Foreclosures Scenario in the United States

Right now, in the U.S. thousands of people are losing their homes and other properties due to foreclosures. Sadly, the Midwest part of the country has the highest number of foreclosures happening every year and such a high numbers of mortgages and auctions are affecting the real estate scenario of the country. The percentage of foreclosures has gone up to 47% since the last year and is increasing with time. It is being predicted by economists that these mortgages are going to rise in the coming months. According to Economist David Shulman of the UCLA Anderson Forecast, foreclosures will continue to rise for the remainder of the year as more adjustable-rate mortgages reset. California has the highest foreclosure rate and is set to rise.

Foreclosure is a complicated process and raises a number of questions in people’s mind. After the property is mortgaged and auctioned, where does the property go and what happens of it? How do bankruptcies come into picture? How is the real estate situation of the country? These questions are on everybody’s mind and here is some information that will help you understand these questions and their answers. To understand what the effect of foreclosures is, you first need to understand what a foreclosure is.

When a group fails to make payments or dues usually up to 3 months, the authorities take an action against the mortgage borrowers and the lender has the right to take over the property after the process of the foreclosure is complete and the borrower still hasn’t been able to pay the complete dues. Approximate time taken by the process to be complete is 5 to 6 months and after the process the borrower has to leave the place as he or she loses all right to that property.

What happens to mortgaged property?

Auctions

As the rights of the property now rest with the lender, in many cases the bank, there are many options available to them to make use of the property. First option is mortgaging the property right away. The lender puts the property on auction at the time when the foreclosure deal is finalized and the lender takes in whatever the highest bidder has to pay to collect their dues. Most of the time, the new owner get the rights the property in a lower-than-retail price and in this case sometimes the lenders get partial payment for the dues and again the mortgage borrower is entitled to pay the rest of them.

Bank-Owned property

When the bank or the mortgaged lender comes in terms with the fact that the property owner many not be able to give back the dues that had to be given as repayment, the bank or the group decides that they will wait for a better opportunity to sell the property so that they get better returns out of it. This means there will be a delay in selling the property and such property is often called as bank owned property. One problem that arises in bank owned property is that the bank has to maintain it and it takes a lot of resources which is expensive. Thus when not done properly it reduces the value of the place and the banks are not able to sell it.

How do bankruptcies feature in foreclosures?

When a person’s property is going to be mortgaged, one option to avoid losing is to file the form of bankruptcy. Most people think after filing the bankruptcy, nothing can go wrong and they will never lose their house but that is not the case. When filing for a bankruptcy, there are two forms; chapter 7 bankruptcy and chapter 13 bankruptcies. The chapter 7 can you help you delaying the foreclosures with the help of the order known as automatic stay and chapter 13 can sometimes save your home as you can sit with the lender and work out a repayment plan, though not everybody can file chapter 13.

Thus, while borrowing money from bank or other mortgage lenders, a proper risk assessment should be done and extra resources counted so that the situation doesn’t arise. A good bankruptcy and foreclosure attorney can also be of help to prevent foreclosures. No matter how easily or simply somebody puts it, foreclosure is a stressful process and takes a lot of resources and time and poses a threat to the safety of your family and loved ones if such a situation arises.

House Repossessions In The South East

Current property repossessions are at an all time high in the Kent region of Thanet, provoking even more worry and misery for those that are currently struggling to keep their heads above water. Or rather a roof over their heads.

Despite the combined efforts of charitable organisations, bank-led schemes and of course the home-owners themselves, house repossession numbers remain far too high for many, and too close for comfort for others. What’s truly frightening is the fact that one home owner, under threat of eviction, turned to a local mortgage rescue scheme for help.

Due to the fact that the rescue scheme’s wheels turned far too slowly, the home owner found himself despairing, until he turned to the Citizens Advice Bureau. Thankfully, with some help from the CAB, he managed to rescue his situation at the 11th hour and has managed to keep his home and has got his finances back on track.

Unfortunately that’s not the case for everyone in the region and Thanet residents continue to struggle to meet their mortgage payments, and arrears abound throughout the area. Another area of the housing market that’s massively struggling is the rental one, with hundreds of individuals finding themselves evicted due to rent arrears.

