Foreclosure1 Blog http://www.foreclosure1.com/blog Find real estate foreclosure news! Fri, 09 May 2008 04:46:00 +0000 http://wordpress.org/?v=2.3.2 en Commonly Given Reasons For Foreclosure Crisis http://www.foreclosure1.com/blog/foreclosure-crisis/commonly-given-reasons-foreclosure-crisis http://www.foreclosure1.com/blog/foreclosure-crisis/commonly-given-reasons-foreclosure-crisis#comments Fri, 09 May 2008 04:42:43 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure-crisis/commonly-given-reasons-for-foreclosure-crisis The most commonly given reasons for the foreclosure crisis is predatory peddling of sub-prime mortgages (ARMs) to gullible ignorant buyers. Those who contracted the mortgages are not above blame – they falsified their incomes, wrongly took the help of unscrupulous appraisers to raise the value of the houses being mortgaged so as to avail of generous loan amounts. The lenders too turned a blind eye and allowed this to happen. The same can be said of the government that decided to look the other way indirectly permitting such laxity. Despite these obvious reasons there is more to it than meets the eye. The question is – what is the deep rooted malaise rooted in the economy of the country that has exploded into this foreclosure crisis? Foreclosure is merely the symptom of the disease.

Americans in generally are weak in financial education and do not know about the nitty-gritty of budgeting their own income. They have been easily lured by a cleverly manipulated media, into a devastating loan culture. The politicians lack statesmanship. They are more like dons controlling mobs without having hindsight or foresight. Thus leaders and followers only live for the present. This has led to massive over spending by the warlords ruling Washington, hand in hand with the bureaucrats. They spend more than what the tax kitty holds. To make up for the shortfall they borrow from China and other countries. When even this does not suffice then Washington pressurizes the Federal Reserve to print more money. The result is inevitable – there is inflation and the value of the dollar tumbles. Immediately prices of essentials like fuel and food shoot up. The incomes of the house owners however are stagnant; more often than not it falls. The ordinary citizen cannot keep pace with 10% inflation when the payment towards mortgage goes up by 15% due to the floating interest. Foreclosures are waiting at the end of each month.

Another jumbo reason for the foreclosure debacle is a foolish foreign policy. The whole reasoning is ridiculous – the country borrows $2 billion per day from China to boost dictatorship in Pakistan with $12 billion and spending $1 trillion for Iraqi war. Since such huge amounts do not exist again the Federal Reserve resorts to printing money. It is little wonder then that the oil producing giants want more dollars.

Finally the blame goes to the schooling system that churns out more robots than thinkers. This generation hardly reads more than one book per year! How can they manage foreclosure paper work even with the help of an attorney?

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]]> http://www.foreclosure1.com/blog/foreclosure-crisis/commonly-given-reasons-foreclosure-crisis/feed Foreclosures Yet To Run Out Of Steam http://www.foreclosure1.com/blog/foreclosure/foreclosures-yet-run-out-steam http://www.foreclosure1.com/blog/foreclosure/foreclosures-yet-run-out-steam#comments Thu, 08 May 2008 07:03:53 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/foreclosures-yet-to-run-out-of-steam Despite countless relief measures taken at all levels – local, state and federal, the real estate market continues to go down. RealtyTrac of Irvine, California, said that the Stockton metropolitan region or San Joaquin County, has kept on to its hold as the first ranker in the dubious foreclosure race in the country. The first quarter showed 7,560 foreclosure postings – a triple increase from the first quarter of the previous year, 2007.

RealtyTrac is meticulous in its method of collection of data and sifts through each note that passes through the foreclosure process. It includes default notices – this being the first thing that the borrower receives when they lag behind monthly mortgage payments, notices for auction and bank repossessions. Foreclosure auction notices have to be published in newspapers. Banks repossess the properties at the final stage of the foreclosure process.

DataQuick of La Jolla also details foreclosure figures. According to DataQuick there were 2,500 bank repossession during the first three months of the current year. This shows a five-fold increase from 2007.

