Thursday, December 4, 2008

Bernanke thinks more action needed to cut foreclosures

If there isn't more action done. Foreclosures will continue to worsen the economy according to Ben Bernake.

Tuesday, November 11, 2008

New Government Program to Reduce Foreclosures

The federal government is unveiling a new plan that is aimed to help distressed borrowers with government backed Fannie Mae and Freddy Mac home loans.This plan will be eligible to borrowers who are at least three months behind on their mortgage payments. Interest rates and loan terms will be adjusted to affordable levels for borrowers with atleast 10% equity in their homes.

read more | digg story

Sunday, October 19, 2008

Why are we seeing so many foreclosures?

This video is definitely propaganda based, but overall it gives a good summary of why there are so many foreclosures today, and why home prices are dropping all over the nation.

Wednesday, August 6, 2008

Will the Housing and Recovery Act reduce foreclosures?

In the Housing and Recovery Act of 2008, FHA home loans are supposed to be easier for people with sub prime and adjustable rate loans to get. This bill is supposed to potentially help up to 400,000 US citizens.

One of the reasons many people are foreclosing is because their mortgage payments have substantially gone up. But it seems to me that in most cases the homes they were in was never really affordable. These FHA loans aren't going to be given to everyone, and I question how much this act will really help homeowners in danger of foreclosure.

Saturday, July 26, 2008

US Foreclosures Still on the Rise

RealtyTrac

According to Realty Tracs Results of 2008 2nd Quarter foreclosure filings, Foreclosures are up by 14% in the US. Nationally, 1 out of every 176 households received a foreclosure filing during the second quarter.

Foreclosures in California, Nevada, Arizona, and Florida continue to dominate the nationwide foreclosures. In Nevada, one out of every 43 homes received a foreclosure. In Las Vegas the number is even higher at 1 out of every 35 homes. In California the number is one out of every 65 households, in Arizona it's 1 out of every 70, and in Florida 1 out of every 78 homes received a foreclosure notice in the last three months. Because these states have such large populations (especially California and Florida) and so many foreclosures, only 9 states actually have more foreclosures than the national average. Even Areas Like Chicago Illinois where the real estate market seemed immuned from housing problems have seen foreclosures rise.

For more information visit the full report at Realty Trac.

Thursday, July 10, 2008

Utah Foreclosures up 141%

Yes, now that housing prices are declining and its tough to sell real estate in Utah, foreclosures are up. The last few years Utah has been best in the nation in not having foreclosures, but during that time real estate was golden. Now the market is declining and irresponsible borrowers can't get away from it. With the huge surplus of high end homes, and very few buyers looking for mega mansions, expect the foreclosure numbers in Utah to rise.

read more | digg story

Wednesday, June 25, 2008

Should Government Bail Out Foreclosures?

The senate is pretty close to passing a $300 billion bailout for homeowners in foreclosure. In essence, this bill would use FHA, HUD money to back up "bad" loans that will result in foreclosure. In essence, every American Tax Payer gets to help Counrywide, and other lenders who loaned to risky borrowers cut their losses.

read more | digg story

Saturday, June 7, 2008

Nearly 1 in 10 homes behind on payments.

Nearly 1 in 10 US homes are behind on atleast one payment. These foreclosure starts are especially high among the sub-prime and ARM loans.

Monday, May 19, 2008

Bush Doesn't Want to Bail Out Lenders

Bush has threatened to veto a House-passed Democratic measure aimed at preventing foreclosures. It would have the government step in to insure up to $300 billion in new mortgages for distressed homeowners; Bush says it would "reward speculators and lenders."

read more | digg story

Friday, May 9, 2008

Who is looking to buy foreclosures?

A recent survey by Trulia helped determine a little more about who is more willing to buy, or at least look at foreclosures.