According to recently published figures, rental repossession crept up around 27%, and it’s believed, in part, to be due to the 10% year on year increase in rental prices. Looking back over the last few years, demand for rental properties has continued unabated and landlords have reacted accordingly.

Unfortunately the persistent rise appears to have left many renters out priced, thus leading to the inevitable – evictions and the more house repossessions up and down the region. Of course there are some that claim the figures to be disproportionate to the actual number of residents, rental properties in comparison to other parts of the county.

However the figures are what they are and there must be some cause for concern as the recent spate of repossessions have cause the CAB to look into offering a new service to those living in the local area – they’re looking for funding for a project that will allow them to inject direct help to those that need it the most.

If you live in the Thanet region, and you need help in relation to mortgage or rent arrears, or you’re simply looking for some solid financial advice, you can contact your local CAB direct, or visit their website in order to make an appointment.

A Spanish protest

A Spanish protest.

As we come out of the socialist party offices, past the gleaming bust of Karl Marx which stands inside the doorway, suddenly I heard it, witnessed it, the Spanish reaction to property foreclosures sweeping the country, the sound of my very first cacerolada, the tactic is copied from Argentina when it also went bust in 2002, the idea lacks subtlety yet  appears to be affective, protesters block the streets banging pots and pans, these particular protesters are women, office workers mostly aged over 40 and well dressed,  they have spread themselves in a line across the road, blocking the traffic  at one of Madrid’s busiest intersections, they bang their pots and pans and chant, “the bailouts are rewarding the Banks” they say, but insist they  are doing nothing to ease the suffering of families laid low by the economic crisis. People are losing their jobs a woman tells me, decent families with children, living on the street, surviving on handouts and charity. This was one of many caceroladas I have witnessed in the last two weeks.

When Bankia Spain´s fourth largest banking group had to ask for a 4 billion euro bailout, followed by another  19 billion when the initial 4 was not enough I saw the same type of protest involving pots and pans again, deployed primarily outside many of its branches.  But Spain’s problem is not just its banking  system  the country’s economy  was buoyed up for a decade by the very property boom that the banking system fed, so now they are left with bankrupt banks and a shrinking economy,  with protests  happening up and down the country and no decisions as of yet by the government, the situation is set to worsen with one in four unemployed,  people from all sectors seeing their wages and pensions cut, all kinds of ordinary people have taken to the streets using methods copied from and sometimes aided by the M15 movement the hard core anti capitalist youth movement who occupied Spain’s Plazas over a year ago, but the new breed of  protesters are well aware that the constant  banging of utensils on Teflon is at the moment merely  acting as a kind of release valve on the feeling of social discontent.

Later I met a group of squatters who had occupied a block of flats in Seville after losing their own homes to repossession; they were planning a protest of this kind themselves outside the electricity company headquarters that had just recently disconnected the electricity to the building. The squatters mainly families, calling themselves Barrios en Lucha which translates as ‘neighbourhoods in struggle’ were evicted from their own homes when they were repossessed by the banks, released a statement

‘Twenty families in urgent need of housing, organised through the 15M movement, have squatted an empty building in Avenida de Juventudes Musicales, (the Avenue of Musical Youth!) to make homes for themselves there under the name of Patio of Neighbours “La Utopia” and to “make visible the terrible housing problem that so many people suffer. The building has been empty since it was completed in 2010. Instead of it sitting empty, twenty families have made it their home’.

The building in question  is an empty apartment block, never been lived in since it building work was completed in the year 2010,  it was previously owned by a large property company, since declared bankrupt, it is presently owned by the bank Ibercaja, the number of families now squatting has recently  risen to 36, some had simply fallen into rent arrears and been evicted, but the majority were still the victims of bank repossession, the people inside are a mixture of ages from the very young to the very old, some in a state of serious ill health, but even this has not stopped them being constantly harassed  by the local government, water and electricity have been disconnected, One woman I spoke to was previously living in a block of flats from which thirty families have been evicted, in an area called La Macarena which has the highest rate of mortgage foreclosures in Seville. If this continues I fear a lot more cacerolada´s will be heard ringing through the streets Spain.

