Foreclosures Continue to Bring Down The Housing Market

Foreclosures continue to bring down the housing market despite a recent decline in underwater mortgages

By Joshua C Anderson, Lexington Realty Correspondent

As the holidays approach, many Americans are considering relocating to take advantage of the low prices available in the market. However, the savings are not a result of an amazing deal, there the aftermath of the worst housing crisis in history. For the miniscule market of qualified buyers, there are some great opportunities, but for the rest of the nation the turmoil continues. Just last week Forbes online magazine released an article of the worst hit cities in the nation, and that list continues to grow.

Cleveland Ohio was the top city to have the sharpest decline in home values, followed closely by Minneapolis and Portland. The nation however has seen somewhat of a decrease in underwater mortgage holders. But the problem of underwater homeowners still has an adverse effect on the market. The underwater homes carry the highest risk of default and foreclosures. The only realistic solution for these homeowners is a short sale. The short sale process has several benefits for the homeowners as well as the lender. The market will continue decline regardless of new buyers as long as there are foreclosures. Many delinquent borrowers do not want to face the fact that they will lose the house to foreclosure if they do not short sale, and there are still many holding on to the idea of the failed modification program.

In addition to the devastating consequences of foreclosure, many homeowners are opting for bankruptcy, deed in lieu and abandonment. All of which will continue to drive down the economy. If all of these delinquent borrowers choose a short sale, they will avoid all of these problems. Housing Assist of America is a southern California based company that has been named number one and is platinum certified through equator. HAA also has an immaculate rating with the better business bureau and doesn’t charge fees to facilitate the transaction. To learn more about them you can visit www.housingassist.com In these uncertain economic times its prudent to make the right decisions for the long run.

A Grim Reality

A Grim Reality

Why this holiday season won’t be so jovial for millions of Americans

Joshua Anderson, Lexington Realty correspondent. Thursday December 2^nd 2010 9:55 PST

This holiday season, retail stores will be packed beyond capacity, just as they are every year. Hot items like the Apple iPad, Xbox gaming system and the latest in children’s toys will fill shopping bags. But not so distant from the dreamlike ambience of the mall there lies a grim reality. Millions of families will not be at the malls and outlets; they will be without heat, electricity, food and of course, without Christmas festivities. One of the main reasons for this is the fact that unemployment benefits will run out for more than two million Americans. The maximum time allowed for unemployment benefits is 99 weeks. In addition to the record unemployment, there is a large surplus of foreclosures. This is the highest ever record of foreclosures in the nations history, probably in the world. When you factor in losing a job and losing a home, the hope for a person can decline very sharply. Many just want to find a way to put all of this behind them, there are a few small options that just might be able to salvage what’s left.

When economic times are at the worst, there are very limited options as to what’s available. When you factor in job loss and foreclosure risk, the main concern should be cutting your losses before it spirals out of control. Bankruptcy obviously has long term ramifications and foreclosure is not much different. A boutique firm in Los Angeles has been advising nearly all of there clients to short sale. In that process the lender agrees to accept less than what’s owed on the loan. Most of the time, the homeowner can walk away with very little damage and is usually eligible to purchase again within 14-18 months. Whichever direction the homeowner decides to go there is still the issue of unemployment that needs to be resolved.

Job seekers need to maximize their resources and find ways to stand out amongst the crowd. Thousand of seasonal retail jobs are available every year and it’s usually on a first come first serve basis. In large metropolitan cites like Los Angeles, Chicago or New York, there are many opportunities, even at a temporary level. An employees performance during the holidays season could dictate weather or not they will be rehired the following year or even be eligible for a full time position. In the end it is up to the job seeker to make a lasting impression that will insure their job security.

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.

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.

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.

Lender

A lender is a private or public entity which loans money to borrowers.

Deficiency Judgement

A deficiency judgment is a judgment is when a lien is held against a borrowers.  This happens when the foreclosure sale does not produce enough money for the mortgage to be paid in full.  Generally, the lender may come after you for this deficiency depending on whether or not this is a non-recourse loan.

Loan Modification

WHY USE HOUSING ASSIST FOR MY LOAN MODIFICATION???

Loan Modification is a process whereby a homeowner’s mortgage is modified and both lender and homeowner are bound by the new terms. The most common modifications are lowering the interest rate, reducing the principal balance, ‘fixing’ adjustable interest rates, increasing the loan term, forgiveness of payment defaults & fees, or any combination of these.

• HousingAssist.com will assess  your ability to pay your mortgage through the analysis of wage statements, investment accounts, bank accounts and tax returns, among other data.
• Then we will make a detailed proposal to your lending institutions for restructuring of mortgage terms in a fashion that will enhance the likelihood of repayment.
• HousingAssist.com will negotiate on your behalf.
• We have built strong relationships with all lenders.
• We are also hired by these lenders to help salvage troubled loans.
• Mortgage Companies have an interest in offering concessions to troubled borrowers because of the extremely high cost of foreclosures.
• Lenders do not want to take possession of illiquid real estate, especially in falling markets.

The loan modification plan focuses on people who are behind in their payments or are at risk of default.
Federal officials clarified the definition of “at risk” as those: suffering serious hardships, declines in income or increase in expenses; facing an interest rate hike; having high mortgage debt compared to income; owing more than their house is worth, or demonstrating other reasons for being close to default.
To participate in the loan modification plan, borrowers must:

• have obtained their mortgage before Jan. 1, 2009;
• have a primary mortgage of less than $729,500;
• live in the property;
• fully document their income by providing tax returns and pay stubs;
• sign a statement of financial hardship;
• go for counseling if their total household debt – including auto loans, credit cards and alimony – totals more than 55% of their income.

