foreclosures Archives - Page 3 of 9

Merry Christmas Moratorium

It’s that time of year again. Santa Claus is coming to town, Rudolph’s nose is blinking, and we want to let it snow let it snow let it snow! It’s also time for what’s becoming an annual tradition – a foreclosure moratorium by Fannie, Freddie and banks … a holiday reprieve if you will. From CNN Money,

For homeowners with loans through Fannie Mae and Freddie Mac, the moratorium will run from Dec. 19 to Jan. 2. During this time, legal and administrative proceedings for evictions may continue, but families will be allowed to stay in their homes, Fannie said in a statement.

“No family should have to give up their home during this holiday season,” said Terry Edwards, an executive vice president for Fannie Mae.

In addition, Wells Fargo, Chase, and Bank of America are not kicking out homeowners for several weeks.

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One in Four Homes Underwater

by Kathy T. Leave a Comment

While I do not believe my family is underwater in the value of our home, after almost nine years of living here, we are only at the “break even” point. That is absent any real estate agent fees that would be paid if we chose to sell. That is if there is no further job loss. That is barring any major medical problem and falling behind on payments.

According to MSNBC.com, 29 percent of all homes are now underwater.

Homes with underwater status are often considered risks for future foreclosure, since owners could have trouble refinancing or selling and may opt for a foreclosure via “strategic default” if they feel they will never regain their lost equity.

[Stan] Humphries estimates that home values will bottom out in 2012 at the earliest and said the foreclosure market will remain “robust” for the next two to four years.

There are a lot of unknowns in this never-before-seen housing market, but it will eventually return to normal.

However, in the informal world of the feel of everyday man on the street, there actually has been a peep of consumer confidence by some long-time businessmen in my community. There is now talk of developing a small shopping area behind one of our local grocery stores.

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Foreclosure Firm Apologizes for Tasteless Costumes

by Kathy T. Leave a Comment

Dressing as homeless people and mocking the predicament of the nearly 20,000 homeowners they foreclosed on in 2010, New York law firm owned by Steven Baum apologized today for its poor taste.

After denying to the Times that employees had mocked those who had lost their homes, the firm has in recent days acknowledged the costumes were inappropriate and apologized for last year’s Halloween party.

The news comes as foreclosures continue to create a drag on the American economy and protests have erupted around the nation to protest what activists say is rampant corporate greed and influence on government that maintains a crippling disparity between rich and poor.

When a primary component of a business is to handle a large volume of foreclosures (especially when many homes have been lost due to the bad economy) and employees laughingly mock the misfortune of the people they play a role in evicting, then yes… an apology is in order. Given the thousands of people who stood in line today in middle Tennessee for a job fair… an apology is in order. If it was me – and this is only my personal opinion – I would be mortified to be seen in the law firm Halloween photos that are all over the Internet.

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Paying Homeowners to Leave

by Kathy T. Leave a Comment

I have had only one experience with dealing with a bank to contact the unknown owner of a home. The person had lost her job and was behind on both home loans. Foreclosure was imminent. The bank I worked with was the second lien holder and in the end they lost everything – except the ability to sue the homeowner for breach of contract.

I had nothing to offer the homeowner and the lien holder really could not offer anything either. However, if a bank holds the FIRST lien on a property, they have more room to negotiate. And what they banks are negotiating is “cash for keys” where they pay homeowners to move out without destroying the house. They turn in the keys of a home in good condition for cash. From MSNBC,

[A real estate agent] She’s typically able to offer them between $500 and $2,500, depending on the lender, if they agree to move out within 30 days, leaving the place “broom-swept” clean.

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Foreclosure experts note that “cash for keys” may become more mainstream not just for foreclosures but also for short sales, where an owner is trying to sell their home for less than they owe. In those cases, the lender must agree to accept the sale price.

It makes good sense to take the money and run, especially if you’re going to be evicted for non-payment of mortgage anyway.

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No Loans for Damaged Homes

by Kathy T. Leave a Comment

I once listed a house that was terribly vandalized, but not by the owner (as so many are these days as an angry reaction to foreclosures). The home had been vandalized by neighborhood teens after it sat empty for several months. They’d set off fireworks (it’s a wonder it hadn’t burned to the ground). There were huge holes in the walls. And there was paint on carpets. The damage was so severe that the seller allowed a renter to come in for free for several months to make repairs in lieu of a lease payment. Repaired, it sold a year later.

Today, though, finding damaged homes is common. Fixtures are stripped from the home (lighting and plumbing), holes in walls, mold, the list goes on. From Zillow.com,

According to data from a survey by Campbell Communications, 13.9 percent of all real estate owned by a bank or agency in 2010 was so damaged by deliberate vandalism or harrowing neglect that the property would not qualify for a standard home loan. That has pushed the market for damaged properties toward investors, who often obtain the house at a more significant discount than undamaged foreclosures or short sales, according to the Campbell survey’s analysis.