  • About 60 percent of single/never-married adults are more likely to be at least somewhat interested in purchasing a foreclosure. People who are single just tend to have less obligation towards finding a nice house now. They don't have a problem purchasing something that may need to be fixed up. Providing adequate housing for their family is not the number one concern for single people.
  • Younger adults, ages 18 to 34, are the more likely than other age groups to consider buying a foreclosure with 69 percent expressing interest. Many in this demographic area are also single. They're young and looking for a deal.
  • Only 32 percent of adults 55 and older are interested in buying foreclosures. Older people are just not as motivated to try something new.

Monday, May 5, 2008

Bernake Warns More needs to be done to Stop Foreclosures

With foreclosures continuing to rise, Ben Bernake says more needs to be done to prevent foreclosures..High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets and the broader economy," Bernanke said in a dinner speech to Columbia Business School in New York. "Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest," he said.Some 1.5 million U.S. homes entered into the foreclosure process last year, up 53 percent from 2006, Bernanke said. The rate of new foreclosures looks likely to be even higher this year, he said.To provide more relief, Bernanke again called on Congress to give the Federal Housing Administration, which insures mortgages, more flexibility to help distressed borrowers at risk of losing their homes. He also again urged lawmakers to move ahead on legislation revamping Fannie Mae and Freddie Mac, which finance mortgages

read more | digg story

Tuesday, April 22, 2008

Is the mortgage crisis causing divorce?

If financial problems are one of the top reasons for divorce, and the mortgage crisis is causing increased financial problems, it would be logical to assume that the mortgage crisis is causing increased divorces.

Divorces are also one of the top three reasons for foreclosure, so if divorces are up, won't foreclosures also go up, and as foreclosures go up, so will divorces.Sounds like I spiraling problem to me. Here are what the experts at Divorce 360 have to say:
It's just one more point of stress for couples already on the ragged edge.
Experts are positing that the recent rise in divorce is directly related to the
rise in foreclosure, as well as the stress of mortgages that keep going up, up,
up.

read more digg story

Monday, April 21, 2008

1 in 33 US Households are predicted to Foreclose

3% of US homeowners are predicted to experience foreclosure over the next two years. The primary culprit for this massive increase is the large amount of "subprime" loans that were given in 2005 and 2006.

In states that experienced the biggest housing boom, this foreclosure rate is expected to be even more harmful. In Nevada, nearly one in 11 homeowners is expected to go through some stage of the foreclosure process, and in Arizona, 1 out of every 18 households will default in payments and will likely foreclose.

This foreclosure rate will not only effect the homeowners, but will effect the value of homes in neighborhoods with high number of foreclosed homes. It will also make it more difficult for many sellers to sell their home as their will be increased competition of underpriced foreclosure homes.

read more digg story

Monday, April 14, 2008

Get $7,000 in tax credits to buy foreclosures?

With taxes on everybody's mind this time of year, would anybody like an extra $7,000 in tax credits?

This just might be reality next year. A $7,000 tax credit just for buying a foreclosed house.

The "Foreclosure Prevention Act" has already passed with the Senate with an overwhelming decision in favor of the 84-12 vote. Part of this package would give the buyers of foreclosure homes a $7,000 credit to help provide relief to struggling banks who have huge inventories of foreclosed properties.

The program seems a bit too much like a bail out for the banks to me, and likely won't do as well in the House of Representatives and the White House, but if it does, buying foreclosure properties will be all the more appealing...

Wednesday, April 9, 2008

Fannie Mae changes loan guidlines for those with foreclosures on their credit

Fannie Mae, The mother of the secondary mortgage market is making changes to help reduce future foreclosures. Among these changes are larger required down payments for Fannie Mae loans, and more difficult terms for those with past foreclosures to get mortgage loan financing.

New guidelines effective June 1, 2008, require that borrowers are free from any foreclosure for atleast 5 years. After this five year period, the borrower who has perviously foreclosed must have a minimum down payment of ten percent and a minimum FICO credit score of 680. Fannie Mae Borrowers who have not had foreclosures on their credit history, are only required to have a 580 credit score.

