Foreclosure Repos Blog

In the Middle of Mounting Foreclosures Volunteers are Trying to Keep Hope Alive

neha — Fri, 06 Nov 2009 13:58:05 +0000

In the middle of escalating foreclosures groups of volunteers are trying to keep hope alive among the victims. One of the volunteers is Dorrett Martin working with Jamaica Plain housing advocacy group. She drives through her familiar Mattapan Square having lived here for a quarter of a century. Today her job is to meet strangers. She is accompanied by her friend Sandra Douglas. Her work is checking on the addresses listed as foreclosed properties. The pair stops at the marked doors and rings the bell.

When the owner is told that they have come from City Life to help foreclosure victims they are made welcome.

During weekends through the past one year the volunteers from City Life have been canvassing together with another organization named No One Leaves. They have spread themselves out into the foreclosure infested regions of Boston. Each week they call on 40 or 50 addresses to inform the occupants, whether tenants or owners, that they need not despair as help is available from various advocacy groups and legal bodies.

In 2008 there were 1,200 foreclosures in Boston. From January to August 2009 there have been 584 foreclosure postings according to Warren Group. On top of this 1,646 foreclosure petitions – it being the first move in the process – were filed from January to August 2009. The indication is that the troubles are far from over.

The worst hit localities have been Hyde Park, Dorchester, East Boston, Roxbury and Mattapan. One sixth of the population resides here. Dorchester was responsible for about half the foreclosures of Boston in each of the previous three years.

Volunteers of City Life are particularly empathetic as many have undergone the pain of foreclosures themselves. Dorrett Martin had lost her job quite some time ago. She had purchased her multi-family house in 1984 and brought up her four children from here. Last spring it was foreclosed. Sandra Douglas is her renter. She had moved in about two decades ago. The two were always close but adversity brought them closer with the friendship spilling over to their children. They are continuing to live in the house but under the cloud of eviction. Martin did not know if there were any rights but she was keen to help Sandy.

Those tenants who are aware of their rights can often buy time before shifting out. Some have wrested monetary compensation especially if the landlord allows the house to run to seed.

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Foreclosure Compels a Great-Grandmother to Survive in Strange Shelters

neha — Thu, 05 Nov 2009 13:07:50 +0000

Foreclosure is not just about cold statistics and figures. The dreaded word is laced with tears and pain. Each tale of woe provides sufficient material for a true life novel depicting the time and age America is passing through.

Sheri West is the mother of three grown children, grand-mother to 6 and great-grand-mother to one. For a year she has been trudging along passing the days and nights either in the front seat of her car or in the couches of friends and neighbours. Finally when all options ran out she knocked on the doors of a shelter. At one time she had owned and operated one such shelter for the homeless.

Initially renters from the low income group were seeking shelter but recently many landlords evicted from their homes are enlisting themselves. Larry Haynes of Mercy House in Santa Ana, California said, “These families never needed help before. They haven’t a clue about where to go, and they have all sorts of humiliation issues. They don’t even know what to say, what to ask for.”

Rick Cole of Ventura of California said, “We’ve seen a rise in people sleeping in their cars. Some are foreclosed former homeowners, and some couldn’t afford their rent. People will give up their house before they give up their car.”

Those who have some savings try to become tenants but their stained credit makes things difficult. An increasing number are staying in motels that are rented on a weekly basis. Entire families are packed into one room making use of hot plates to improvise for kitchens. But with rising unemployment even this protection will soon vanish. Friends and families often offer hospitality in extra rooms, basements and attics. But in the normal course this cannot last for a long time. Relationships snap.

West and her husband and two children came to Cleveland in the 1990s. They started off as tenants but one day she fell in love with a locality by the Cuyahoga River that drew like a magnet many Black families like hers. She purchased it for $45,000 using as down payment ($9,000) money left to her by her mother. The couple took over the mortgage of the previous owner. The payment was affordable – monthly $400.

At that time both husband and wife had satisfactory jobs. With the passage of years they made alterations and additions to the house as more children appeared. She then bought another house with her mother’s inheritance and converted into a shelter for five homeless persons. She ran the show by doing their washing, cooking and reminding them about their medicines. She accepted $750 per month from each person.

The problem started when the couple began to spend more than what they earned. Finally when he left her and the financial crisis started West found herself in an inescapable trap!

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More Middleclass Properties Listed for Foreclosure in Florida

neha — Wed, 04 Nov 2009 12:07:50 +0000

The records of the Realtors Association in the southwestern part of Florida, says that the properties listed under the bank foreclosures here mainly belong to middleclass families.

It was noticed that the foreclosed properties were slightly less in September this year, in the Lee County area. In other places, the houses that are priced high faced foreclosure notices because of payment irregularities.