From information gathered it seems that foreclosures are yet to run out of steam. There are still miles to go. This should not take by surprise those who have been analyzing the trend. The average price of houses in Stockton increased from $100,000 in 2000 to $400,000 towards the end of 2005. In the background of this zooming and booming was frenetic activity by speculators egged on by the easy loans available from sub-prime mortgages. These required borrowers for the time being to pay only the interest. In many cases, down payment clause was waived. This meant in reality that anybody with a pulse could get a loan! The prices of houses were falsely increased to facilitate sanction of generous funds. Too many people walked into houses they could ill afford. The gamble was that if real estate market continued to rise then the house could be sold off with a profit. But the ‘if’ never turned into a reality.

However every cloud has a silver lining. Each month of the current year the number of house sales has been picking up. Unfortunately more foreclosed units are coming into the market upsetting the ratio. The market continues to be glutted with unsold units – not a good harbinger for the future. How many months or years this will continue remains a big question mark.

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]]> http://www.foreclosure1.com/blog/foreclosure/foreclosures-yet-run-out-steam/feed Court Foreclosure Scenario http://www.foreclosure1.com/blog/foreclosure/court-foreclosure-scenario http://www.foreclosure1.com/blog/foreclosure/court-foreclosure-scenario#comments Thu, 08 May 2008 06:11:05 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/court-foreclosure-scenario The court foreclosure scenario is getting more and more interesting as foreclosure numbers pile up. There are the regulars who show up on the first Tuesday of every month in courts in metro Atlanta.

One of them is Trent Gaines who is a closing attorney by profession but on these days he doubles up as a clever investor who has not come to the court without doing his homework meticulously. He spends his spare time carousing through localities, checking on property titles and then seeing to the court biddings. Gaines advises that the whole exercise of arriving at the court and starting to bid to buy a house is not child’s play. However he adds that with interest rates being the lowest since decades this is a good opportunity to snap up a deal. His words are for those who want to buy in this falling market and not for those who are selling.

Most of those attending the auctions are professionals albeit unofficially. One is a twinkling old lady who looks like a kind grandmother. But she knows all the ropes and accordingly guides her representative to bid for the houses that are worth it. She knows the entire foreclosure auction lingo, which other new comers will not understand.

Experts hide their findings from another like school children during a class test. They whisper with their associates in code language, form groups and huddle in corners while running around from one attorney to another. The goal is the same – trying to find the best foreclosed house.

The court auctions tend to be noisy, loud and full of stress. Some attorneys standing on court steps seem to be shouting to no one in particular. Others read off loudly from brochures while readying themselves to shout each other down when the bidding starts. To a casual visitor the scene does not seem to make sense. Soon one learns to understand that the best units are bid later in the day, marked areas are in the hands of particular law firms and the genuine potential investors hang around looking like idle onlookers.

There is a paranoid hush-hush all around. One will not tell the zip code of the property that interests him; another will keep the property she is bidding on a secret. The highest bidder will have to produce something around $150,000 in ten minutes. In the melee it is difficult to believe that the house being dragged around was somebody’s home with hearth fires burning.

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]]> http://www.foreclosure1.com/blog/foreclosure/court-foreclosure-scenario/feed Federal Reserves Yet Another Move To Tackle Foreclosures http://www.foreclosure1.com/blog/foreclosures/federal-reserves-yet-another-move-tackle-foreclosures http://www.foreclosure1.com/blog/foreclosures/federal-reserves-yet-another-move-tackle-foreclosures#comments Wed, 07 May 2008 04:52:36 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosures/federal-reserves-yet-another-move-tackle-foreclosures The Federal Reserves took yet another move to tackle foreclosures. The chairperson of the Federal Reserves, Ben Bernanke gave his assent to the lowering of the benchmark federal funds rate to 2%. It was a quarter percentage drop. At the start of the 2008 it was 4.25%. Dallas Fed president Richard Fisher, and Philadelphia Fed president Charles Plosser disagreed. They did not want the cut in rates.