Property Repossessions – How Are We doing?

There are many things in life that are stressful, and property repossessions has got to be one of the worst. During the last 3 or 4 years, foreclosure procedures on both sides of the Atlantic has caused countless families to lose their homes.

Whilst recent reports in the US state that repossessed homes are on the downturn, a closer look at figures would suggest otherwise. The recent figures are de facto but the speed with which properties are being processed is more the deciding factor re the numbers than an actual slow down in repossessions.

It’s no different in Europe, with vast numbers of Spanish home owners losing their homes on a daily basis. In the heart of the financial mess is Mercia, an area widely advertised a few years back as being some kind of Mecca for overseas property developers. Ordinary home owners were also targeted, with many a UK resident jumping ship and buying what they thought would be their Spanish Shangri-la.

Fast forward to the Spring of 2012 and disaster abounds. Properties are unfinished, complexes deserted. Beautifully constructed blacktop stretches for miles, then simply terminates. Manicured and lovingly tended golf courses are little more than expensive, ornamental landscaping and hotels, stores and bars remain unused.

The Spanish banks are groaning with the effort of trying to sustain a weakening economy and the rest of Europe has averted its eyes whilst praying for a financial miracle. Elsewhere, in the UK reports were published (at the end of May) that stated that house prices had fallen below those enjoyed during 2005.

In seven years, the UK householder has seen a significant drop in the value of property, and just like their American counterparts, it doesn’t look as though things are going to change anytime soon. Property repossessions continue to increase, despite the fact that UK banks have tried to create a better relationship between themselves and their borrowers.

Ireland fares no better, with house prices continuing to fall, and looking elsewhere in Europe it looks as though the entire continent is barely managing to keep a roof over its head. What does all this mean for the average home owner? Simply that you’re not alone, and that the world continues to struggle to regain the financial foothold it enjoyed prior to the 2008 crash.

What can you do to avoid going through a property repossession?

  • approach your bank/lender and discuss your future options. Banks aren’t gaining anything from foreclosures, so see what they can offer by way of support and negotiation. Ask for an extension, see if you can alter the terms of your mortgage; in short explore your options with your lender
  • if it’s possible to do so, try and sell your home. Better to off-load debt that you can’t manage, than to hang on for grim death
  • consider renting. There remains a high demand for rental property, and it may well be worth you moving out and renting your home out, whilst you (in turn) rent somewhere for yourself
  • seek financial advice elsewhere. There are a variety of charitable organizations around the country, make an appointment

Whatever you do, don’t hand your keys over and walk away, Turning your back won’t solve anything in the long term, and you may well find yourself before the court for more than just the mortgage debt itself.

Link: need realistic mortgage advice? Click here.

HUD TO EXPAND SALE OF TROUBLED MORTGAGES THROUGH PROGRAM DESIGNED TO HELP BORROWERS AVOID COSTLY, LENGTHY FORECLOSURES

Enhanced FHA note sale program part of Obama Administration effort to address shadow inventory, target relief to hardest hit communities

CHICAGO – Thousands of borrowers severely delinquent on loans insured by the Federal Housing Administration (FHA) will have help from a new servicer to explore affordable mortgage solutions or achieve a favorable resolution under an enhanced government note sale program announced today. In a press conference held at the 2012 Clinton Global Initiative America Meeting, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and Acting FHA Commissioner Carol Galante launched the Distressed Asset Stabilization Program, an expansion of an FHA pilot program that allows private investors to purchase pools of mortgages headed for foreclosure and charges them with helping to bring the loan out of default.

“While our housing market has momentum we haven’t seen since before the crisis, there are still thousands of FHA borrowers who are severely delinquent today – who have exhausted their options and could lose their homes in a matter of months,” said HUD Secretary Shaun Donovan. “With this program, we will increase by as much as ten times the number of loans available for purchase while making it easier for borrowers to avoid foreclosure. Finding ways to bring these loans out of default not only helps the borrower, but helps the entire neighborhood avoid the disinvestment and decline in value that accompanies a distressed property.”

