Archive for Foreclosure News
More Foreclosures Coming in 2010
Posted by: | CommentsMore foreclosures coming in 2010
The number of long-term adjustments completed under the president’s foreclosure prevention plan rose to 66,465 at the end of December, or 7.4% of all trial modifications started, up from 31,382 a month earlier. Another 46,056 modifications are pending borrowers’ final signatures, according to Treasury statistics released Friday. Another 48,924 were denied permanent modifications, mainly because they did not make their trial payments on time, did not hand in the needed paperwork or did not meet the program’s criteria. Meanwhile, the number of delinquent homeowners in trial modifications rose to 787,231, up from 697,026 a month earlier. Housing experts remain concerned that the rate of foreclosures still outpaces the help homeowners are receiving under the program. A record three million homeowners received at least one foreclosure filing in 2009, according to a RealtyTrac report released last Thursday. A lot of borrowers are too far underwater or don’t have enough income to qualify for a permanent modification, said Celia Chen, senior director at Economy.com. Others will not be able to provide all the documentation needed. Administration officials said they continue to review the program to make sure it is helping those in need, Chen said she doesn’t think there’s anything the government can do to keep these borrowers in their homes. “As more of these loans fail to make it to permanent modifications, a lot will go back on the market as foreclosures and that will depress home prices,” said Chen, who expects home prices to fall another 10% by the third quarter of this year.
Record 3 Million Homes in Foreclosure
Posted by: | CommentsRecord 3,000,000 homes in foreclosure!
RealtyTrac, the online marketer of foreclosed homes, reported that one in 45 households — or 2,824,674 properties nationwide — were in default last year. That’s 21% more than in 2008, and more than double 2007’s total. “As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said RealtyTrac CEO James Saccacio in a prepared statement. However, by all accounts it is still uncertain whether efforts like Obama’s Home Affordable Modification Program have forestalled or just delayed foreclosure. By early December more than 680,000 borrowers had gotten temporary workouts but only a few thousand had been permanently modified. “In the long term, a massive supply of delinquent loans continues to loom over the housing market,” said Saccacio. “And many of those delinquencies will end up in the foreclosure process in 2010.”
The four states with the most foreclosure filings — California, Florida, Arizona and Illinois — accounted for a full 50% of the nation’s properties receiving notices. Nevada recorded the highest rate of foreclosures, at 10%, followed by Arizona, at 6.1%; Florida, 5.9%; and California, 4.75%. But some states where foreclosure hit hard early are now faring better. Indiana foreclosures fell by 9.9%, Ohio by 10.5% and Rhode Island by 23.6%. California, by far the most heavily populated in the union, posted the most filings with 632,573, up 20.8% from 2008. Golden State cities have also recorded some of the steepest declines in home prices, with values falling 50% or more in some Central Valley cities.
Help For Upside-Down Homeowners
Posted by: | CommentsUpside-down homeowners get some help!
The plan is designed to help homeowners who do not have the income or debt levels to qualify for a loan modification under the administration’s $75 billion Making Home Affordable program. The plan establishes timelines, a standard process and documents, and cash incentives for participation.
To qualify under the new guidelines:
The property must be the homeowner’s principal residence.
The homeowner is delinquent on the mortgage or default looks likely.
The loan was made before Jan. 1 this year and is less than $729,750.
The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income.
Foreclosure Scams
Posted by: | CommentsForeclosure Scams to Watch Out For!
The Federal Trade Commission (FTC) announced six new lawsuits brought against companies accused of running foreclosure rescue and loan modification scams. The suits are the latest action federal and state authorities are taking in “Operation Stolen Hope,” which to date includes 118 actions by 26 federal and state agencies, including a total of 28 FTC lawsuits filed against alleged fraudulent firms. According to the FTC, foreclosure “rescue” professionals identify targets by researching public information about foreclosures. They often send a personalized letter to distressed homeowners and they may also rely on public advertising. They promise they will save your home and may promise they can negotiate a better deal with your lender. But there’s always a catch. Often these firms want you to pay an upfront fee. Sometimes scam artists require you to make payments directly to them while they negotiate with your lender. In both cases, once the money leaves your hands, the scammer disappears. Other tactics include having you sign documents that surrender the title of your home to the scammer, or asking you to “rent-to-buy” your own home after surrendering title.