Things seem to be looking up as the total number of foreclosures dropped remarkably in September from that of August this year. About eight two houses were less this time. It has been a massive fall in the foreclosures since September last year when the total went up to 2462 houses. This September saw only 1610 properties foreclosed.

The real estate head Jeff Tumberello, observed that almost all the houses had a swimming pool. This means that the price of those properties is obviously high leaving only the people with high income the ability to purchase them.

Jeff also observed that in recent times the foreclosed properties were mainly houses that cost low. Investors had a great time buying them easily and when the prices dropped the houses were sold off.

The scene has now changed and the more expensive houses can be seen more in the list of foreclosures. This can be specially seen in Fort Myers. The bank list of foreclosures now abounds in expensive houses that are given up by the owners. However places like the Cape Coral still have most of the middleclass houses in the foreclosure lists. So does Lehigh Acres. Nearly forty percent of the total foreclosed properties are form the Cape Coral while the latter has nearly twenty percent of it.

An experienced member, Timmerman of the consulting firm Fishkind and Associates, is of the opinion that the continuous economic recession has had a bad effect even on the people who had taken prime loans.

In Lee County the number of jobless people is increasing .This August unemployment is up by 13.5percent. When converted to numbers it was seen that about thirty six thousand five hundred persons were jobless in Lee County alone this August, which is a little less than the previous month. However, compared to last year this is nearly ten thousand people less.

In August while the jobs based on agriculture became less, the government employment saw a rise. This is because the government has often hired support personnel to cope with the work load. Even the tourism sector suffered as the number of tourists gradually dwindled. That in turn gave rise to unemployment in this sector too.

Therefore, it is generally seen that the increasing number of foreclosure in the bank list is mainly due to unemployment.

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It is Time to Dwell on the Lessons to be Learnt from the Foreclosure Crisis

neha — Tue, 03 Nov 2009 12:00:15 +0000

It is now time to dwell on the lessons to be learnt from the foreclosure crisis in order to avoid a rerun of it. It is like going back to the scene of crime and see what can be gained from the losses – gains in the form of lessons learnt.

Riverside also known as Inland Empire lying east of Los Angeles was the worst affected by the foreclosure crisis. It came from unregulated predatory lending of sub-prime loans that led to the housing boom prior to the housing bust. The crisis pushed America into the longest recession since the 30’s.

Melindia Opperman of Riverside’s branch of Springboard (non-profit counseling body) said, “Welcome to Ground Zero. This is where the canary died.” She was referring to the practice of a canary bird being used to test the presence of any toxic fumes in coal mines. The Riverside real estate market was definitely one of the most poisonous in the nation. It had the fastest growth during the boom and came to be followed by an equally ferocious reversal.

The cal of the hour is to plug the holes and bring back wealth to the consumers. For this banks have to be stricter in their internal systems and governance. The regulators with red faces have to now show that the can really protect the house owners and also supervise the lenders.

But so far the response to the housing crisis has been poor and the stability has yet to return that will bring back home of recovery in the near future. The actions taken by the government focusing on the corporate sector causes fare that the same conditions are now showing up that led previously to the housing crisis.

Some are saying that the crisis is drawing to a close but unemployment continues to increase and there is still a shadow inventory of bank repossessed homes that might any day hit the market and further pull down prices. Voices are being raised giving out warnings that no lessons seemed to have learnt. Those who are saying that the worst days are over are just being optimistic.

Peter Shiff of Euro Pacific Capital a brokerage firm that drew attention to itself for is accurate prediction of the crisis in 2004 said, “The same people who told us there was no crisis are the ones who are telling us it’s over. He is warning that real estate prices will soon be going for another tumble as the option ARM loans are starting to default.

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Foreclosure Effect: Home Prices Crash to 1999 Levels

neha — Fri, 30 Oct 2009 13:02:22 +0000

The real estate industry in the US is in a mess. As people lose jobs they are faltering on mortgage payments. Hence, foreclosures have become common. The prices of foreclosed properties have dipped over time. What’s amazing in some regions prices have gone down to the 1999 level.

People buy homes with the notion that the prices would increase over time. But in the US exactly the opposite is happening. The home values are depreciating over time.

There are nine ZIP codes in Palm Beach and Broward counties that had lower average sales price than they did in 1999. This was revealed by San Diego-based research firm, MDA DataQuick.

Michael Keigans lives in the ZIP code of 33441. The median price was only 6 per cent off what it was in 1999. He says that people buy homes with the hope that the property values will appreciate. This way the homes can be sold and the net worth can be built upon. However, there are no such guarantees.

It may be noted that a decade ago people who bought homes in the Hallandale Beach ZIP code of 33023, they paid around $120,000. These homes now carry a price tag of $100,000. That means the long-time owners are not going to benefit from the fact that they have held on to their investments. In the ZIP code of 33444, the median price was $136,000 a decade ago. Now the sales price is $81,500. That means there has been a 40 per cent decrease.

Although prices have seen a decline in some major counties in South Florida, in 90 per cent of them, prices are higher than what they were 10 years ago. The problem in these ZIP codes is that people in the low income group live here. They had taken sub-prime loans and naturally they defaulted on the mortgage payments when the housing industry crashed. An analyst with Metrostudy in West Palm Beach, Brad Hunter says that many people with who do not have good credit history are residents of the region.

Hunter says that many people were induced to buy homes that could not afford. Hence, they defaulted on mortgage payments. That led to foreclosures which brought down the property prices of the homes in the neighborhood. People who bought homes in the nine ZIP codes are now running up a loss. There are some big winners and losers in the game.

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Foreclosure Crisis has Cornered BofA in More Ways than One

neha — Thu, 29 Oct 2009 12:12:45 +0000

The foreclosure crisis has cornered Bank of America in more ways than one. First it had to take over Merrill as the latter began to collapse and then it got embroiled in a controversy regarding payment of bonus to Merrill executives. The SEC filed a case against BofA but the latter decided to come to an agreement with it.

But after questions were raised the bank has agreed to waive the privileges of the law. This will make it mandatory for the bank to provide more relevant details about how much information it had when it took over the investment bank, said the federal regulators.

The court has yet to give its nod to the agreement. By it Securities and Exchange Commission would be permitted to look into further details regarding the failure of the bank to give information to the shareholders about the condition of Merrill Lynch and its potential losses.

Investigators appointed by the Congress together with Andrew Cuomo, the Attorney General of New York will be able to get access to the information that has been protected according to a correspondence the bank dispatched to the office of Cuomo.

Bank of America is hemmed in by legal suits and investigations initiated by legislators as well as regulators. Cuomo has been threatening bank officers and trying to get more information about those who knew the scenario prior to the vote by the shareholders approving of the take over on 5th December 2008.

BofA insisted that it had nothing to conceal. Spokesperson Larry Di Rita said, “Attorney-client privilege is a very important business principle, but given the pressure in several inquiries for further insight, we decided to waive it in this matter. We have nothing to hide and believe our actions throughout the Merrill Lynch acquisition were appropriate and in the best interest of our shareholders.”

In last September a federal judge did not accept the $33 million settlement Bank of America had reached with SEC. The allegation was that the investors had been misled about $3.6 billion that had been distributed as bonus to the employees of Merrill. Jed Rakoff, the District Court Judge blamed SEC for agreeing to the efforts by the bank to take advantage of attorney-client privilege and bypass disclosing what the executives together with the lawyers knew about its authority to pay these bonuses.

At the centre of the controversy is the CEO of Bank of America Ken Lewis who is about to retire.

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As Health Care Bill Stumbles the Door Remains Open for Future Foreclosure Crisis

neha — Wed, 28 Oct 2009 13:15:23 +0000

Despite high hopes that there would a radical change in the health care system itself what is going to take place will be an extension of the existing system. There will be no change in health care. The focus will be on health insurance reform. As the health care bill stumbles, thanks to lobbying by vested interests, the door remains open for future foreclosure crisis. When the people suffer they fail to pay mortgages and pull down the entire country into the throes of a crisis that benefit only the few.

The most sensible approach was one taken by Sen. Ron Wyden (Democrat) but that has been replaced by a bill initiated by Sen. Max Baucus (Democrat) – it is surfacing from the Senate Finance Committee.

The above bill centralizes power and does not allow for free choice. The latter approach would have led to decentralization. The aim of the Baucus bill is to cut down costs, expand the coverage and develop the competence by permitting the regulators to draw up an improved set of rules. It aims to make the present system more rationalized from the top to the bottom.

There are many weak spots to this approach. It keeps running the same system that is entrenched. It allows for more uniformity and greater rigidity. It disburses the income from the young who are politically disorganized to the old who are politically better organized. It crowds in the people into the complex maze of bureaucracy founded on income levels. It will place huge expenses on the ordinary people as they go up the income ladder. It has the potential to disrupt the entire economy.

The gravest defect is that it will cap any sort of innovation. Systems that work from the top down do not allow for much innovation despite cramming in Department of Health and Human Services with Innovation Centers. Innovation routes will be blocked by the use of monopoly authority with the sole aim of cutting down costs. It will also block innovation by channeling resources towards those who are under the current care and consequently the current voters. It will move away from future improvements in technology and future recipients of benefits.

Since something is better than nothing it has to be admitted that the Baucus bill at least is better than the present status quo. It will ensure social benefits to an extra 29 million people and health care will be more fiscally responsible.

