared to be leveling off. This means that mortgages that are not underwater will have less chance of getting that way.

Meanwhile, analysts pointed out that the problem of negative equity and foreclosure is much worse in some areas in the country. In Nevada, two in three homeowners are underwater, and almost 50 percent of properties with loans in Florida, Arizona and Michigan having negative equity.

Nationwide, the number of properties with negative equity dropped slightly from 32.5 percent in the first three months of this year to 32.2 percent in the following three months. Additionally, 6 percent of all properties nationwide with loans are nearing the negative equity position.

Lane County in Oregon saw its foreclosure activity jumped last month. Filings for bank foreclosed home were given to 221 homeowners in July, a jump of 64 percent compared with last year.

Colorado counties of Garfield and Mesa saw their bank foreclosed home listings jumped to record levels in the second quarter of 2009.

Foreclosure actions that have been sidelined because of an Illinois law that gives ample time to distressed homeowners to work out their troubled loans are starting to move in the forefront.

A look at the foreclosure rate increases in Florida for the last three years would make one conclude that the crisis is not slowing down and will continue to bring more pain to homeowners in the area.

The site of the high-end waterfront residential development project located on Lake Travis, Texas has been listed for foreclosure. According to industry experts, the property is the second major foreclosed bank owned land that happened in Central Texas in less than a month.

Interests among foreign investors to buy bank foreclosures for sale in South Florida have intensified as investing in the area’s real estate market offers opportunity for them to become a U.S. citizen.

Just like the other islands of Hawaii, Kauai Island also depends largely on tourism to shore up its economy. Most of the island’s workers are employed by enterprises that cater to tourists and travelers that visit the island.