Foreclosure Listings Blog

On February 18, 2009, President Obama revealed his plan for dealing with the sinking US real estate market. The $75 billion plan targets the growing number of foreclosures in the country and will offer relief to homeowners who have been responsible with their sub prime loans but because of personal tragedy or rising interest rates are falling behind with mortgage payments. It is expected that the plan will help 9 million Americans who face foreclosure on their homes.

The plan will specifically help those who are unable to get financing because their homes are worth less than their mortgages, an increasing reality in parts of the country where housing prices have dropped significantly since last year. The plan will also help make monthly payments on mortgages more affordable for some families. President Obama’s plan focuses on families who are in danger of falling behind on their mortgage. Some families facing loss of their home will have their loans modified or will have their home loans refinanced.

The President’s plan will mean that government money will go to mortgage companies who reduce interest rates on specific loans. Mortgage companies will need to cap their mortgage payments at no more than 31% of some borrower’s incomes to qualify for the money. More government money will also be given to Fannie Mae and Freddie Mac to stabilize the mortgage economy in the near future.

President Obama has stated that his plan is for families who are playing by the rules but who need help. However, although he has stated that his plan will not bail out speculators, it is possible that when the plan comes before Congress, Republicans and some Democrats may oppose it. Some Republicans and Democrats are already raising questions, noting that the plan only helps 9 million Americans when many more million homeowners are in trouble. Some also want to know what will happen to lenders who offer bad loans. Republicans and some Democrats are also wondering whether homeowners who misrepresented their finances on home loan applications will qualify for the assistance.

Investors are likely not worried about the foreclosure market. Even if the housing package passes, there will still likely be many foreclosures on the market at discount rates. At the same time, the economic boost may mean more qualified buyers and renters who may want to buy or rent from investors.

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As the housing market situation continues to get worse and foreclosures continue to mount, mortgage finance company Fannie Mae said last Monday that it will most likely need $16 billion from government aid.

Last fall, Fannie Mae and sibling company Freddie Mac were seized by federal regulators after tackling with rising foreclosures and increasing losses on house loans they supported during the housing boom. Fannie Mae sent a $29 billion loss during the third quarter, largely because of a $21.4 billion cash charge to decrease the value of tax credits that have become worthless.

The confession made by Fannie Mae came after Freddie Mac revealed last week that it is possible to need about $35 billion in terms of federal support, which is in addition to the $13.8 billion it has received in 2008. Fannie Mae’s estimation of $16 billion may differ materially from the actual amount required since its financial statements for the last quarter of 2008 are currently being organized.

In addition, Fannie Mae’s net worth plummeted to $9.4 billion by the end of September from $44.1 billion as 2007 ended. If that figure becomes negative, the company will be forced to get funding from the Treasury Department.

The mortgage giants were taken over by the federal government during the fall of last year after suffering from considerable losses incurred when they decided to back mortgages during the last housing boom.

Any help for Fannie Mae or Freddie Mac will be officially requested by the Federal Housing Finance Agency, the companies’ federal regulator.

Analysts also assume that the legislation permitting judges in bankruptcy courts to decrease the principle balance of the mortgage or even just the interest will also result to a decrease in mortgage securities value kept by Fannie Mae and Freddie Mac.

If the legislation is approved, it will most likely yield an extra $20 billion that could be used as taxpayer aid, benefiting both companies, which will also decrease foreclosures to 20 percent, according to Credit Suisse analyst Moshe Orenbuch.

President Barack Obama, along with majority of Democrats in the House of Representatives, support the legislation which can also help lower foreclosure, while groups standing up for the lenders have decided to ramp up their lobbyists to put the bill to a stop.

As foreclosures get back to an upward trend after a temporary slowdown in December 2008 due to foreclosure suspension initiatives, the number of homeowners falling prey to scammers and swindlers also soars.

The swindlers create fly-by-night companies and market them as legitimate foreclosure rescue services with special connections to mortgage lenders. They create web sites similar to that of the Federal Housing Administration and the Hope Now program to make it appear that they have been given authorization by federal agencies to negotiate with lenders. They use television ads, distribute flyers and mail documents to inform troubled homeowners they can easily avoid foreclosure or reduce monthly payments if they avail of the companies’ services.

The cases of California resident Maria Martinez and Illinois resident Carol McClelland illustrate how homeowners troubled by foreclosures are easily swayed by swindlers. Martinez said her desperation forced her to pay $1,000 to a company that promised to lower her monthly payments. McClelland says Foreclosure Solutions Experts called her after she was notified of foreclosure and promised to block the foreclosure and reduce her monthly amortization.

Ira Rheingold, head of the National Association of Consumer Advocates, explains that borrowers are forced to turn to sweet-talking brokers because their mortgage lenders refuse to negotiate with them or offer them repayment plans that they can not afford.

Attorney generals in California, Florida, Maryland and Illinois said the number of lawsuits against fraudulent companies and swindlers have been rising at an appalling rate. Angela Rosenau, a California deputy attorney general, cited over 300 complaints against fraudulent firms in 2008. Florida’s Attorney General Bill McCollum sued a firm that victimized more than 600 homeowners. Michelle Garcia, an Illinois assistant attorney general, said the lawsuit against Foreclosure Solutions Experts is just one of 22 foreclosure-related cases being investigated by the state.

To avoid being victimized, Marietta Rodriguez, head of housing programs at NeighborWorks America, says troubled borrowers should approach nonprofits and community organizations that provide foreclosure counseling.

Attorney General Lori Swanson has proposed a plan, the Homeowner Lender Mediation Act, which will require lenders to offer homeowners in Minnesota to renegotiate their mortgage terms to avoid foreclosure.

The continuing accumulation of foreclosure would probably not slowdown without fully showing its effects. Gayle Henderson an alarmed property expert of RE/MAX Excalibur pointed some of the effects of having a foreclosure, with the hope of solving the booming of loan problems.

Because of the rise in foreclosure cases, frauds have seen a new opportunity to make money. While some foreclosure prevention companies may be legitimate, others are simple scheming. They promise to save distressed owners from foreclosure but they just collect money from homeowners and deliver no service at all. Spare yourself from being [...]

Attorney General Robert E. Cooper spoke in the 2008 Governor’s Housing Summit in Nashville, Tennessee. He warned against the growing foreclosure rescuers in Tennessee that turned out to be predators.

The Nassau/Suffolk Law Services Committee has set up its Volunteer Lawyers Project at the Nassau County District Courthouse located in Hempstead where Long Island foreclosure cases are decided every day.

Since foreclosure is still escalating all over the country, FDIC Chairperson Sheila Bair proposed to use $24.4 billion from the $700 billion Troubled Asset Relief Program (TARP). She is now appealing to the incoming Obama administration to see this fund through.

December 11, 2008 is the deadline for state and local officials to avail of a U.S. Housing and Urban Development (HUD) aid to help stop the surge of Georgia foreclosures and restore communities and neighborhoods plagued by abandoned and vacant properties.