In a statement the Fed press stated that “the substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity.” It also emphasized its concern for inflationary pressures rather than more weakening. This was an indication the rates will not be further tampered with but allowed to remain steady in the forthcoming months.

The chief economist of Societe General in New York cynically commented that the statement was a “soft non-binding pause.” Another economist, James Glassman from J.P. Morgan Chase said that it was not required of the Federal Reserve to make comments about its future course of action. Investors in general were expecting this rate cut. As a result the stocks soared.

It is necessary to bear in mind that the Federal Reserve has slowed down in the pace of cutting rates. The last time it did so was a three quarter percent cut on 18th March. Since September 2007 this is the 7th rate cut. During this period the central bank has lowered lending rates by 3.25%. It decided not to pause to so as to give the economy a boom and to provide coverage against risk. The fear of the credit crunch triggering off a downward growth haunted their actions. The economy as a whole is somehow avoiding recession by using stepping-stones. The commerce department reported that the growth was at a pale 0.6% during the second quarter. But financial experts feel that this cannot go on indefinitely and recession is bound to take over. Henry Paulson, treasury secretary feels the fiscal stimulus measures will act as life belt and bail out the economy.

The money released by the government will give a boost to consumer spending but it will make it difficult to get at the roots of the problem. Labour markets are falling, while gas prices are rising. Good exports are keeping things somehow running.

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]]> http://www.foreclosure1.com/blog/foreclosures/federal-reserves-yet-another-move-tackle-foreclosures/feed St. Louis Foreclosures Higher Than National Average http://www.foreclosure1.com/blog/foreclosure/st-louis-foreclosures-higher-than-national-average http://www.foreclosure1.com/blog/foreclosure/st-louis-foreclosures-higher-than-national-average#comments Tue, 06 May 2008 06:23:56 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/st-louis-foreclosures-higher-than-national-average Missouri State has a high rate of unemployment – 5.3% in February, making it the 9th lowest in the national ratings. Without jobs and pressed down by rising interest rates the people are unable to cope with mortgage commitments. The net result is the onward march of foreclosures.

The upward trend of foreclosures in St. Louis city and County in the state of Missouri is causing concern. St. Louis city lies to the River Mississippi while the county of St. Louis surrounds it on the other three sides. From an industrial and manufacturing centre St. Louis won fame for its focus on medicine and biotechnological researches. With the advancement of cities and urban culture many ancient Indian burial mounds were flattened in this city that has otherwise been known as the Mound City.

According to details released by RealtyTrac, St. Louis foreclosure numbers were higher than the national average – albeit slight. During the first quarter of the current year the number of foreclosures across the country rose to 649,917. There was one foreclosure filing per 194 houses in the nation. It was a 23% jump from the first quarter of 2007.

In St. Louis there were 6,625 foreclosure postings during the first quarter of 2008. This meant that out of every 185 houses, one was in foreclosure. This calculates to a jump of 14.5% jump from the last quarter of 2007 and a rise of 79.5% from the first quarter of the previous year – 2007.

During the first quarter, Missouri ranked 20th in the national ratings. There were one out of 297 houses in foreclosure. Missouri registered 8,843 foreclosures during this first quarter – a spike of 46.5% from what it was during the first quarter of 2007.

Illinois ranked 14th in the national survey with one marked with foreclosure out of every 224 houses. This was a rise of 53.5% from the first quarter of 2007.

In the first quarter this year the highest foreclosure postings were in Nevada with one out of 54 houses being served a foreclosure notice. The second rank went to California with one out of 78 houses being in foreclosure. Arizona ranked third with one out of 95 houses in the foreclosure zone.

Foreclosures are affecting all – local, state and federal governments as well as the communities. Desperate measures are being taken to mitigate the crisis but as yet the concentration of foreclosures in St. Louis City, St. Louis County and Kansas City continues unabated.

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]]> http://www.foreclosure1.com/blog/foreclosure/st-louis-foreclosures-higher-than-national-average/feed Pets Deserted When Owners Evicted http://www.foreclosure1.com/blog/foreclosure/pets-deserted-when-owners-evicted http://www.foreclosure1.com/blog/foreclosure/pets-deserted-when-owners-evicted#comments Tue, 06 May 2008 05:45:55 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/pets-deserted-when-owners-evicted The increasing number of foreclosures is responsible for creating a new phrase in the animal welfare dictionary- “foreclosure pets”. It is becoming increasingly difficult for humane agencies to find a solution as realtors find pets deserted when owners are evicted.

This pet problem has become more rampant and most of the times, the owners don’t even bother to make any arrangements for their pets, said Melanie Rushe, a public relations director for the Houston Humane Society. She added that often they would just find a bag of dog food. The owners just leave their pets with a prayer. This is a very disturbing situation. For example, a boxer was found chained to a tree in the backyard adjacent to some garbage. Also, a yellow Labrador was found tied to a water faucet.

The people who arrive first at the foreclosed scene (junk haulers, neighbours, bank inspectors etc) have no right to do anything to the animals. It is a disturbing situation because some owners just leave saying they would come the following day to collect their pets. It’s as though if a crying baby was locked in a car, breaking into the car could save it. The Humane Society appointed two constables to handle such situations. Generally, the constables are called in to take the animals. But it takes some time before they can do so since they have other cases to attend to.

Timmers said that foreclosures are the latest reasons behind deserted pets. They’re just found chained up or loose in the house. Even though people have financial problems it does not mean they can just leave their pets around. There are no exact figures as to how many abandoned animals are found. But Timmers estimates that there were atleast 1000 foreclosure cases in the previous year.

It’s very difficult to bring up cases against animal cruelty because it’s not possible to prove that the animals were left behind with a spiteful feeling. However, when Timmers found dead animals in foreclosed homes, he filed a case against each of the owners. It’s very sad when one walks in to find the dead animals. The owners often try to offer an explanation but there could possibly be no justification for it.

Most of the animals are in ill health. They are rehabilitated and put up for adoption. The owners are totally responsible. They should just drop their pets off when they’re shifting house.

]]> http://www.foreclosure1.com/blog/foreclosure/pets-deserted-when-owners-evicted/feed HUD Has A Word Of Advice For Those At Risk From Foreclosures http://www.foreclosure1.com/blog/foreclosure/hud-has-word-advice-those-risk-from-foreclosures http://www.foreclosure1.com/blog/foreclosure/hud-has-word-advice-those-risk-from-foreclosures#comments Mon, 05 May 2008 16:35:22 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/hud-has-a-word-of-advice-for-those-at-risk-from-foreclosures The foreclosure clouds are getting darker and darker. During the first quarter of 2008 borrowers received 113,676 default notices from lenders. This is just the green signal to foreclosures. It is an abrupt jump by 140% from the previous year during the same period.

RealtyTrac details online that as regards percentage count last month California ranks after Nevada in the national foreclosure race. Close on its trail are Florida, Arizona and Colorado.

Ventura County is not spared. There are ugly foreclosure dots all over the region. Lending house sent 2,176 default notices to house owners in Ventura during the first quarter of this year. Last year during the same quarter the number was 965. This calculates to a 125.5% rise.

The figures standing on their own are worrying. But what is more agonizing is that these are not just impersonal numbers and charts. Behind each unit is the story of individual families and homes. It makes the situation horrendous and alarming. A house is a home. Its loss is something that cannot be easily compensated either materially or emotionally.

Foreclosures have set on a chain reaction. Consumer spending has lessened, credit has been squeezed and banks are under seize. To top it all, real estate prices are tumbling and this in turn runs dry the government revenues and taxes. The flow of lifeblood to the local, state and federal governments are beginning to falter. There is hiccupping everywhere.