“It’s been quite severe and drastic because so many homes don’t qualify for FHA (loans), which is the loan most people have,” explained Shaffer.

It hearkens – for me – back to why I will always leave a house clean when I move away… I don’t want my neighbor friends to hear about how awful I left my old house! Today, though, perhaps this is no as important to people.

Note: The photo caption from Zillow says the homes in the wall were damage from a hammer.

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Foreclosure for Burt Reynolds?

by Kathy T. Leave a Comment

Foreclosure can affect both regular people and the famous. Whenever it occurs, it is a sad time for those affected. It looks like Burt Reynolds – sexy star of the 60’s and 70’s and the famous “Bandit” of the Smoky & the Bandit franchise – could be on the list.

From our friends at PopFi,

As it turns out, Burt’s been forced to turn his back on Florida and his massive 4.5-acre estate in Martin County. Burt Reynolds owes Merrill Lynch a staggering $1.19 million dollars in back mortgage payments, more than a years’ worth of payments!

Hope it all works out for Burt.

Photo from mail online.

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Foreclosure Slow Down

by Kathy T. Leave a Comment

Word from RealtyTrac is that foreclosures have slowed down. Word on the street is that the next wave is about to hit. A banker friend of mine said the robosigning is being quickly cleaned up so that foreclosures are gearing up again to full court press and could possibly be even worse than the first round.

However according to Stop Foreclosure Daily Blog, RealtyTrac says they are slowing,

There were some small glimmers of hope in RealtyTrac’s report. One promising sign was the steep plunge in initial notices of default, which fell 39% year-over-year to fewer than 60,000. The decline may indicate that fewer borrowers are falling behind on payments. Or, it could mean lenders are not filing those notices as promptly as they have in the past, according to Rick Sharga, a spokesman for RealtyTrac.

Let’s hope this is good news at last.

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The Price of Parade Ready

by Kathy T. Leave a Comment

Fannie Mae has tens of thousands of homes it has to have ready for the market. I exaggerate when I say “parade ready” because there’s always something when you show a foreclosure – maybe the fresh paint thinly disguises another smell? Or the frayed carpet just is not quite right?

Meanwhile, the cost that Fannie Mae bears to get homes ready to sell is staggering. According to Real Trends,

Fannie racked up $488 million in the first quarter of this year for holding costs (insurance, taxes, and maintenance); valuation adjustments for changes in market value; gains/loss when the property is sold; legal fees; eviction costs; weatherization so the pipes don’t freeze; cost to secure the property and more.

Fannie doesn’t have a lot of options, since they want (need?) to stabilize neighborhoods so that there is some potential residual value in the home. They don’t want to have the neighborhood go into decline, putting more downward pressure on overall house prices. In 2010, Fannie did “fixes” for 87,000 homes.

The total cost? About $1.8 billion. That’s some major cash.

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Huge Supply of Homes Drops Prices

by Kathy T. Leave a Comment

The big supply of homes now for sale in the U.S. is driving home values down even more. Double dip, anyone?

Although some areas still boast fairly competitive REO (or bank-owned) sales – there is plenty of competition as buyers try to snatch ones in good condition for low, low prices – other areas have some ugly price drops going on.

According to CNN Money,

But in some areas, the discounts were ever greater: In New York State, the discount for REOs was 53% during the first quarter. And it was nearly 50% in Illinois, Ohio, and Wisconsin.

Also weighing on market prices are “short sales,” homes where the selling price is less than what is owed by the borrowers. These sales sold at an average 9% discount.

Including both REOs and short sales, Ohio had the biggest discount of any state, at 41%.

Terrible news for sellers in those states.

New construction in my own area recognizes the overabundance of existing homes for sale. In my town, only three permits were pulled last month where in 2005 there were at least ten times that amount. The waiting for a housing recovery continues.

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Memorial Day Marks Making Things Right for Military

by Kathy T. Leave a Comment

During the ongoing mortgage meltdown fiasco, we have seen a lot of military personnel lose their homes thanks to the same problems faced by the general population. We have been in underwater, second mortgage rates have jumped in price to the point of being unpayable, and job loss or medical issues have hammered the population.

In all this, we have also found many military families have lost their homes because they were improperly foreclosed upon. And by “we” I mean federal investigators.

What did they do? For starters from MSNBC.com,

The law the lenders were accused of violating, the Servicemembers’ Civil Relief Act, provides protections to military personnel. Under the law, they can’t be evicted and creditors can’t seize their property while they’re on active duty.

The Justice Department began its investigation earlier this year after separate inquiries from the U.S. Marine Corps and Sgt. James Hurley, whose home in Hartford, Mich., was foreclosed upon by Saxon in 2005 while he was in Iraq. Hurley settled with Saxon earlier this year for an undisclosed amount.

Shame!

It is an honor to salute all our military personnel today – both currently serving, those who served in the past, and for the members and their families who gave their lives for the freedom we all enjoy today. Thank you, our military families!

Photo by Dru Bloomfield via flickr creative commons.

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