MostlyForeclosures Articles: Online Foreclosure Homes Database

The current year’s third quarter have yielded drop in home prices in for out of five cities in the U.S. This is explained by lots of low-cost foreclosures that flooded the market and the decline of the U.S. housing market.

The National Association of Realtors has said that out of 152 metropolitan areas, 120 have posted drops in median home sale prices, as compared to last year. It has expressed an 8 percent drop from that of the same quarter a year ago.

Foreclosure sales have made up about 40 percent of all the transactions in the third quarter, taking down the median price by 9 percent reaching $200,500.

Besides the decline of home prices, home sales have also declined. But four states have home buyers who have taken the bargain. These states are California, Nevada, Virginia, and Arizona.

As for the areas of Sacramento and Riverside in California, a huge portion of foreclosure sales have taken place in discounted prices since the home prices have dropped from 37 percent to39 percent. These two cities are recorded to have the greatest annual price drops.

What greatly affect the current situation of the housing market are the falling home prices, strict lending standards, and a tough economy. In fact, by the end of this year, RealtyTrac Inc. expects bank-owned properties to reach more than a million. This actually represents almost one third of all the properties for sale in the United States.

On the other hand, economists say that the economy have come into a recession, after more than two decades, and this could be the worst downturn to be experienced.
With the rising unemployment rates, worsening economic conditions, and tightening credits, the number of delinquent loans has increased.

With the continuing rise of foreclosures, the government has seen the need to use some of its funds from its $700 billion financial rescue programs.

Federal Deposit Insurance Corp., the US federal agency that insures bank deposits in the country, has announced its plans to stop the foreseen 1.5 million foreclosure homes mortgage. The agency was reported to have promised to share the losses of lenders or mortgage companies that would offer to refinance qualified home loans.

FDIC said in a statement last Friday that the loan modification program would cost the government about $24.4 billion. The said funds would come from the recently approved bailout program of the US Treasury. The bailout program aims to help the finance industry of the country.

The proposed plan of the agency was announced by its Chairman, Sheila Bair, two days after Henry Paulson, Treasury Secretary, dismissed the government’s proposal of underwriting delinquent home loans. Bair has spent the last weeks lobbying for the agency’s foreclosure prevention plan.

Reports said that most of the money for the bailout program has been given as capital to banks. The said injection of capital was part of the Troubled Asset Relief Program (TARP). In a probable answer to critics of the said move, Secretary Paulson was quoted to have said that the previously proposed program on future foreclosure properties was something that would require the government to subsidize or spend. He said that the TARP move was different. Unlike the program on foreclosures, the money for the TARP is considered as an investment and not a spending.

FDIC, however, still maintained its ground. The agency has published its statement on their official website. FDIC said that indeed, foreclosures may be costly for borrowers, lenders and communities. However, the agency believe that the costs do not change the fact that it is a must for the government to provide incentives to modify the terms of accounts that may eventually lead to foreclosures.

These families lose jobs, lose homes and lose belongings. But they do not lose hope; they survive.

Robin Myer, a 55-year-old mother in Grand Haven, could always do something to feed her daughters, but she could not do anything when the bank refused her partial payments and warned her about foreclosure. Luckily, she found sales agent Mary VanderLaan of Prudential Clyde Hendrick Realtors, who helped her sell her home within two months, before it went into foreclosure.

Myer lost her home and earned nothing from the sale, but she maintained her good credit, making her qualified for another loan in the near future.

Theresa Hanson, a 51-year-old resident of Detroit, Michigan, has been crushed by three losses one after the other: her job of three decades, her husband to divorce and her home to foreclosure. But she is strong.

She has started studying at M-Tec to get certified as a nursing assistant with help from a federal retraining program that gives her $1,200 monthly. She goes to the Gleaners food truck parked near the Saint Patrick’s Catholic Church every Friday to get groceries.

Spring Lake couple Joe and Toni Gundy both lost their jobs almost simultaneously in November 2007, when they had just taken out a home loan. Fortunately, their savings carried them through to 2008, without going through foreclosure. When their account was down to 26 dollars, Joe found work at the Sara Lee facility in Zeeland.

Fifty-five-year-old Shirley Perez survives on unemployment money, local services and Gleaners food. She lost her house cleaning job when the firm she works left Michigan.

Young mother Kayla Thompson lives with her boyfriend and their two children at a mobile home park in Fruitport. They are struggling under piles of debt and threats of eviction every now and then. But they get by.

Similar stories are lived out by many more in Michigan foreclosure-laden neighborhoods, as more and more homeowners are driven out from foreclosure homes. They do not lose faith; they survive.

Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, formulated a mortgage modification program that is expected to prevent 1.5 million foreclosure properties. Under the proposed plan, participating lenders will be rewarded with a government share on the defaults for modified loans. Mortgages will be restructured to put amortization payments down to affordable levels based on the homeowners’ income flows. This is turn would result to regular payments to finally avoid foreclosures.

For this to materialize, the program would need $24.4 billion which will come from the $700 billion Troubled Asset Relief Program (TARP). The proposal met stiff resistance from the administration which stressed that the TARP fund should be allocated for investment, and not buy out foreclosures.

The Treasury Department has already released $290 billion from the TARP fund to buy investments from banks to stabilize the financial market. $40 billion was also used to salvage insurance giant AIG. Democrats have criticized this resistance to the foreclosures plan, pointing out the willingness of the administration to help banks which triggered the financial crisis, but is unwilling to directly provide help for beleaguered taxpayers.

However, the doors are still not closed and Chairman Sheila Bair will be engaging in fresh discussions with U.S. Treasury Secretary Henry Paulson with hopes of gaining new grounds. Bair has also approached legislators from Congress for support. House Financial Services Committee Chairman Barney Frank is optimistic that the administration will change its stance on the foreclosures reduction program and TARP funds could finally be released. House Speaker Nancy Pelosi is also supporting the FDIC mortgage modification proposal.

Chairman Sheila Bair has expressed the urgency of the situation as the increasing number of foreclosure homes have resulted to a negative impact to the housing market in terms of the reduction of median home prices. According to Bair, the market has started to overreact, calling for the need to stem this flow of foreclosures.

A new program by the US government is underway to tackle the two main root causes of the current financial crisis, which are basically a historical level of delinquencies in mortgage payments and millions of impending foreclosure homes. Officials are saying that this new mortgage program can achieve better results than the current Hope for Homeowners program that Congress had initiated last October 1, 2008 through the Federal Housing Administration.

According to government spokespersons, several proposals have been given to the administration for review but no definite decisions have been made. However, this new program may well be on its way to implementation as it has the potential to help 3 million homeowners facing foreclosures.

In this new program, participating lenders would need to restructure the delinquent borrower’s mortgage scheme down to affordable levels. As an assurance to lenders participating in this new program, the government will act as a guarantor to certain percentages of the loans of these borrowers facing foreclosures. In this case, the government will have to pay the lender these loan percentages should borrowers once again falls short in their mortgage payments.

The current Hope for Homeowners program requires lenders to issue a strict writedown on mortgages, which the FHA has set to 90% of the appraised value for these foreclosed homes. Aside from the automatic 10% loss that lenders will acquire in this program, losses incurred by lenders may be compounded with the current devaluation of housing prices. These declines in prices have resulted to a staggering increase of underwater homeowners, or those who owes a bigger mortgage balance that what the house is currently worth.

Lenders may be more attracted to this new mortgage plan since no writedowns are required. With these less imposing requirements, lenders can restructure these mortgages for foreclosure homes by offering a reduced interest rate for a pre-determined length of time. Another option would be to offer extensions on loan terms. Either way, hope is on the rise for beleaguered homeowners.

In view of the crisis in the housing industry, Senator Dodd, Chairman of the Senate Banking Committee, announced that he would spearhead legislation that would allow homeowners nearing foreclosures to file for bankruptcy in court. The said legal move would sop lenders from acquiring mortgaged properties.

The Senator is not really new with the program. It could be recalled that Dodd also put the same initiative last year. Despite the earlier failure, the Senator is still positive. He cited that the political environment has already shifted. He thinks that more and more lawmakers are now concerned, if not alarmed, by the growing number of foreclosure properties across the country.

As of press time, the number of foreclosure homes has grew to 936, 439. California-based firm RealtyTrac said that the month of October alone has recorded nearly 85,000 foreclosure properties. The company also said that, compared to the rates of September, the October figures showed a 5% increase.

The alarming numbers of foreclosures have gained prominence since last year. Government offices and lending companies have already made moves to solve the situation. However, Dodd and members of the Senate Banking Committee believe that the efforts were just not enough.

Dodd also said that he supports Federal Deposit Insurance Corp’s Chairman Sheila Bair in her proposal to make use of the $700 billion bailout funds to help delinquent borrowers lower their monthly mortgage payments. The Senator also said that he was “confounded” when he learned that Treasury Secretary Hank Paulson opposed Bair’s proposal.

In his opinion, the worsening foreclosure crisis is the main cause of the bigger problem in the financial industry. He said that the government might not be able to solve the alarming economic situation if it does not get to the root of the problem.

Dodd made no assurance that he will help institutionalize the proposal made by the FDIC Chair. He believes that jawboning would work to convince Secretary Paulson.

The current crisis is still continuing its massive wave of economic unrest across the nation causing more foreclosures to occur. Private homes are not the only ones affected but include rental units and apartments as well. This caused trouble to renters who are being evicted from their rented homes due to foreclosures, particularly for those who had no idea that their homes are being foreclosed.

In Illinois, Cook County Sheriff Tom Dart got tired of walking into homes to carry out eviction orders only to face families who have no idea on what was going on. These renters did not know that the units they are renting have become foreclosure homes.

Faced with this predicament, Sheriff Dart closed a deal with County courts that he will not carry out eviction orders until judges had ruled that renters were provided with prior knowledge regarding notice of foreclosures given to their landlords. With this new deal, Sheriff Dart only carried out 3 evictions in October when foreclosure rates where at a high.

Congress has been dealing with the foreclosures crisis and only faced frustration as the administration rejected bids for a bail-out plan for borrowers. The Treasury Department opted to use the $700 billion bailout fund to salvage banks and financial institutions and left troubled homeowners on their own.

Hearing about the Robin Hood tales from Cook County, Capitol Hill invited Sheriff Dart for a discussion to get some inspiration in finding short term solutions for this foreclosures crisis while long term programs are still being debated on top.

Democratic legislators are putting their hopes on President-elect Barack Obama when he takes office in January. While still senator, Obama co-sponsored the bail-out bill for borrowers but was rejected by the current administration. With him in the White House, the Democrats in the House are banking on the borrower’s bill to finally see passage.

Tom Schauwecker, an assessor in Boone County for almost 20 years, and Greg Harmon, a long-time property agent, both stated that this year is the first time they have encountered a surprisingly large number of foreclosures.

According to Schauwecker, his personnel compiled a complete foreclosure property list in Boone County. It is probable that around 300 homes will be filed as foreclosed in 2008.

About 27,000 foreclosure properties in Missouri were recorded in the Secretary of State office. Boone County Recorder listed 253 repossessed houses in October and 231 last year. Over 10 foreclosure homes have been filed during the 1st week of November.

This year’s foreclosure has been surprising for Schauwecker. The banks do not lend that often anymore and property owners are obviously facing the risk of losing their homes.

Gaslight Properties broker and developer Harmon stated that there was indeed a very big change in the house market. In addition, he is currently having a hard time updating his website due to continuous foreclosure filings.

Banks in Missouri are making arrangements with the borrowers who are having difficulty paying their mortgage obligations. Marketing Director Mary Wilkerson of Boone County National Bank stated that having to go to the courthouse is not a very good experience that is why they are doing their best to avoid that kind of situation.

Eric McClure, Commissioner of Missouri Bank, said that it is necessary for the borrowers and lenders to always communicate in order to avoid this unfortunate situation.

Loan adjustments in some cases are not considered, so what banks do is accept Deed-in-lieu wherein a borrower transfers all interests in Property Law to the lender to fulfil a default loan and avoid the process of foreclosure.

Columbia’s top 5 banks reported a huge increase in the number of properties they took back from default borrowers in September this year.

Schauwecker thinks and hopes that the housing market and economy will eventually recover.

Borrowers in Florida possibly will experience a moratorium on their mortgaged properties. After a meeting with a high-ranking bank officer last Tuesday, Gov. Charlie Crist, governor of Florida, announced that he is negotiating an agreement with lending companies for a suspension on mortgaged foreclosure homes. This is to give way to the holiday season.

Crist later on met with Florida Bankers Association president Alex Sanchez and after the meeting, he is hopeful to get favorable results by next week. The bank is one of the largest and most powerful in Florida.

Borrowers are advised to get in touch with their banks as soon as possible. They could be of great help to borrowers who are lagging in payments.

Next to Nevada and Arizona, Florida ranks third in foreclosures. One in every 157 homes in the state is confiscated by creditors.

The moratorium, of course, is not without deadline. The least that the state can do is push for the suspension of foreclosures during the holiday season. After expiration, the rest is upon the discretion of lending companies.

Fannie Mae and Freddie Mac have already been applying the moratorium for a week now. A number of Florida homeowners have already benefited from the deferment on foreclosures, and more residents will be enjoying the moratorium until January 9.

Uncertainty rests, however, on whether the moratorium on foreclosures would be adopted by lenders voluntarily or legislation would still be needed for their compliance. Nevertheless, Crist is exerting all efforts to help Florida homeowners keep their properties in the meantime.

Unfortunately for speculators, they are not covered by the moratorium as they have not been of much help to the housing situation in Florida. Only homesteads (or owners of primary homes) can rest assured that they are spared from foreclosures over the holiday season.

The increasing foreclosure cases, the weak economy and uncontrollable job losses contributed to taking home prices as it was in 2004.

The 15.1 percent drop in home price during the second quarter is currently topped by the 16.6 percent continued decline according to the S&P Case-Shiller Home Price national index. 10 main cities are down by 18.6 percent and 20 other cities fell by 17.4 percent. Thanks to foreclosure’s contribution.

Foreclosure depressed the 10-city index by 23.4 percent from its top price in June 2006. It has been falling for 26 months. The 20-city index is also 21.8 percent weak from the July 2006 high. Then, the national index has crashed by 21 percent since 2006.

The worst market is in Phoenix where loss reached 31.9 percent. Las Vegas and San Francisco lost 31.3 percent and 29.5 percent respectively. The best markets Dallas and Charlotte still showed decline of 2.7 percent and 3.5 percent.

The others in the 10-city index downed (in percent) by foreclosure are:

In cities like Las Vegas and Cleveland, sales mainly involved repossessed properties, owned by banks and were re-sold at cheaper prices.

Standard & Poor’s spokesman David Blitzer says that index prices are moderate because they cover exurban and rural areas. Karl Case, an economics professor is unsure on how much more prices can falter, but was definite that rampant lay-offs can worsen the problem.

Economist with Global Insight Pat Newport said that the economy suffered toward the end of the 3rd quarter. Starting there housing permits were infrequent, the National Association of Home Builders have few activities and purchase loan applications fell by 15 percent, foreclosure as a contributor.