Archive for the ‘Foreclosure’ Category

Terrible things happen when common people feel pushed to the limit and unable to win in a game where the deck is stacked against them. This appears to be the case in the recent events that took place in Austin Texas where a man deliberately crashed a small aircraft into offices used by the Internal Revenue Service.  As it turns out, violence directed against the I.R.S. is all too common.

The same feelings of helplessness and anger boil over when people are put out of their homes as a result of foreclosure.

In the latest incident, an Ohio man took a bulldozer to his home instead of letting the bank get it in foreclosure proceedings. Terry Hoskins owed $160,000 on a mortage on the home, which was valued at $350,000. He told a local news affiliate that “As far as what the bank is going to get, I plan on giving them back what was on this hill exactly (as) it was. I brought it out of the ground and I plan on putting it back in the ground.”

Check out the video of the home before and after, and hear from Terry in his own words describe why he did it.

The Obama administration’s program for helping troubled mortgage borrowers avoid foreclosure has been less than a success. Few people received long term help because of the onerous amounts of paperwork needed for the processing of loan modifications and the unwillingness of banks to dedicate sufficient staff to handle it all.

Obama has been under fire for not doing enough to ease the burdens of the unemployed and middle class families at risk of losing their homes and his recent State of the Union speech reflected his newfound dedication to the cause.

So in an attempt to improve the efficacy of his anti-foreclosure programs, the Treasury Department offered up changes designed to accelerate the processing of the burdensome paperwork required for its foreclosure relief plan, according to people briefed on the matter.

Like so many of the big government programs launched by this administration, there’s been a lot of money allocated ($75 billion in this case) and little quantifiable results. Americans are now looking for accountability in the face of rising national debt and this change in course should provide more measurable benefits.

The new rules, which start June 1, will effectively shift the paperwork burden to the start of the process.

“They aim to make it easier and quicker to provide permanent modifications,” said U.S. Treasury Assistant Secretary Herb Allison. “These changes also will enable servicers to process more efficiently and handle more volume effectively so we can help more people more rapidly.”

Lenders will now be required to collect two pay stubs at the start of the process, and borrowers will have to give the Internal Revenue Service permission to provide their most recent tax returns at the same time, according to the people who declined to be identified because the details were not yet final.

Participating mortgage companies must acknowledge receipt of a borrower’s application within ten days and approve or deny the application within thirty. Under the new rules borrowers will still be required to make three months of trial payments before the modification becomes permanent.

If you are behind in your mortgage and don’t have a plan to keep your home, contact your lender immediately and to learn more about government programs that may help visit http://makinghomeaffordable.gov.

We already reported on the record rise in bankruptcy filings in 2009, and as you might have expected, the news on foreclosures was just as bad.

The foreclosure marketing and real estate website RealtyTrac reports that nearly three million properties received a foreclosure filing in 2009, a new record. That’s an increase of 21% over 2008′s total and more than twice the number of foreclosures in 2007.

The deep, lasting recession and persistent unemployment has trumped all efforts to shore up the housing market and stave off the rapid rise in foreclosures.

However, loan failures would easily have been even worse without these foreclosure prevention programs.

Nevada was number one, recording the highest rate of foreclosures at ten percent. It was followed by Arizona at 6.1%, Florida at 5.9% and California, 4.75%. This mirrors the boom-and-bust states that had the biggest run-ups during the housing bubble and where so many homeowners are now underwater, owing more on their homes than their homes are worth.

As a result of the huge rise in negative equity loans, more borrowers are choosing to simply walk away, taking the hit to their credit but potentially saving hundreds of thousands of dollars.

The rise in these “strategic defaults” is a growing concern  because they are not limited to people who are struggling to make payments. Although it’s not known how many foreclosures are a result of otherwise viable borrowers washing their hands of their homes, it has become an acceptable financial tactic and the problem has gotten the attention of lenders in a major way.

You do not want to become part of the new statistics in 2010. If you are falling behind in your home loan payments remember that your first course of action is to contact your lender (and as often as need be until you get through to someone who can help.) They have an incentive to keep you out of foreclosure and can offer work-outs to help. Also check out Making Home Affordable, the Federal government’s website devoted to assisting homeowners refinance or get loan modifications.