MostlyForeclosures Articles: Online Foreclosure Homes Database

In October, California’s median home prices dropped by 34 percent to $278,000, compared with last year’s $424,000, due to the unabated flow of foreclosures in the state.

According to MDA DataQuick, a real estate monitoring firm, median home prices in the state in September declined by 1.8 percent.

Data showed that nearly half of the decline in the home median price was attributed to depreciation and the other 50 percent by a change in sales and the way distressed properties are financed.

California is seeing a high foreclosure rate in counties of Merced, Modesto, San Bernardino, Riverside and Stockton.

Meanwhile, the surge in foreclosures has encouraged Californians to take advantage of the situation by purchasing forfeited properties at bargain prices. October home sales increased by almost 64 percent to 42,293 from last year.

In San Francisco Bay, about 45 percent of preowned houses sold in October had been in some form of foreclosure proceedings. Home sales activity in the county increased by 39 percent from last year’s 7,613 and about 5 percent from last month.

Median home prices declined by 12.1 percent from last year to $699,000. and home sales dived by 21 percent. Furthermore, the October median price dropped 41 percent from the $631, 000 value in the same month a year ago.

The median home price in San Francisco Bay dropped by 6.3 percent in September from the peak value of $665,000, for the same period last year. Contra Costa County, on the other hand, experienced a dropped in median prices by over 46 percent from last year to $285,000. Home sales in Contra Costa increased by almost 87 percent.

Southern California reported a dropped in median price by 33 percent in October and a drastic increased in home sales by 67 percent. About 51 percent of the total transactions in Southern California’s six counties are foreclosure resales.

Jessica Coblentz, an 18-year-old graduate from Davison High School, is not your typical buyer of a foreclosed home. Early this year, she acquired her first property, a 1,600 square feet, three-bedroom home in Richfield Township, for $47,500. After some repairs, her total cost was near $52,000.

She was not looking for a house to buy then, but when she saw a listing of foreclosure property near her parents’ house, Coblentz decided to give it a try.

Now, the house Coblentz bought has been appraised for $88,000. She is currently spending a total of $570 monthly for house payment, taxes and insurance.

There are several ways you can find a foreclosed property:

• Look around your neighborhood for any abandoned and vacant properties.
• Check filings or records on homeowners who are late on their mortgage payments or those who are on some form of foreclosure proceedings. Filings are published in various publications, including “Flint-Genesee County Legal News.”
• Several Web sites also provide foreclosure listings. Also, realtors have access to a database of multiple listing service of Michigan foreclosures.

Buyers should get a pre-approved letter for a loan from a mortgage lender or bank or a proof of financial capability to pay before making an offer for a property.

Now that buyers know some advantages of purchasing a foreclosed property, how to find one and make an offer, they should also be aware of risks involved in buying a distressed home.

Some of these homes have been vacant or abandoned for about six months or more. Buyers should not expect houses that have been in the market for a long time to be in good condition.

Theft and vandalism are just two reasons that may cause a property to deteriorate.

Since most of foreclosed properties are sold on as-is basis, buyers should order for their own inspection of the property before deciding to buy.

Another foreclosure bill is being debated upon by government officials while homeowners continue losing their homes to the housing crisis. Sen. Richard K. Durbin’s Helping Families Save Their Homes in Bankruptcy Act was placed before the Senate Judiciary Committee for another perusal. The Illinois Democrat’s bill failed to garner support from Congress last year.

During the hearing, witnesses Sheriff Thomas J. Dart of Cook County in Illinois and Mortgage Bankers Association Chairman David G. Kittle exchanged arguments on whether to change bankruptcy laws as the bill suggests. If approved, judges would have the right to adjust mortgage rates of troubled homes as a solution to foreclosures.

Dart described the stunned expressions of homeowners when they learned of their eviction. Others would even go home after work just to see their belongings on the sidewalks and their children with nowhere to stay.

Houses which once lined neighborhoods are now boarded up or scheduled to be demolished. According to Dart, he had evicted 1,771 because of the foreclosure problem, and had 4,500 families more for this year.