Tuesday, March 25, 2008

John McCain Speaks on the Nationwide Foreclosure Problem

Future President John McCain said in his Mar 25th speech from Santa Ana, Ca that it is not the governments responsibility to bail out irresponsible borrowers and lenders. Here is a quick rundown of some of the highlights from his speech:

"Between 2001 and 2006 housing prices rose by 15% every year. The normal market forces of buying and selling homes was overwhelmed by market speculation. Our system of market checks and balances didn't correct this until the bubble burst."

"Rising home prices made many home lenders complacent giving them a false sense of security and lowered their lending standards.... Lenders ended up violating the fundamental rules of lending by loaning money people couldn't pay back.
"
"There are 80 million home owners in America that are facing the reality that the bubble has burst. Of these 80 million homeowners only 55 million have a mortgage at all... 51 million are doing what they need to make their payments... Only 4 million homeowners are causing these problems that are effecting us all...."

"Capital markets work best when there is both accountability and transparency. In our current crisis, both were lacking. This has caused a crisis of confidence in markets. Market players are increasingly unnerved by the level of risk, liability, and lost in the financial market. ... Credit is drying up, and liquidity is severely limited. Many business are unable to get their usual loans."

"The problem with subprime loans has no convulsed the entire financial system."

"Jon McCain pledged that he is not going to "Play politics with the housing crisis, I will evaluate everything in terms if it might be harmful or helpful to deal with our crisis we face now.... It's not the duty of government to bail out and reward those who act responsibly"

He said that government assistance should only be for primary residences, and any assistance should only be temporary. Government assistance should only be to insure that problems like these never happen again.

Policy should move towards ensuring that homeowners provide a responsible down payment of equity at the initial purpose of a home. He opposes reducing down payment requirements for FHA mortgages, and thinks that they should actually be raised.

Friday, March 21, 2008

Increased Foreclosures are causing Mortgage Insurance providers to cut back

Mortgage Insurance was designed to back up risky home loans where the borrower couldn't put up a 20% down payment. Now with home prices naturally declining in many markets, many Mortgage Insurance providers won't give mortgage insurance on Investment Properties, Second Homes, and Primary residences seeking 100% financing.

Here is a list of markets AIG defines as "declining" where Mortgae Insurance standards have increased. AIG Declining Market Report

If the Private Mortgage Insurance companies won't insure these areas, it looks like they are confident prices will continue to decline and foreclosures will continue to remain high in these areas.

Thursday, March 20, 2008

Short Sales - Good for you or the bank?

"Short Sales" seems to be the latest buzz word in the Foreclosure World.

People are always looking for Short Sales as if they are some kind of automatic deal; As if a short sale is a quick fix to foreclosure real estate wealth. The fact is, short sales are very complicated, they aren't always deals, and they very often don't even happen.

What is a Short Sale?

A Short Sale is a real estate transaction where the lender accepts less than full payment when the property is sold. The lender gets "shorted" on the total amount due. It's definitely not a good deal for lenders as they lose money on short sale transactions. The new buyer of the property may be getting a deal because they are most likely getting the house for less than the previous buyer payed for it. In declining markets like Arizona, Florida and California, Short Sales are often necessary just to sell a property at market value. These short sale purchases aren't really deals at all.

How do you buy Short Sales?

Many short sales are listed. The borrowers in default realize that they need to sell their house to prevent foreclosure and further damage to their credit. These properties can be found on MLS Sites. For more ambitious buyers looking for short sales, these properties can be purchased by contacting the distressed borrower directly. Most people in default who know they owe more than the house is work don't think they have an option. They believe that the only thing they can do is let the property foreclose. Distressed properties that aren't listed can be found on sites like the Bargain Network Homes.

Once short sales are found, the price has to be negotiated by both the owner and the lien holders. Written real estate purchase contracts must still be signed by the seller and submitted to the lender. These offers now have to be approved by the bank. In order for banks to accept short sale requests, they want evidence that the borrower has a legitimate hardship that prevents them from making payments. They will ask for a financial hardship letter, bank statements, tax returns, etc. They need to qualify people for Short Sales. Many banks won't accept short sales unless the borrower has already missed several payments and has received a "notice of default." Most ordinary borrowers that are over their heads don't match this criteria. Many borrowers have multiple loans tied to the property. For a primary lien holder to negotiate a short sale, the junior liens must first agree to "short" their loans. If these negotiations can't be made, the deal falls through.