The appeal of this scheme is that you are told you can remain in your home as a renter and repurchase it within a few years. But the terms of the deal are usually unfavorable for you, and the scam artist walks off with most of the home’s equity or worse — if they default on the loan, you get evicted. A variation on the theme occurs when a scammer says they have a buyer for the home, and asks you to transfer the deed. The scammer then rents out the home and keeps the profits while the foreclosure proceeds. Even worse, you are still responsible for the unpaid mortgage, because transferring a deed doesn’t dismiss a mortgage obligation. A final tactic is when a scam artist files a bankruptcy case in your name, sometimes without you even knowing about it. The scam artist keeps the fee for his “services” during a temporary pause in home foreclosure proceedings, while you end up with the fallout from having a bankruptcy on your credit history.
Home Buyer Tax Credit Expanded
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Today, the U. S. Senate voted overwhelmingly to expand a first-time homebuyer tax credit to include a far larger pool of people entering the dormant housing market. This legislation now goes to the U. S. House of Representatives, which is expected to quickly approve the measure and send it over to the President for his signature.
The $8,000 tax credit for first-time homebuyers, enacted as part of the stimulus package last February, and set to expire on November 30th, would be extended and expanded to include a $6,500 credit for people who have lived in their current residence for 5 of the prior 8 years. Move-up buyers don’t have to sell their current home to qualify for the new $6,500 credit, but the money cannot be used to purchase a vacation home – it’s only for a primary residence! Homes must cost less than $800,000 to qualify for this program.
The legislation would extend the $8,000 tax credit and expanded $6,500 credit through June 30, 2010, as long as the Buyer enters into a legally binding contract before April 30, 2010, and closes by June 30th. It also doubles the income ceiling for qualification to $125,000 for individuals, and for joint filers with incomes above $225,000.
What You Need to Be Aware of When Filing Bankruptcy While in Foreclosure
Posted by: | CommentsJust the other day, I met with a potential client who is in the middle of a divorce. She’s losing her home, and she has enormous credit card debt. She came to me to inquire about the possibility of doing a short sale. She was explaining that she had already met with a Bankruptcy Attorney and he told her to file for Chapter 7 and just let the house go! I said Whoa…. put the brakes on! I asked her “did he tell you what steps that you need to take with the house after putting it in the bankruptcy?” Obviously her reply was “No, I was told that once I put the house into bankruptcy that I was done and I don’t have to worry about the house anymore.” Wrong, Wrong, Wrong!!! Granted, you don’t have to worry about the debt associated with the home, remember that is why you are filing a bankruptcy on the debt.
I am not a bankruptcy attorney, and I’m certainly not about to offer any kind of legal advice, but I thought that a bankruptcy only helps to resolve debt issues. Correct me if I’m wrong, but it does not take your name off the title. So, what does that mean? If you put the house into bankruptcy but the house is still titled in your name, then you are still responsible for that property until you sell it or the bank takes it from you through foreclosure. Let no one tell you differently. Remember that multi-page mortgage contract that you signed at closing? Somewhere in the midst of all that black and white print you agreed to be responsible for that property until the debt was fully satisfied and title deeded from the bank to you (free and clear), or to a new owner. These go hand in hand, so one without the other still equals YOU! Therefore, you will still be responsible for that home in Deed or in Mortgage.
With that being said, before filing for bankruptcy, know your options regarding the property:
- You can do a deed-in-lieu of foreclosure (giving the house back to the bank to avoid a foreclosure
- Put the house on the market with a Realtor and sell it for a profit (if there is any equity
- Do a short sale
However, don’t just do nothing! That will cause a “Double Whammy!” on your credit, and you definitely don’t want that to happen. For instance, there is one mortgage product out there, and their requirement regarding bankruptcy is 2 years from discharge, and a foreclosure is 5 years, so now you are seven years in the hole before you can purchase another home. You might be saying “I don’t want to own again”, but that is the frustrated, drowning in debt person talking. When things get better and you are able to get a handle on your finances, then you will be ready to start thinking again about a new home. If it takes you seven years to get back in financial shape then you will be okay, but if you kick it up a notch and get back in full swing in less than 3 years, then you will run into the first instance that I mentioned, or you will have a ridiculous interest rate, either way it goes, the “Double Whammy!!” will get you….avoid it at all costs.
Ask plenty of questions and do your homework! Seek out good legal advice and don’t be afraid to get a second opinion. Most importantly, AVOID the “Double Whammy” and only deal with an experienced real estate agent with years of knowledge. When help is needed, call Florida Auctioneers & Realty, LLC at (941) 927-8108.