The foreclosure crisis has been unkind to one group who has had nothing to do with the housing crisis. They are the renters. Despite paying regular rents they have suddenly been asked to move out because the landlord is being foreclosed upon. So far the law has failed to give them any protection. The lease agreement has been with the ex-house owners and the new incumbents are not bound to abide by them. But with an increase in tenants falling victim to foreclosures the matter has been taken up and goods news has trickled in for tenants living in foreclosed houses in Cook County.
The deputies of the sheriff of Cook County have run into bizarre and often dangerous situations while carrying out forcibly eviction orders. They have come up against drug peddlers, rotting animals, barricades and gangs running around in bicycles. This has left many deputies mentally disturbed. Of late they have come across another kind of poignant scene. They are meeting the renters who are learning from them the first time that the house is foreclosed and they will have to move out. But with a change in rules the sheriff’s team will be given new training about stopping the eviction of tenants from foreclosed homes. The chief deputy sheriff of Cook County is keen to see that “people are not taken advantage of”.
On an average the sheriff tackles one hundred evictions daily. Not all of these are connected with foreclosures but a large bulk of them is. From now on when the deputies call on a house where no one is available they will leave a bold sign saying that the occupant will be given seven days grace to come up with proof of tenancy occupation. If it is proved to be so then the eviction will be stalled. Previously if there were no one in the house at the time of calling, the staff would continue with the eviction process. In most cases the tenants are ignorant about the house being in foreclosure. They are enlightened only when the deputies come knocking with the dreaded orders.
Shannon Weiss of Center for Renter’s Rights, Chicago commented that his office receives many calls each day about how tenants are taken by surprise with a foreclosure notice they knew nothing about. He says, “It is worse for the tenants than it is for the owners. The owners made their own mess. The tenants were just helpless victims.”
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Data is flooding in to show that Sacramento continues to be battered by foreclosures as the crisis swirls through an agonizing summer of woes. In Sacramento, El Dorado and Placer the foreclosure rate is 1:145. In July 5,249 houses had been foreclosed upon according to ReatlyTrac. In the country Sacramento has been ranked 11th with the worst foreclosure numbers.
In July, foreclosure numbers increased by 55% across USA in comparison to July 2007. The trend continues without a pause. In the forthcoming months a bunch of sub-prime mortgages will increase its rates and in all probability this will trigger off another flood of foreclosures. Foreclosures combined with a slumping economy are wrecking the lives of many.
Leovardo Lopez, resident of Sacramento is a pool builder. He is one of the many trapped in this foreclosure crisis. He is under great stress with his work hours being slashed. However Lopez is luckier than his co-workers who have been retrenched. Leovardo is afraid that with his scaled down earnings he will not have enough to meet mortgage payments from the next month. To make matters worse, the present value of his house is worth $150,000 less than what he paid for in 2005.
Lopez is 42 years old, married and with two children. He participated in one of the numerous foreclosure workshops being held across Sacramento. This particular one was under the aegis of ACORN – a federally backed non-profit body for helping struggling house owners. The credit ratings of Lopez are good and he is backed by 16 years of blemish free work record with the pool company. Speaking in Spanish he said, “I became a citizen to fulfill the American dream. After all I’ve sacrificed it wouldn’t be fair to walk away from my house.”
Lopez has at least consulted the help agency before foreclosure knocks. Many others are not doing so and courting extra trouble. ACORN will try to talk to Lopez’s lenders to refinance the loan.
Meanwhile good news has come through. Shortly the federal authorities will start on its innovative programme of Hope for Homeowners. $300 billion has been allotted for refinancing mortgages so that they can move out of risky contracts to long-term mortgages with reasonable interest rates. The government is optimistic that 400,000 borrowers facing foreclosures will benefit from this measure.
However there are certain preconditions attached to the benefits and is not for everybody said Ed Corona of NeighborWorks Home Ownership of Sacramento.
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Many pundits opine that a recession is following close on the heels of foreclosure. The very name sends shivers down the spine of the country. This makes many experts shy away from using the dreaded term but commenting that the economy is merely slowing down. There is a strong group disagreeing with this view.
Recession or not it is an undeniable fact that the real estate industry is suffering and will continue to do so. This means potential buyers will find it difficult to get loans to purchase houses. Moreover if they do manage to get a mortgage, considering the mood of the market and economy, it will be a strain to keep up with the regular repayment schedules.
The question is that if recession sets in will foreclosures increase or decrease? Apparently it seems logical to say that foreclosures will worsen. But logic and real estate industry happenings do not go hand in hand. If the financial market worsens then the mortgage providers, to survive and continue with their livelihood, will come to terms with borrowers and negotiate terms of mortgage to more amicable terms. It will be to the interest of the lender to see that the house does not fall into foreclosure but mortgage payments continue – albeit at a lower rate.
This rule will not apply to all. Many will fail to renegotiate and some houses will unavoidably be lost to foreclosures. This is a standard economic model. The main point is that communication lines between borrowers and lenders will open up.
The recession will open up opportunities to investors and first time nest builders to snap up bargains with the increase in number of foreclosures. Thus the issue of difficulty in getting a loan will be skirted. Houses will become affordable thanks to the recession climate. Perhaps an increase in foreclosure numbers is what the economy needs to pep up the financial situation.
Although it may sound contradictory but it is true that the real estate investment market is dependent on foreclosures. Foreclosures actually release properties from the frozen debt situation. Properties are taken out from the freezer and put into the market to make it hot. Slowly sales pick up speed with investors hopping from one unit to another.
With foreclosed properties getting sold the health of the communities also improve. The owners of properties now turn to stores dealing with construction business and interior decorating activities to kick start movement and bustle in the dull market.
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A dose of foreclosure medicine is just the palliative that the sick real estate market needs. It is an open secret that the lending body is buddy-buddy with Wall Street. This lending group is responsible for the foreclosure crisis of today. Till recently the real estate market had been fairly stable and healthy.
Continue reading: Foreclosure Medicine Will Give Relief To The Sick Real Estate Market
Foreclosures are hitting value of properties in Houston. Foreclosures are affecting not only the borrowers being evicted from their homes but also those living in the surroundings not directly connected with the housing crisis.
Continue reading: Foreclosures Hit Value Of Properties in Houston
It is not just the small fry anymore – foreclosures are now marching into billion dollar zones. Deutsche Bank is scheduled to foreclose on a $3.5 billion casino – Cosmopolitan Resort & Casino. The developer Ian Bruce Eichner took a loan of $760 on which he is defaulting.
Continue reading: Deutsche Bank Foreclosing On Billion Dollar Casino
Foreclosures are sparing none – not even HIV victims. The HIV victims are dependent on the landlord or the lenders for notifying them well ahead about the impending foreclosure suit. Starting from 2004 till 2007 foreclosure rates doubled in New York City with two to three family buildings being the prime targets.
Continue reading: Foreclosures Spare None Not Even HIV Victims
With the housing crisis worsening foreclosures are blighting entire neighbourhoods dotting the place with ‘For Sale’ and ‘Notice of Foreclosure’ signs. These vacant houses are a curse for the locality. The overgrown lawns creep up to the structures that begin to crumble.
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It is a buyer’s market as foreclosures are tempting buyers to dip into their pockets and invest in property. Recently the National Association of Realtors stated that the sale of existing houses increased by 3.1% in July as more and more buyers came forward to take advantage of the offers of heavily discounted properties.
Continue reading: Foreclosures Tempting Buyers
At a recent election forum the residents of Cactus Districts were quizzing candidates about foreclosures, taxes and funds for the city. They wanted to know what steps would be taken to improve the health of the neighbourhoods reeling under foreclosure related decline.
Continue reading: Residents Of Cactus Districts Quizzing Candidates About Foreclosures