Lawmakers, communities and lenders are scrambling for solutions but as yet no noteworthy impact is being felt. Efforts to help the borrowers is being heckled by interests of the lending lobby, partisan petty politics and severe criticism for anything that smells of a bailout for speculators and greedy borrowers. Thus it seems that the figures of the first quarter in all likelihood will increase as the year advances. Many risky ARM’s had been contracted during 2005-06. These are going increase and more houses will fall into the foreclosure net.

HUD has a word of advice for those who are at risk. Do not ignore default notices but immediately contact the lender. Secondly one should be educated about mortgage matters including rights of borrowers. The person to contact is a HUD approved counselor and not any outsider touting help.

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]]> http://www.foreclosure1.com/blog/foreclosure/hud-has-word-advice-those-risk-from-foreclosures/feed Foreclosures Governor Villaraigosa And Nero http://www.foreclosure1.com/blog/foreclosure/foreclosures-governor-villaraigosa-nero http://www.foreclosure1.com/blog/foreclosure/foreclosures-governor-villaraigosa-nero#comments Mon, 05 May 2008 15:46:46 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/foreclosures-governor-villaraigosa-and-nero It may seem too far-fetched to bracket foreclosures, Los Angeles Governor Villaraigosa and Roman Emperor Nero in one bracket but in reality the parallel is not hard to find. Nero played the lyre while he burnt Rome.Villaraigosa presided over housing boom and zoom of downtown Los Angeles that has finally led to the ravages of the fire of foreclosures tearing down the city.

Foreclosures in Los Angeles are not the only cause for the economic downturn. In fact it may be argued that foreclosures resulted not only from the sub-prime mortgage fiasco but also because of thousands losing jobs in units connected with aerospace, manufacturing and business services. All the affected belonged to the middle class. Villaraigosa just watched and fiddled. For a year from February 2007 to February 2008, the county suffered the highest percentage of job loss amongst all the metropolitan regions in US. This is according to a current report released the Bureau of Labour Statistics of US.Los Angeles vies with Detroit for dubitable first position as the worst hit city in regard to unemployment and foreclosures.

There have been similar dark clouds hanging over other regions of Southern California but Villaraigosa exclusively focused on the speculative activities in the real estate market leading to the housing bubble. And the bursting of the bubble is largely held for the foreclosure crisis. He did not think about the long-term growth of the city. The short term thrust seems to have led to long-term foreclosure fires.

With the property values and employment related to construction and real estate having nose-dived there is nothing left but tourism to keep the city and county running. Today Villaraigosa is hunting for funds to balance the budget of the city. It seems the hunting will have to go on for some time as the foreclosure clouds are far from clearing.

Unemployment in the real estate sector is not something water tight – it spills over to other categories creating a snowballing negative effect on the entire employment scenario. Starting from 2006 employment figures in Los Angeles has dropped by 2% in various sectors including the all important entertainment industry. According to an April report, business expansion fell by 22.5% in the county. Villaraigosa did not have the foresight to see that dependence only on real estate boom revenues could spell disaster. Today he admits that he been cautious he would not have given the green signal for large hikes for city workers. The Governor is now swallowing the bitter pill of foreclosures.

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]]> http://www.foreclosure1.com/blog/foreclosure/foreclosures-governor-villaraigosa-nero/feed Virtual Foreclosure Bus Tours http://www.foreclosure1.com/blog/foreclosure/virtual-foreclosure-bus-tours http://www.foreclosure1.com/blog/foreclosure/virtual-foreclosure-bus-tours#comments Thu, 01 May 2008 16:48:55 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/virtual-foreclosure-bus-tours Foreclosures are sweeping across the country – the worst in the last 16 years. Realtors are not taking the slump in the property market without a show of fight. With the prices of property at an all time low they have hit upon a novel plan – running foreclosure bus tours to lure in potential buyers. Thus real estate service companies are using this very debacle as a tool to reap in gains.