The FHA note sales program began as a pilot in 2010 and has resulted in the purchase of more than 2,100 single family loans to date. A servicer can place a loan into the loan pool if the following criteria are met:

  1. The borrower is at least six months delinquent on their mortgage;
  2. The servicer has exhausted all steps in the FHA loss mitigation process;
  3. The servicer has initiated foreclosure proceedings; and
  4. The borrower is not in bankruptcy.

Under the program, FHA-insured notes are sold competitively at a market-determined price generally below the outstanding principal balance. Once the note is purchased, foreclosure is delayed for a minimum of six additional months as the borrower gets direct help from their servicer to help to find an affordable solution to avoid foreclosure. The investor purchases the loan at a discount and then takes additional steps to help the borrower avoid default, whether through modifying their loan terms or helping them through a short sale, in order to maximize the return on the sale.

“The Distressed Asset Stabilization Program offers a better shot for the struggling homeowner and lower losses to the FHA,” said Acting FHA Commissioner Carol Galante. “By addressing the growing back log of distressed mortgages, FHA is helping to mitigate the negative effects of the foreclosure process as part of the Administration’s broader commitment to community stabilization.”

Beginning with the September 2012 scheduled sale, FHA will increase the number of loans available for purchase from approximately 1,800 each year to a quarterly rate of up to 5,000, and add a new neighborhood stabilization pool to encourage investment in communities hardest hit by the foreclosure crisis.

In an additional safeguard against blight, HUD will require that no more than 50 percent of the loans within a purchased pool become real-estate owned (REO) properties and – if the servicer and borrower are unable to bring the loan out of default – that the servicer hold the loan for at least three years.

“Currently, FHA’s inventory of REO properties available for sale is at its lowest level since FY 2009,” added Galante. “At the same time, the inventory of seriously delinquent loans is near an all time high. With many neighborhoods still fighting to recover from the housing crisis, going upstream will allow us to help more borrowers before they go through foreclosure and their homes ever come into the REO portfolio.”

BANK OF AMERICA AGREES TO PAY MORE THAN $160,000 TO SETTLE MATERNITY DISCRIMINATION CLAIM

Bank of America to pay in maternity discrimination case

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) announced today that Bank of America has agreed to pay up to $161,180 to settle allegations that one of the bank’s San Jose, California branches refused to refinance the mortgage of an Irvine woman because she was on maternity leave. HUD reached the agreement with Bank of America to resolve a Fair Housing Act complaint that had been filed by the Fair Housing Council of Orange County (FHCOC).

Bank of America to pay in maternity discrimination case

 

The Fair Housing Act prohibits housing discrimination in mortgage lending and real estate-related transactions based on a person’s race, color, national origin, religion, sex, family status and disability. Refusing to approve a mortgage loan or provide refinancing because a woman is pregnant or on family leave violates the Fair Housing Act’s prohibition against sex and family status discrimination.

“The Fair Housing Act prohibits lenders from denying home loans to women because they are pregnant or on maternity leave,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Today’s settlement follows HUD actions involving other lenders across the country which we will continue until maternity leave discrimination is eliminated.”

The woman told FHCOC, a non-profit fair housing organization funded by HUD, that in December 2009, a Bank of America agent offered her a 5% interest rate for a home refinance loan, with no costs or fees. But in January 2010, after she had applied for the loan and supplied the necessary documents, the bank allegedly refused to process her application because she was on maternity leave. In her complaint, the woman alleged that a bank agent told her that she would have to return to work full-time in order for her loan to be approved. Even after she informed the bank that she received the same rate of pay and benefits while on maternity leave, the bank would not process her application. In March 2010, the bank finally approved the woman’s application, but by that time the interest rate on her loan had increased to 5.25%, making each loan payment higher.

A Bank of America official said: “We regret our treatment of the applicant. We take our Fair Lending responsibilities very seriously and will work with HUD to ensure our customers on maternity leave are treated appropriately during the mortgage application process.”

Under the terms of the Conciliation Agreement, Bank of America will pay $30,000 to the woman, $16,180 to her attorney, and $15,000 to FHCOC. The bank will also create a $100,000 Compensation Fund to pay damages to loan applicants or borrowers who may have been denied a loan, subjected to adverse loan terms, or had their loan applications delayed because they were pregnant or on maternity leave. In addition, the bank is requiring all of its loan officers nationwide to complete annual fair lending training.

Anyone who believes that a bank has discriminated against them during the mortgage application process because they were pregnant or on maternity leave should contact HUD at 1-800-669-9777 (voice), 800-927-9275 (TTY).

RESIDENTIAL MORTGAGE-BACKED SECURITIES (RMBS) WORKING GROUP ANNOUNCES NEW RESOURCES TO INVESTIGATE RMBS MISCONDUCT

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WASHINGTON – The Residential Mortgage-Backed Securities (RMBS) Working Group announced new resources today in the ongoing effort to investigate misconduct, including the launch of a RMBS website to report fraud and the creation of a coordination team to facilitate the various investigations underway around the country.

The RMBS Working Group is a collaborative effort led by five co-chairs including Assistant Attorney General for the Criminal Division Lanny Breuer, Acting Assistant Attorney General for the Civil Division Stuart Delery, U.S. Attorney for the District of Colorado John Walsh, Director of Enforcement for the U.S. Securities and Exchange Commission (SEC) Robert Khuzami, and New York State Attorney General Eric Schneiderman. The working group and its members are focused on investigating potential false or misleading statements, deception or other misconduct by market participants in the creation, packaging and sale of mortgage-backed securities. While the working group and its members’ specific efforts are law enforcement sensitive and, therefore, must remain confidential, generally the working group continues to: identify specific RMBS offerings for priority investigation through the use of various forensic tools including risk-based analytics; analyze pending private RMBS litigation throughout the country for important evidentiary connections to existing law enforcement investigations; and convene operational meetings among investigators, attorneys, analysts and RMBS market experts and insiders.

“The RMBS website is a new call to those insiders who know about fraud that occurred in the RMBS market, who know it’s time to expose that fraud, and who want to help us hold accountable those individuals and institutions who broke the law in pursuit of even bigger paydays,” said Acting Associate Attorney General Tony West. “Although the working group and its members have done a tremendous amount of investigative work already – including having issued more than 25 civil subpoenas – we know that hearing from insiders is particularly valuable. There are scores of people who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy. We want to hear from them.

Acting Associate Attorney General West also noted that whistleblowers enjoy legal rights that protect their ability to speak out without the fear of retaliation. “When whistleblowers summon the courage to come to us, we will do everything we can to maintain their confidence and trust,” he said.

Each co-chair agency brings investigative resources and existing RMBS investigations to the working group. To facilitate communication and coordination among the various agencies conducting RMBS investigations nationwide, the five co-chairs and the Task Force’s Executive Director have appointed a coordinating team. Matthew Stegman, a career white-collar prosecutor, is the RMBS Working Group’s Coordinator. In addition to the selection of Mr. Stegman, the coordinating team in Washington includes criminal prosecutors and civil attorneys, analysts and FBI investigators who are coordinating federal and state fraud investigations nationwide.

“The working group’s approach to RMBS investigations is systematic and smart – cross-agency teams comprised of experienced prosecutors and investigators utilizing market experts and risk-based criteria to triage transactions for review, and bringing to bear the entire palette range of state and federal legal theories and remedies,” said RMBS Working Group Co-Chair Robert Khuzami, Director of the SEC’s Division of Enforcement. “The numbers reveal the working group effort and commitment; the SEC alone brings to the effort more than 40 SEC staff from eight SEC offices trained in securitized products. The SEC teams bring substantial ongoing investigatory work to the effort as well. Since 2010, the SEC has issued over 300 subpoenas or document requests resulting in more than 30 million pages of documents with interviews or sworn testimony taken from over 180 witnesses, all focused on whether firms failed to disclose important information when selling RMBS securities.”