Why do banks allow short sales?

Banks allow short sales because losing some money, but collecting the bulk of the loan balance is less damaging that allowing the property to go do the foreclosure auction. In this regard, purchasing a house in short sale status is an advantage for the bank.

Buying homes in short sale status can be very beneficial, but it also can be very challenging. It is not something to attempt unless you are serious about real estate investing, and is not something you want to do without the help of real estate professionals.

Monday, March 10, 2008

HomeSaver Advance Program for Delinquent Mortgages

A new foreclosure prevention solution was announced where Fannie Mae borrowers can get a small personal loan to try and bring their defaulted mortgage current. This loan is a at a low 5% interest rate, and is set at a 15 year fixed term. The borrower doesn't have to make any payments for the first six months, and the loan is paid directly to the defaulted lender.This program provides up to $15,000 to cover the past due balances for up to six months of delinquent payments plus HOA fees, missed taxes, and short escrow balances. This loan could be very valuable to help prevent foreclosure for borrowers who had temporary short term financial difficulties. For most default borrowers, it would just add an additional payment, to debts they already can't afford.

read more | digg story

Friday, March 7, 2008

Home Equity at Lowest Rate in Years: Foreclosures High

Americans have the lowest average equity since the Federal Reserve started keeping track in 1945. The average American now has more debt against their homes than the amount they actually owe. This is an indication that the financial well being of most Americans is not good, as real estate ownership is the #1 source of wealth. It also demonstrates our increased reliance on debt for our "needs" of life. Americans have consistently borrowed against the equity in their homes to purchase luxuries. With home appreciating decreasing, this is greatly reducing wealth, and potential retirement income for many individuals. At the same time the record number of foreclosures doesn't help this stat either as most Foreclosure filers have little or no equity.

read more | digg story

Tuesday, February 26, 2008

Foreclosures up 57%, How can you profit from it?

According to the Statistics provided by RealtyTrac.com, the number of notice of defaults has substantially risen once again. In January of 2007 there were 148,425 default notices given to borrowers. This year there were 233,001 notices given. 

California alone accounted for almost 1/4th of all default filings. It had 57,158 foreclosure notices distributed in January. 

More and more homes aren't being purchased at the foreclosure auctions, and become REO Homes. This  offers great opportunities for savvy investors and ordinary home buyers. A lot of these homes aren't being picked up by investors because they simply don't have any equity, and there is no profit in these foreclosure homes. At foreclosure auctions, the opening bid is usually the amount owed on the primary loan. When this loan amount is more than the property is worth, it won't be purchased on the court house steps. 

How to Profit with Foreclosures without Equity


Short Sales
The best bet for savvy investors is to purchase the properties as Short Sales before the auction even occurs. Banks don't want to foreclose, and are often willing to accept less than the amount owed on the property to avoid foreclosure. Good Real Estate Investors contact owners of these homes when they receive their default notices, before most of these homes are even on the market or have any other competition. Lists of default properties can be found from services like RealtyTrac, Foreclosure.com, and Bargain Homes Network



RealtyTrac


Deals at Foreclosure Auctions - Homes with Second Mortgages
When deals can't be negotiated with the distressed borrowers and the banks in preforeclosure, many houses can also be purchased at great discounts at the foreclosure auction. The best properties to try and buy at foreclosure auctions are those with second, junior liens. Over the past few years a popular trend for lenders was to offer 100% financing by using 80-20 loans. in an 80/20, the primary loan was for 80% of the homes value and the second loan was for 20% of the purchase price. At the foreclosure auction, the second loan will be eliminated, lost, shafted. These properties can usually be picked up for a little more than the value of the first loan, which at one time was 80% of the properties value.