The modification program will be in effect until the end of 2012, but loans can only be adjusted once.

Call HousingAssist.com Today @ 888-877-0078 for a FREE analysis of your situation.

Foreclosure

Foreclosure is when the lender issues a court ordered termination of a mortgagor’s property.  This will usually happen when the borrower defaults, and is unable to make their mortgage payments moving forward.  In the past 2 years we have seen the number of foreclosures sky rocket, due to sub-prime lending.   The bank will then repossess the property and sell in in an auction.

California Defaults Slow in Q409: Data Quick

The flow of California homes entering the foreclosure pipeline slowed in Q409, another sign that the troubles in hard-hit areas are dissipating into more expensive and previously insulated areas, according the MDA DataQuick.

The San Diego-based real estate information service reported 84,568 Notices of Default (NODs) in California in Q409, down 24.3% from 111,689 in the previous quarter. It’s still a 12.4% increase from 75,230 in Q408.

California NODs reached an all-time high in the first quarter of 2009 when MDA DataQuick reported 135,431 filings. That number was inflated because of activity put off from the previous four months. The low came in Q304 at 12,417 filings.

“Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn’t necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners,” said John Walsh, DataQuick president.

Ari Afshar of Housing Assist of America, a short sale company in Los Angeles, told HousingWire that short sales are, indeed, picking up.

“We are seeing a huge increase in short sales and this is mainly due to the fact that so many potential modification candidates have been turned down. Being that they would do most anything to avoid a foreclosure, they naturally have been turning to short sales as the next best option,” Afshar said.

Most of the loans that fell into default in Q409 originated in early 2007, but the median origination month was July 2006, the same month for the previous three quarters and even the last quarter of 2008. It means the foreclosure process moved through one month of bad loans in the last year.

“Mid 2006 was clearly the worst of the ‘loans gone wild’ period and it’s taking a long time to work through them. We’re also watching foreclosure activity start to move into more established mid-level and high-end neighborhoods,” Walsh said. “Homeowners there were able to make their payments longer than homeowners in entry-level neighborhoods, but because of the recession and job losses, that’s changing. Foreclosure activity is a lagging indicator of distress.”

The foreclosure tracker RealtyTrac came to the same conclusion in its 2009 in its year-end 2009 Metropolitan Foreclosure Market Report. Although the sand states California, Florida, Nevada and Arizona continue to lead in foreclosure activity, cities like Seattle, Washington and others in Oregon are creeping up the list.

In California, the amount of Trustee Deeds recorded, which reflects how many homes and condos foreclosed, reached 51,060 in Q409, a 2.1% from the previous quarter, according to DataQuick. But despite the uptick in both defaults and foreclosures, foreclosure resales declined to a 40.7% share of the real-estate market, from 42.7% in the previous quarter. It peaked in the first quarter of 2008 with a 57.8% market share.

The top originators of the defaulted loans in Q409 were Countrywide with 5,588 loans; Wells Fargo (WFC: 28.43 -0.07%) at 3,482 loans; and Washington Mutual at 3,460 loans.

450,000 at Risk in Foreclosure

450,000 at risk in foreclosure-prevention program

By Tami Luhby, senior writerJanuary 23, 2010: 7:25 AM ET

Companies that service the mortgages have until Jan. 31 to review all trial modifications that have been underway for several months under the Home Affordable Modification Program (HAMP), according to a Treasury Department guideline issued late last month. The Treasury Dept. said it would issue new guidelines next week, but wouldn’t give details.

The goal is to clear up the backlog of borrowers stuck in trial modifications, in which a homeowner’s monthly payments are lowered to no more than 31% of pre-tax income.

Some homeowners have spent seven or eight months waiting to hear if they qualify for a permanent adjustment to their mortgages.

This directive, however, has some bank regulators concerned.

“About 450,000 homeowners currently have HAMP trial modifications and have demonstrated a willingness and ability to make timely payments for at least three months,” said Richard Neiman, superintendent of the New York State Banking Department.

“Now, unfortunately and very alarmingly, these same homeowners face the prospect of foreclosure strictly on account of documentation issues,” he said.

Paperwork has proved a major stumbling block for the president’s foreclosure-prevention program. Homeowners complain that their servicers continuously lose the documents they send in, while financial institutions argue that borrowers have not been sending in their paperwork.

Aware of the problem, Treasury officials said they plan to issue new guidance to servicers next week that will help expedite the conversion of borrowers in the trial period to permanent modification. It may also lighten the documentation requirements.

Under fire for the low number of people receiving long-term help, the Treasury Department in late November ramped up pressure on servicers to convert borrowers to permanent modifications.

Some 66,500 people have received permanent adjustments, with another 787,200 homeowners in trial modifications.

Under the president’s plan, delinquent borrowers are put into trial modifications for several months to make sure they can handle the new payments and to give them time to submit their financial paperwork.

Once the modification becomes permanent, servicers, investors and homeowners are eligible to receive thousands of dollars in incentive payments.

Overall, about three-quarters of people are making their payments on time, according to the Treasury Department.

Treasury officials already lightened the documentation requirements in the fall in hopes of speeding up the conversion process. But more needs to be done, Neiman said.

For instance, Treasury should accelerate its implementation of a standardized documentation form and the creation of a Web portal that will allow homeowners to track the receipt of the paperwork, he said. Also, it should allow servicers more flexibility in accepting alternative documents.

If this isn’t done, a lot of homeowners could soon face foreclosure, he said.

“This is a real concern to borrowers, particularly borrowers who’ve continued to make payments for three, four, five, even seven months,” Neiman said. 

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