A broad coalition of state and federal officials have dedicated lawyers, investigators, analysts and staff – currently over 100 strong – actively engaged in RMBS investigatory work at the Department of Justice, the U.S. Attorneys’ Offices, the SEC, the New York State Attorney General’s Office, U.S. Department of Housing and Urban Development, U.S. Department of Housing and Urban Development’s Office of Inspector General, FBI, and Federal Housing Finance Agency’s Office of Inspector General, as a result of these focused efforts. Investigating and bringing complex white collar civil and criminal cases can be a time-consuming and challenging process, but the resources, enthusiasm and organization brought by the members of the RMBS Working Group have already resulted in substantial strides toward that goal.

“Over the last 100 days United States Attorneys across the country have responded enthusiastically to the call to address this important enforcement initiative,” said RMBS Working Group Co-Chair John Walsh, U.S. Attorney for the District of Colorado. “Dozens of Assistant U.S. Attorneys and other staff are actively engaged and we expect that the energy and resources for this effort will continue to grow.”

The working group will hold a two-day meeting at the Washington, D.C., headquarters of the SEC from May 31 to June 1, 2012. The group is expecting more than 180 attorneys, agents, investigators and analysts from working group member agencies and offices around the country to attend the event, both in person as well as by video at several SEC regional offices. This will be the third time the full working group has met, though the co-chairs and Executive Director of the Task Force have held formal weekly conference calls and have had more informal discussions on an almost-daily basis. The two-day event will be an opportunity for prosecutors, civil attorneys, regulators, state attorneys general, law enforcement agencies and true experts in the field to discuss and learn from ongoing investigations, identify new potential targets and successful legal theories, and coordinate strategies.

To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html

Cleveland Levels Foreclosed Homes to Revive Neighborhoods

All around Cleveland, foreclosed properties are being torn down, rebuilt, or used for other purposes.  This is an excellent video to see what Cleveland neighborhoods are doing to fight the aftermath of foreclosure.

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Foreclosure Negotiations Settlement Scheduled Target is July 13, 2011

Some of the biggest banks in the United States are about to settle state and federal claims over faulty, and fraudulent foreclosures.  The target date for the settlement with Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial is Wednesday, July 13, 2011.

The settlement is expected to exceed $20 billion, forming state and federal funds to provide relief to mortgage borrowers.  The case has been focused on how banks treated customers during the rise in mortgage defaults.  This case is just one in many cases regarding issues of negligent, faulty, and possibly criminal activity related to mortgage and foreclosures.

Some of the issues that are related include compensating people whose homes were improperly seized.   Other issues include the institution of funds for states including Ohio to resolve civil mortgage complaints as well as a separate federal account that would require them to provide a specific amount of mortgage relief to borrowers.

I will be thrilled when this is settled as it is just one more piece of the puzzle that we need to put the Ohio economy back on track, but I am sure that whether they meet the deadline of Wednesday or not, we will be hearing about this topic for quite some time to come.

JPMorgan Chase Has to Pay Ohio and Other States Over Bid Rigging

Ohio has been caught up in another case involving JPMorgan Chase which affects our economy and the ability for the state and local municipalities to create jobs and income for Ohio residents.   JPMorgan Chase is going to pay out in total $211 million, a number that is so high I can’t even imagine what that amount is, after admitting that one of its divisions rigged dozens of bidding competitions to win business from state and local governments.  Unbelievable!

Bid rigging means that the bidder has a chance to see competitors bids before the final bid is cast, giving the bidder an unfair advantage on the bid.  Why is this bad for states?

Banks help municipalities invest the money they raise from bond offerings to earn interest before they use the money for various projects.  Competition allows the municipality to earn the best yield possible.  By bid rigging, the competition is not real, and it denies the municipality the best yield resulting in less income earned.

Complaints were filed by the SEC, the IRS, bank regulators and state attorneys general.  Part of the money is paying off a civil fraud charges.  From this amount of money, Ohio will receive $1.2 million, and the City of Cleveland, the Columbus Regional Airport Authority, and the Ohio Public Facilities Commission will also receive money.  Just one more case of the big banks taking money out of taxpayers pockets that has contributed to the economic recession.