REO Homes
Bank Owned/REO Homes can rarely be purchased for huge discounts, but are much more easy to purchase than short sales and foreclosure auction homes. REO properties are listed just like any other properties. They are usually priced below market value because banks want to get rid of them quickly, and they usually need some repairs. These properties are found on the MLS, and you get the aid of a Realtor to help you in your purchase of REO Homes. This is usually the only way to purchase foreclosures as first time home buyers.

Find REO Homes on the MLS Now:


Buy or Sell your home with ZipRealty, and save $$$

Friday, February 15, 2008

Top 20 Metro's for Foreclosures.

4% of homes in these metros are in some stage of the Foreclosure Process. The highest foreclosure rates are in metros where homes appreciated too fast, like California, Las Vegas, and Florida, or areas where economic market conditions really struggle like Detroit and Cleveland Ohio.

read more | digg story

Tuesday, February 12, 2008

"Project Lifeline" Lenders New Plan to Reduce Foreclosures

The US Treasury department announced a plan known as "Project Lifeline" designed to help give distressed homeowners more time to work out payment plans and prevent foreclosure. Bank of America, Citigroup, Countrywide Financial, JPMorgan Chase, Washington Mutual and Wells Fargo have agreed to allow delinquent homeowners facing foreclosure a 30 day period to work out new payment terms. During this period, the banks will attempt to contact the distressed borrowers, and will "freeze" the foreclosure process while they attempt to find a repayment solution.  Borrowers with both fixed and option arm loans for primary residences may qualify for Project Lifeline. 

Many economic experts are  skeptical that Project Lifeline will actually make much of a difference. Distressed homeowners are only eligible for this program after they've missed three mortgage payments. This is the time that most lenders issue the Notice of Default.

read more | digg story

Tuesday, January 29, 2008

ARMS aren't always the Cause of Foreclosure.

The media likes to blame the national foreclosure crisis on Adjustable Rate Mortgages (ARMS). The states that had the highest number of ARMS, Arizona, Nevada, California, Colorado, and Florida do lead the nation in foreclosures, but not all Foreclosures are because adjustable rate mortgages have reset and gone up. Foreclosures happen primarily because people bought houses they couldn't afford, and didn't have any savings for a rainy day. They banked on the trend that the real estate would continue to appreciate at double digit amounts every year. Well, that didn't exactly happen.

read more | digg story

Friday, January 25, 2008

What's a pre-foreclosure home? What's a Foreclosed Home?

With foreclosures on the rise. Many want to find ways to profit by buying foreclosure homes. If you want to get a deal, you must understand the different types of foreclosures and the likely places you can purchase a house for less than market value.Foreclosures are common place in our world today. With the mortgage crisis of 2007, and declining home prices where many people bought homes they couldn't afford based on speculation that the value would increase so much it would be a great investment. There are also loads of get rich quick foreclosure schemes. These don't work. Foreclosure homes can be purchased, and at a discount, but you likely won't get them for pennies on the dollar or even half off. To know how to get deals on foreclosure properties you need to understand the different types of foreclosure properties: Pre-foreclosures, Foreclosure Auctions, and Foreclosed Homes.

read more | digg story

Tuesday, January 22, 2008

Fed makes emergency rate cut

Inman news on Fed cut. This rate cut has already helped reduce fixed rate mortgages. Thirty year fixed mortgages were hovering around the 5.5% rate today. This cut will also serve as relief too borrowers with option arms and adjustable rate mortgages as the rates on those mortgages will be lower. It is a great time to refinance adjustable rate mortgages to fixed rates while these interest rates are the lowest they've been in two and a half years.

read more | digg story

Monday, January 14, 2008

Best Websites to Find Foreclosure Properties in Utah

According to Realty Trac, There are 7,249 foreclosure properties in Utah and Foreclosure Filings are going up. It ranked 20th nationally in foreclosures despite the best housing appreciation in the nation. Here are the best Utah websites to find Pre-foreclosure properties:

How to Spot a Foreclosure Rescue Scam

How to spot a Stop Foreclosure Scam according to the financial Guru David Bach. With increased foreclosures, there is an increased industry in trying to scam people at the moment of their greatest despair. If you are having financial distress, and have missed mortgage payments. You will be contacted by real estate investors and "foreclosure rescue" companies. Be careful, and make sure you won't be a victim of foreclosure repair scam.

read more | digg story

Tips To Avoid Foreclosure

Free information and resources for people who are facing foreclosure, including options and avoiding predatory foreclosure lending scams. If you are faced with foreclosure there are things you can do. You don't have to just sit back and be a victim. This blog gives some good practical advise explaining your options, and tips you can do to avoid foreclosure.

read more | digg story

How to find and buy Foreclosures in Idaho

There are five different stages of the foreclosure process in Idaho that offer different challenges and advantages for real estate investors to purchase foreclosure homes. These include preforeclosure, the notice of default, the trustees sale, REO properties, and HUD Homes. So how do you find these homes for sale and invest in the lucrative foreclosure market?

read more | digg story

Friday, January 11, 2008

Few bargains, many pitfalls at foreclosure auctions

"Buying an auctioned home to resell at a profit is a risky endeavor."

read more | digg story

How Do you Buy HUD Homes?

HUD homes are marketed almost the same way as any other listed property.

In each city, a designated HUD broker is in charge of all HUD home listings. When the HUD home becomes available it is listed on the MLS. There is also additional information about the HUD home on the website of the law firm in charge of the transaction. In most states this site is www.Mcbreo.com

You must purchase a HUD Home with the help of a Real Estate Agent. Any participating broker will work. When you are interested in the house you must fill out a valid real estate purchase contract, write an earnest money check with certified funds, and then make an electronic bid online. If the electronic bid is accepted, then your real estate broker turns in the required earnest money check and paperwork. One interesting thing about online HUD bids is that the real estate agent can choose their commission. HUD cares most about how much money they will net, so the more your agent charges, the more you will likely have to pay for the property.

HUD properties very often have multiple offers. It is not uncommon for HUD to be purchased for more than the listed price. HUD does not have to accept any bids, and won't accept bids if they are extremely low, even if you are the only bidder before the deadline.

What are HUD Homes and How do they differ from REO property?

FHA loans that default, and don't get purchased at the Trustee's auction become HUD Homes. Hud homes are foreclosed properties, temporarily owned by the department of Housing and Urban Development.

They are different than other REO homes in the way they are marketed and sold. HUD homes are not just looking to get rid of their properties, but first off are looking to help provide affordable housing for first time buyers. When a HUD home is first listed, it is only available to buyers looking for a primary residence. For this reason, HUD homes are hard to use as investment properties not designed for primary use.

If the HUD House doesn't sell to someone looking for a primary residence, then the bidding is open for real estate investors. At this point, the property is usually not a deal. If it were, it would have sold during the initial listing period.


The Reality of Investing in Foreclosures...

There is a lot of hype that foreclosures are on the rise. This is reality.

There is also a lot of hype suggesting that investing in foreclosures is get rich quick fix that is easy to do with no money down. There are infomercials and seminars that try and get you to come learn the "secrets" of foreclosure investing with no money down. Really, these free programs just try and get you to subscribe to their incredibly overpriced "training" and "mentoring" programs so you can learn the real details of "real estate investing." They have very little real real estate investing info and a lot of hype up showing how rich you'll be and how easy it is to do. These programs target the people who don't have any money down, because they are looking for the suckers. They are looking for desperate people who will be willing to go into further debt for the mentoring programs in hope they can fulfill their dream.

Investing in foreclosures is not easy, and it is especially hard if you don't have money to put down. The door of opportunity is much bigger if you have sufficient money where you can put cash down and purchase distressed properties in a matter of days. It's not impossible to buy foreclosures with no money down, but these methods can be very risky or on the borderline of unethical/illegal.

There is also a misconception that if a house is a foreclosure, it is a deal. In reality, many foreclosures are overpriced for the amount of work/risk required to purchase them.

To really invest in foreclosures. The first thing you must do is understand the foreclosure process. You must understand: