Bank Gives Cities, States First Shot at REOs Bank of America is making it easier for states and cities to buy foreclosures before investors purchase them.
The program is a result of the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program, which aims to encourage redevelopment of neighborhoods hit hardest by foreclosure and the resale of properties to home owners.
Bank of America will notify participating cities that properties are available before they are listed on multiple listing services. The company will set the prices with no haggling allowed.
Bloomberg is reporting that Washington may change the terms somewhat. Presently a first mortgage has to be no more than 105% of the market value of the home to qualify for a modification. Now the loans being modified may be as high 125% of the home’s value and still qualify for a lower interest rate.
According to RealtyTrac.com, Foreclosure Filings in Utah are getting up there with states like Arizona, California, and Florida. During May, Utah Ranked 5th Nationally for foreclosure filings. Up 115% from May of 2008. One out of every 316 homes received some sort of foreclosure notice.
Foreclosures are unlikely to peak until 2011, says the chief economist of the National Association of Home Builders.">Foreclosures Won't End Soon, Analysts Predict Rising unemployment and falling home prices is a treacherous combination that is dragging people with excellent credit into the foreclosure morass.
The jobless rate of 4.4 percent in April of people with bachelor’s degrees isn’t high compared with the overall unemployment rate, but it is more than double what it was a year ago.
Foreclosures are unlikely to peak until 2011, says David Crowe, chief economist of the National Association of Home Builders. He says foreclosures typically hit a high after unemployment does, and he believes the employment situation won’t turn around until late this year. Then rising employment will drive up interest rates, he fears, causing more resets of adjustable rate mortgages, leading to more foreclosures.
Credit Suisse echoes Crowe’s concerns, predicting that scheduled resets will hit a high in 2010 and rates will stay high until 2012.
The leading cause of foreclosures is NEGATIVE EQUITY, and 25% of prime loans have negative equity, 45% of Alt A loans, 50% of subprime loans, and a staggering 73% of Option Arm Loans. High rates of foreclosure look like they will continue for quite some time.
So much has been made of the subprime mortgage meltdown that you would think it was almost totally responsible for the economic collapse, and that once the subprime problem was fixed then the worst would be over.
Unfortunately nothing could be further from the truth, despite hitting new highs in foreclosure listing. Instead it was the first round of a three part collapse, and we are on the edge of the second round.
The Number of Foreclosures nationwide are astounding. What a mess.
As of this week, 1 million new foreclosures have been filed in 2009, according to estimates by the Center for Responsible Lending, a nonprofit research and policy organization dedicated to preserving home ownership.
A new foreclosure starts every 13 seconds – nearly 6,500 a day.
The nationwide boom in foreclosures and bank-owned real estate (REO) property sales to investors is producing an unpleasant and sometimes dangerous side effect: Growing numbers of confrontations occur when investors visiting supposedly empty properties find them occupied -- and the inhabitants don't want to leave or let anybody in.
Scam artists are now tracking houses entering the foreclosure pipeline every day, and then renting those houses out as they become vacant -- totally illegally.
They get hold of notices of default - or other publicly available reports of pending foreclosure actions -- and then rent out the empty houses to tenants at bargain all-cash rents.
When investors or REO management agents later visit the property and find it occupied, the scammed "tenants" may feel threatened and respond with hostility to efforts to enter the house, according to Dagnesses.