MostlyForeclosures Articles: Online Foreclosure Homes Database And Foreclosure Information

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.

Many homeowners who have managed to escape the foreclosure crisis are increasingly becoming concerned about their future. Top on their list is to make sure that they avoid foreclosure at all cost in order for them to keep their home. But in order for you to do this, you must consider the following suggestions:

1. Homeowners with adjustable rate mortgages should find a way to convert it into a fixed rate mortgage.
2. Make sure that you are staying within your budget by monitoring your expenses and income.
3. Minimize the use of credit cards. Always ask yourself if you need the item or just want it.
4. Set up an emergency fund in case of job loss, sickness or other problems.
5. Live within your means and reduce household costs by giving up some luxury items and eating at home.
6. Save money by using coupons, buying non-branded items and using appliances wisely to avoid costly repairs.
7. Keep finances in order and work hard to protect your credit score.
8. Check your credit history regularly in case of wrong entries that could affect your credit score.
9. Speak with your lender if you are worried about missing a mortgage payment. Discuss a possible loan modification to make your mortgage payments more affordable.
10. In case of missed payment, contact your lender and request for a special forbearance or repayment plan.
11. Learn about the foreclosure process and understand the foreclosure laws implemented in your state to help you prepare for any eventuality.
12. Consult a lawyer or a foreclosure counselor if you are having some difficulties understanding foreclosure-related matters.

Most importantly, you must never give up without a fight. There are other options that could help you avoid a foreclosure and one of them will be the answer to your mortgage problem.

Many sellers are wondering whether it would be best to let their properties go into foreclosure or if it would be more practical to go through a short sale.

A short sale is basically letting go of a property for less the amount owed against it. Negotiating with a lender in a short sale is not easy. First, lenders may tap into the seller’s cash assets. Also, not all lenders are willing to negotiate. In these cases, the advice of a lawyer or real estate agent would prove to be helpful. To increase the chances of a negotiation, it would probably be wise for the seller to settle their arrears first.

The selling process is not easy in itself – the seller should be willing to go through experiences of agents holding open houses, appointments with buyers, and possible low offers. With regards to credit, sellers could expect to take a 200-300 point hit.

The effect on credit in a short sale is actually the same as in a foreclosure or a deed-in-lieu of a foreclosure. However, the advantage of the latter is that it allows owners to live in the property for four months to up to a year without rent. Also, both options could be subjected to deficiency judgment.

Before one goes on deciding on having his home repossessed, he should know that the waiting period before purchasing a new home after a foreclosure takes longer than a short sale. Under the new Fannie Mae guidelines, the waiting period after a short sale is only up to 24 months. Contrast this to the seasoning period after a foreclosure which takes 24 to up to 72 months.

In short, the difference between a short sale and a foreclosure could be compared to whether one prefers getting hit by a bus or a train. Owners would do well to reflect on the minute details of its differences before making a decision.

These days, you can buy a house with a down payment most people can afford. How? Choose from homes already classified by mortgage banks as pre-foreclosure period.

A pre-foreclosure period refers to the number of days, which range from seven to 60 days, before the final foreclosure, counted from the time the property has been placed in pre-foreclosure. Most banks do not like to deal with the process of foreclosure, so they allow homeowners to sell the properties being foreclosed.

If you’ve been planning to purchase a foreclosed property at an auction because of expected price cuts, consider buying a home in pre-foreclosure. Why? You’ll even get deeper price cuts. Consider the following:

• Pre foreclosure homes are cheaper because homeowners are in a rush to sell. They are cutting their losses and they know there are lots of other homeowners trying to sell their houses in pre-foreclosure.
• You compete with less number of buyers at pre foreclosure homes than in home auctions where lots of real estate professionals, company representatives and individual buyers converge.
• You get more time to inspect a home in pre-foreclosure than in auction. You have time to check defects or potential sources of problems.
• You are not required to bring certain amounts of cash for upfront payment as you are in an auction.
• You have time to talk with the seller and ask questions that you could not ask in an auction, such as the neighborhood and community facilities.

While you have the chance to buy a house at a great bargain, you also face the risk of buying a house that will bring you troubles you didn’t expect. So take precautions. See to it that the property is lien-free and that it is not attached to a judgment or to another mortgage loan. Bring an experienced individual that you trust to check the house with you.