Innocent Bystanders

November 30, 2010 by  
Filed under Innocent Bystanders

Innocent Bystanders

Monday November 29, 2010 at 12:00 pm PST by Joshua Anderson, Lexington Realty Correspondent

Los Angeles—We have all heard the stories, a once vibrant neighborhood goes to the dumps because every other house on the block is either bank owned or currently in foreclosure. Everyone looks around and points fingers and asks who’s to blame?  Well from the top we of course by default blame Wall Street, the banks and the government. But by taking a more in depth look at the whole scenario, we realize there were a chain of events that eventually lead us to where we are today, and the unfortunate outcome, are those who suffered because of someone else’s mistakes.

Take 60 year old Sherrilynn Palladino, a ten year homeowner in the California community of Grover beach.  A responsible borrower who never missed a payment, Palladino could only stand by and watch as the price of her home plummeted until it was too underwater to do anything about it. This scenario had been played out over a million times in thousands of communities across the nation. It’s almost like a domino effect, one block falls, and sets off a chain reaction. Palladino had dreams of selling her home and cashing out. A home with good equity would have made for a secure retirement, but instead, the values declined. Between all of the underwater mortgages and rising rates, foreclosures were inevitable. In the case of Palladino though, she never missed a payment, even after being laid off from her job as an administrative assistant. Unlike her situation, most families could not afford to salvage the basic necessities just to keep up with the mortgage payment. This is where the real trouble began. Almost everyone who had an adjustable rate mortgage was bound to default at some point or another, and just as it was predicted, they did. On top of the defaulted loan, many homeowners lost there jobs, thus creating an even deeper financial burden.

Now that we are somewhat nearing the tail end of this foreclosure mess, we need to have a better understanding of what got us here in the first place. Prices will still drop for the next couple of years and lenders are stepping up there foreclosure efforts. So before the smoke dissipates there will be even more collateral damage. Sherrilynn Palladino was just one case, but there are thousands more just like her. One of the best things you can do in a situation like this short sale. The process allows you to alleviate the negative debt and does minimal damage to your credit, pending your not severely in default. Upon completing the short sale you may be entitled to up to $3,500 from the Obama driven HAFA program. The benefits are endless; however the most significant is avoiding foreclosure. After just 18 months the homeowner can be eligible to take out a new home loan and take advantage while prices and interest rates are still historically low.

Being a victim of this housing crisis doesn’t mean you need to be a casualty, in many cases it takes risk and a small amount damage to rectify the situation, but in the end it may be worth it.

The Invisible Recession

November 29, 2010 by  
Filed under Short Sale/Loan Modification Blog

The Invisible Recession

“An in depth look into what really happened after the economic collapse”

Joshua Anderson. Lexington Realty Correspondent.

We have all seen the apparent signs of the big recession. First there was the mortgage crisis, the failed banks, the Wall Street scandals and of course the unemployment rate. All of this began when the housing market began to collapse and continued on a downward spiral. The more homes that were foreclosed, the less equity became available. Small businesses began to take a dive and within a matter of months the entire financial infrastructure of the United States was faltering at a record rate. As the smoke began to clear, massive layoffs ensued and corporate giants began to buckle.

One of the highlights in this crisis was the big Wall Street bailout. Stronger banks acquired the weaker banks and we all believed that we, the American people, were somehow going to benefit from this. The outcome, we didn’t, not at all in fact. The only noticeable signs we saw of this bailout was that Wamu’s became Chase and Merrill Lynch became Bank of America. Aside form the obvious acquisitions in the news; we were left waiting for a savior. Homeowners who were delinquent were expecting modifications that never came to fruition, and the unemployed waiting to be hired again. In the midst of this fiasco, several large banks were compensating there executives with skyrocketing incomes & bonuses.

While the rest of the economy was struggling to keep up, Bank of America CEO Thomas Montag received a total compensation of $29,930.431. This was considered only slightly larger that that of Wells Fargo CEO John Stumpf who made just over $21,000,000.  These numbers are astronomical and completely unfair to the American people who are barely able to stay in their homes. The most terrifying factor is that for those who are facing foreclosure thought they had a fighting chance. However, the Obama administration made it clear that stepping up foreclosures is the only way to stabilize the doomed housing market.

At this point in time, there are not many options available to those who are struggling. There is however some long term tips to keep in mind. Continuing education may be the best way to secure a great career and of course smart savings and investments. There may be a recession but as you can see there is a dramatic difference between those who are feeling the effects, and those who aren’t.

Obama Advocates Foreclosure

November 16, 2010 by  
Filed under Obama Advocates Foreclosure

Obama Advocates Foreclosures

By Joshua C Anderson, Lexington Realty Correspondent November 14, 2010 3:39 PM PT

Los Angeles—The housing market has been jolted by several failed attempts to recover and the only solution at this point, seems to destroy and rebuild.

In the midst of the month long foreclosure moratorium, harsh decisions had to be made. Obama administration officials stated that all lending and servicing institutions needed to review there foreclosure policies and procedures, this however did not result in a mass of homeowners getting out of trouble. The officials made it clear that they did not support the moratorium for several reasons. One main point being that the housing market wouldn’t return to normal without foreclosures.

A stable market in the future does not come without consequences. The continuation of foreclosures will not only hurt the housing market, but it will also have an adverse affect on the overall economy. The Mortgage modification program was supposed to lower homeowner’s monthly payments by 31%. The program was a complete failure and many homeowners have been misinformed.  Laurie Goodman of Amherst Securities said in a statement, “What they have now realized is there are a lot of borrowers who can’t be saved and have to be moved through the foreclosure process.”

This will be a hard fact to address to the American people. There will be a lot of animosity and many will feel left out. There are however, alternative options to foreclosure. The most popular and less damaging is the short sale.

Southern California based Housing Assist of America has made quite an impact on the short sale market. They are among the nation’s best negotiators and have over a 90% percent success rate. Typically in a short sale the lender will accept less than what you owe on the property and in most cases forgive the left over balance. The consequences are significantly less detrimental to the homeowner’s credit and financial situation than that in a foreclosure. Housing Assist of America has recently made an alliance with tax powerhouse H&R Block. Together, they educate at risk homeowners on short sales and tax ramifications. There scheduled to host a free seminar next week in Culver City, a hard hit  suburb of Los Angeles. As the foreclosures in the nation increase so do the opportunities for scammers. When the loan modification wave hit, several fly by night firms starting collection retainer fees from homeowners, only to yield no results. Other signs to watch out for include companies that promise results and charge an upfront fee. Banks do not charge there clients to modify or short sale there homes.

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In this vulnerable time it’s important to be vigilant to what your options are. The government has made it clear that foreclosures will continue and everyone who falls into that category will inevitably fall into it, one way or the other. From a homeowner’s perspective, the best option is to accept the demise and seek out the best exit strategy. For those who are still holding on to hope or speculation, this message from the top should clearly define the future housing forecast.

“As we near the end of 2010, the housing market remains fragile, and has recently come under renewed pressure from slowing economic growth, weaker employment and foreclosure uncertainties, We believe that it will be a considerable time until the housing market has a sustained recovery.” A chilling statement from Freddie (FMCC) Mac CEO, Charles Haldeman.

Housing Assist Coldwellbanker