A step ahead of the vehicle tour rumbling across the region is another easier method to draw the attention of the purchasers – a virtual foreclosure bus tour. A search tool has been launched by HouseRebate.com that shows up all the REO houses in the Multiple Listing at San Diego city. These units have passed on from the hands of the borrower after foreclosure to the lenders. Without moving from the comfort and privacy of the home, those interested can hop on to the virtual foreclosure bus tour by clicking on www.houserebate.com/bus. The company claims that this tool enables those who want to invest or buy residential houses, to view all the available units without rushing around from site to site.

In California during the first quarter of 2008 lenders had issued 113,676 default notices to borrowers. This is a 39.4% increase from the previous year, according to information released by DataQuick. The latter firm has been detailing such information since 1992.

The average price of houses in San Diego County fell below $400,000 in March 2008– the lowest since November 2003. This was mainly because of the huge discounts being offered by banks who are weighed down by innumerable foreclosed units. It was a tumble down by 4.8% from February and 19.4% fall from March 2007. The number of sales is abysmally low – contradicting the comments of realtors that many buyers are snapping up deals. In March this year there 2,108 units were sold – a fall of 34.5% from March of 2007 and the lowest March figures since 1988, the year from which DataQuick has started detailing San Diego figures. The March sale figures were better than February but this is typical of this season. It is nothing compared to the usual rise recorded in previous years. Both condos and resale houses saw year-by-year drops but that of newly built ones saw a rise of 7.1%. Of all the properties sold in south California, 38% were related to foreclosures. Only a year ago it was 8%.

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]]> http://www.foreclosure1.com/blog/foreclosure/virtual-foreclosure-bus-tours/feed Foreclosure Mitigation Plans Gaining Prominence http://www.foreclosure1.com/blog/foreclosure/foreclosure-mitigation-plans-gaining-prominence http://www.foreclosure1.com/blog/foreclosure/foreclosure-mitigation-plans-gaining-prominence#comments Thu, 01 May 2008 16:24:58 +0000 Susan Pedersen http://www.foreclosure1.com/blog/foreclosure/foreclosure-mitigation-plans-gaining-prominence As foreclosures gallop across the country more foreclosure mitigation plans are in the offing and gaining prominence. On Wednesday 23rd a House panel agreed to the sanctioning of $15 billion as loans and grants for the local governments for purchase of foreclosed houses. The House Financial Services Committee voted 38 for and 26 against this bill. It is a part of a more general package of legal measures related to housing that the Democrats are trying to push through in an answer to Housing problems lashing the country. Earlier the panel decided for legal protection in certain cases of mortgage services when they work with foreclosed borrowers. Till now many servicers said that they only collected the mortgage on behalf of the original owners and had no right to negotiate on their own; if they did so there was the possibility that lenders would sue them. It was against this background that the vote was pushed through.

Many of the Republicans in the panel opposed the move saying that the use of federal funds to purchase foreclosed houses would defeat the very purpose it aims at by encouraging more of the same. It is like giving incentives to foreclosures opined Rep. Spencer Bachus.

The chairperson of the committee Barney Frank (D.Mass) reiterated that there were other provisions in the bill. The house must be at least 60 days through the foreclosure steps. This would check misuse. He stressed that the most important thing is that the local governments trying to battle foreclosures must be given more support. Cities are badly bruised and this is the only way help can be extended to the metros and counties.

There would be equal division of the $15 billion into loans and grants. It would be disbursed according to the localized intensity of foreclosures calculated in percentage. Also would be taken into consideration the average housing price amongst other sundry factors The money would be given to government run and non-profit bodies. It would be spent for buying, repairing and reselling or renting out foreclosed properties. Approximately half of the grant money amounting to $3.75 billion would go to help low-income borrowers victimized by foreclosures. This group comprises 50% of the sufferers.

Republicans are critical about these measures saying that it would encourage more foreclosures and add to federal deficits. The ultimate beneficiaries of the bill seem to be the lenders.

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