Meanwhile, Kittle argued that helping homeowners run away from bad debts would affect everyone else. Homebuyers would be made to pay more fees and interest rates, and bigger down payments by lenders if Durbin’s proposal is approved. He estimated that a $295 monthly tax on homeowners if lenders would be made to absorb more mortgage debt.

This would also lead to more foreclosures as homeowners file for bankruptcy. He cited the same reasons for opposing the federal government’s $700 billion budget to bailout financial institutions. For Kittle, it is inevitable that some people and businesses would have to fail.

If the crisis continues, 6.5 million Americans, or one out of 8 homeowners, are estimated to lose their homes to foreclosure in the next five years.

Among the few supporters of Durbin’s anti-foreclosure bill has been Sen. Patrick J. Leahy, the Senate Judiciary Committee Chairman.

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.

Dismayed by the delay in federal programs that really help homeowners avoid foreclosures, about 15 real estate brokers and financial professionals in Maryland participated in a meeting held by the North Anne Arundel County Chamber of Commerce to call on state and local officials to give more attention to the worsening problem of foreclosure homes.

In October this year, Maryland foreclosures increased by 32 percent compared to the previous month, based on findings by RealtyTrac Inc. With one unit of every 774 households foreclosed, the total number of foreclosure properties in the state in October was 2,973.

According to Lucinda Jones, civil records supervisor at the Anne Arundel County Circuit Court, foreclosures in the county soared to 240 units in October from 161 units in September. She said that if Maryland foreclosure rates are not changed by intervention programs, county foreclosures could reach 270 in November.

Lee Spencer, manager of the Pasadena branch of First Metropolitan Mortgage, complained that the federal bailout programs are sloped towards the welfare of the banks and not to the homeowners hardest hit by the economic downturn.

He called on state legislators to work with accountants and lawyers so that what they will come up with to solve Maryland foreclosures will really be realistic and beneficial for homeowners.

In November, the state has received commitment from six mortgage firms to help troubled borrowers avoid foreclosure. The mortgage firms committed to delay foreclosure proceedings for 60 days and to cancel all fees and penalties accruing during the 60-day period. It is expected that the agreement will benefit about 25 percent of home loans across Maryland.

In addition to the state program, Anne Arundel County Executive John R. Leopold has allocated $350,000 to provide mortgage counseling to borrowers trying to refinance. The semi-private county agency Community Development Services Inc. has been also helping borrowers negotiate with mortgage lenders and has been requesting for a federal grant to acquire foreclosed properties for affordable housing redevelopment.

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.

According to Washington sources, US Treasury Secretary Henry Paulson has officially scratched out his plan to buy assets from distressed financial institutions owning foreclosure properties. The government will continue to invest in these firms but would first like to focus on struggling consumers and borrowers.

Paulson disclosed that the Treasury will look for ways to aid strapped consumers. In the next phase of the Troubled Asset Relief Program, Paulson said that the government will still flood financial firms with money but will also try to improvise a plan to prevent foreclosures and improve the availability of loans such as:

• student loans
• auto loans
• credit cards

The new rescue move of the Treasury signals an awkward start especially if the new administration will take its place soon. The Treasury would still design new programs even if it would take billions of dollars and weeks to implement. The government has made available a budget of $350 billion. As of the moment, the Treasury has only $ 60 billion available in the TARP fund.

The Congress is not very happy that the Treasury is not forcing banks to create loans with funds they got from the government. Paulson remains steadfast in this issue because he believes that no one should be pushed to get a loan that they do not want. Paulson has even resisted the pressure to provide bailout to troubled automakers in Detroit. He said that the auto industry is important but believes that TARP is not the right vehicle for a bail-out

Paulson, however, have said that the Treasury has not yet figured out how to allow the Congress’ request to use TARP to aid distressed homeowners to prevent foreclosures. It could be recalled that the original plan of the Treasury is to take the lead once it has granted mortgage-backed securities and residential loans. The agency plans to persuade lenders to help homeowners avoid having foreclosed homes.

According to Paulson, using the TARP money to decrease foreclosures was not only thought about but was, in fact, the focal point of the plan. Treasury only hopes to get a clear answer on what the Bush administration can do to help stop the increasing numbers of foreclosure homes.