Foreclosures Crippling the Economic Recovery

October 26, 2010 by  
Filed under Short Sale/Loan Modification Blog

Home prices & sales are up but foreclosures are still crippling the economic recovery.

By Joshua C Anderson, Lexington Realty correspondent. October 26, 2010

Los Angeles-It’s been more than a few weeks since the major lenders have enacted the foreclosure moratorium. “We are looking intensively at the firms’ policies, procedures, and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures,” said Fed Chairman Ben S. Bernanke. Many homeowners are still clinging on to the idea that they will not be foreclosed as a result of this investigation. The reality of the situation is that only ten percent of at risk homeowners will get out the situation there in.

Several key factors that are adding to the demise of the housing market include the fact that the housing recession is nowhere near over. Most of the nation’s communities have not yet bottomed out and optimistic speculation is merely opinion driven. Once the market does officially bottom out, prices will not rebound automatically. It will take quite some time for the rest of the economy to get up to speed, and even then it will be a long recovery. Another common misconception is that the worst is in the past. Rick Sharga from Realty Trac, an online foreclosure company, says he does not envision foreclosure activity stabilizing until late 2011. There are still those who will continue to believe that there loans will be modified, even though several reports from the top news and government agencies confirmed that it was a huge failure.  One of the realistic solutions in this market is to mitigate as much as loss as possible. Many of the homeowners who are facing foreclosure do have an opportunity to salvage what’s left of there credit and financial future by attempting a short sale.

Knowing that are very few positive solutions to this crises, it would behoove homeowners to seek out reputable companies, attorneys and accountants. By doing adequate research, the average homeowner can avoid fraud and even foreclosure. According to the California department of real estate, companies that are conducting modifications, loans, short sale and forensic loan audits, arte required to be registered and certified with the department. It is up to the homeowner to seek out this information and make the right decision based on there situation.

Bank of America Resumes Foreclosures

October 19, 2010 by  
Filed under Short Sale/Loan Modification Blog

Bank of America Resumes Foreclosures

On Monday, Bank of America stated that, after having reviewed 102,000 foreclosures in 23 states where courts must sign off on proceedings, they are now resuming the process on said cases.

B of A stated that the first of the new affidavits are scheduled to be submitted by October 25, 2010, and will continue reviewing in 27 other states soon after. According to a B of A spokeswoman, no errors were found during their review, and less than 30,000 foreclosure sales across all 50 states will be delayed as result of the investigation. The announcement came one day before the banks third quarter earnings report, the news sending B of A’s shares up 36 cents to $12.34 or 3.01%. B of A stated that the review process, “has been an important step to give customers confidence they are being treated fairly.”State Attorneys General have stepped up pressure on banks recently after it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate, also known as “Robo-signing”.

October 1st was the initial launch of review for B of A, and October 18th is said to be the day the bank will expand its document probe to all 50 states. The bank says that their initial assessments in the remaining 27 states show that the basis for their foreclosure decisions were indeed accurate.

So far at least five other major mortgage servicers have announced their own document review process. 1.8 million Loans are in foreclosure in the 23 judicial states, while 1.3 million are pending in other parts of the country, according to a Morgan Stanley analyst report.

Foreclosure Freeze Loosens Up

October 19, 2010 by  
Filed under Foreclosure Freeze Loosens Up

Foreclosure Freeze Loosens

The foreclosure freeze that has been threatening to paralyze the housing market recently may be coming to an end. Two of the nation’s largest mortgage lenders Bank of America and GMAC Mortgage announced on Monday, plans to resume foreclosure cases, despite concerns about document processing.

B of A will resume processes for claiming 102,000 homes along with GMAC who did not specify how many homes they will be claiming. Renewed foreclosure efforts are a part of the movement to demonstrate that regardless of some procedural issues, the majority of foreclosure and evictions are in fact legitimate, and that the banks have the paperwork to prove it.

Foreclosure Moratorium

October 19, 2010 by  
Filed under Foreclosure Moratorium

What You Need To Know About the Foreclosure Moratorium

By Joshua C Anderson, Lexington Realty correspondent. October 19, 2010

Los Angeles (Lexington Realty) – – In the recent weeks all of the major lenders and loan servicers have all followed the same trend of halting there foreclosures. To a delinquent homeowner that may sound like the miracle they were praying for. However, the situation is much more complex than they ever imagined.

What the foreclosure moratorium is in a conspectus is merely a break for the servicers to review documentation that may have been overlooked in the overwhelming housing crisis. Many banks will go back and scrutinize the terms and conditions of the delinquent loans in an effort to help homeowners who may have been victims of fraud. The problem that persists is that many homeowners were not victims at all. First time borrowers knew they were getting into a home they could never afford, and in addition to housing prices dramatically dropping, many of them lost there jobs and were unable to pay there mortgages. The lenders will not excuse past due payments because they simply could not afford it. After the bail out of several financial institutions, lenders were required by the government to stimulate the economy by restructuring loans. Within weeks, even homeowners who were current on payments were applying for modifications. Unfortunately, the trend did not last long and would leave a trail of foreclosure in its midst.

The modification boom in many opinions was a disaster. Recent reports from the Obama administration stated that 60% of modified homeowners failed the program within the first six months, and millions of others never had the chance. In the climax of the modification boom, several third party law firms and company’s targeted homeowners for what little money they had left, and were charging anywhere from $1,500-$5,000 for a retainer fee that yielded no results. Fast forward to the present day, and we have record high foreclosures and unemployment crippling the housing market.

The modification program was indeed a failure and there are very few success stories. The only positive outcome of the moratorium is that a few lucky homeowners will get modified if they can afford it. Many at risk homeowners do not want to come to terms with the fact that even with a temporary mod, they will foreclose.  What homeowners need to consider now is cutting there losses and salvaging what they have left of there credit.

Much like the attempt to help delinquent borrowers by modification, there is a new trend on the block that so far, has proven to be the best exit strategy in the housing crisis. Homeowners who owe more than there homes are worth, now have the option to Short Sale. There are not many qualifying factors as there were with the modifications. If you are delinquent, unemployed, and underwater or simply down on your luck financially, a short sale is the best solution. A homeowner can be free and clear credit wise, within 14 months of the short sale and if your loan is a non recourse the lender by law has to forgive you of any deficiency. There is also no cost required to facilitate the transaction. Homeowners are encouraged to go with a well established short sale firm rather than a traditional realtor because they often lack the experience to complete the sale successfully.

Within 14 months of the short sale, a homeowner can be eligible to purchase a new property and take advantage of the low prices that are flooding the market today and start from scratch.

The moratorium will prove to be just another wave of hope that will surpass many of the homeowners who need the help. Only 1/3 of the at risk foreclosure candidates were modified this year and the rest will likely is a well established short sale company who helps homeowners in those situations and counsels them through and even after the process is complete. They also hold seminars in different cities to educate homeowners on the subject.

With the foreclosure halt coming to an end, many will be right back where they were before it begun. It is the responsibility of the homeowner to asses there situation and make choices that will benefit them in the future.

Housing Assist Coldwellbanker