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Hotel Properties Fall Prey to Foreclosures

neha — Tue, 27 Oct 2009 13:00:43 +0000

The US economy is on a tailspin what with unemployment reigning high. As people lose jobs, they are faltering on mortgage payments. Hence, foreclosures have become common. Now hotel properties are falling prey to foreclosures as well. They are losing out on revenue as well.

Take, for instance, Pompano Beach hotelier Richard Manzelli. He feels he is lucky that his motel is operating at least one-third of capacity in the weekdays. This is in part due to the monthly rentals that he has offered to people on temp jobs.

In fact, there are many hoteliers in South Florida who are faring worse than last September. Some say this has been the worst month ever. Manzelli says that he has been able to boost occupancy by giving heavy discounts. He has even rented out his motels. Most of his guests are those who have found his modest lodging a better option during the downturn than the high-priced lodging.

The Ronny Dee Resort Motel does not have any bar or restaurant. The prices too are negotiable. Customers can avail of rooms at prices that are much below the published rates of $68 per night. Manzelli says that business is no doubt slow, yet he is trying to hold fort.

The news is even worse in other areas in South Florida. Revenues of some hotels have plunged by 20 per cent if not more. There are other operators in Broward County who are calling September the worst month for tourism. One of the reasons could be that even condominium associations are renting out rooms just to collect fees. That is increasing competition for the hotel operators who are not getting guests to occupy the empty rooms.

Other operators are saying that they are depending on their savings in order to survive. They are literally struggling to pay their insurance and property tax. Both have increased by leaps and bounds in the recent years.

The large hotels are also bearing the brunt of recession. As people lose jobs, the hotels have to give large discounts in order to pump up sales. The Westin Diplomat Resort and Spa in Hollywood has got packages for tourists. This will help offset the plunge in conventional business. There are spa deals and free nights amongst the promotions. The hotel also offers discount coupons on spa treatments. There are free yoga classes as well.

Hoteliers hope to pump up sales this way.

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Foreclosures High - Small Businesses Suffer Too

neha — Mon, 26 Oct 2009 11:48:47 +0000

The US economy is going through a turbulent phase. With the recession has come the job loss. Subsequently people are faltering on mortgage payments. Their houses are being taken over by banks and foreclosures are common. A recent trend that is being noticed is that even small businesses are suffering because of the downturn.

A survey was conducted on the Chinese, Latino and Vietnamese entrepreneurs in Oakland and San Francisco. La Palma Mexicatessan is one of the busiest outfits on 24th street. The outfit is famous for its tortillas which it sells to restaurants. Grocery items are also sold from here. The owner of the store, Mario Castano says that customers are not buying food from outside. They are finding it a better alternative to cook at home.

The dry cleaning business has also taken a hit. Most of these businesses, being owned by the Chinese Americans, are running at a loss. Betty Chan, who owns Rainbow Laundry, says that a majority of his customers have been laid off. They no longer need to iron and clean their suits. The business has dropped by 30 per cent subsequently. Michelle Zhu, who owns another laundry business, says that customers come to the shop only before job interviews. Zhu says that the business has perhaps hit the trough. It has never been as bad in the last 12 years. Zhu says that most of her customers have migrated and she no longer sees many of them.

The impact on a cleaning business depends on its location. The impact is more severe if it is close to the financial district. Jack’s Dry Cleaning business has seen a 10 per cent plunge. Cleaners also say that the customers are making lesser requests for ironing clothes too. Discounts are being asked by customers more frequently. Zhu is giving his clients at least 5 per cent discount. After all business is down and most are willing to cut back on laundry services.

When customers complain of shirts being not clean enough then Chan readily does a second wash. She just cannot afford to lose any of her clients. Most of these small-time entrepreneurs have stopped splurging on dinners outside.

The parlor business has also been hard hit by the downturn. The owner of Susan’s Nail and Spa in Oakland, Susan (Xuan) Le, says that her business has hit a hard patch. Whereas earlier, the entrepreneur used to make $200-$300 a day, her earnings now dropped to $10 a day.

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Foreclosure Crisis Mired by Failing FHA Reserves

neha — Fri, 23 Oct 2009 14:30:54 +0000

The Federal Housing Agency by overextending its insurance benefits has guaranteed loans of many people whom other private lenders would not generally have entertained. But these borrowers are now defaulting in large numbers causing the reserves of FHA to drop dangerously.

Kenneth Donahue of HUD said, “It might be we’ll get ourselves out of this and that everything will be fine, but I don’t paint that rosy a picture. They’re banking on the fact that the economy will continue to improve, that the housing market will begin to sustain itself.” He observed that if the private lenders had increased their down payment conditions in the past two years it gave rise to the inevitable question of “what does the F.H.A. think it is doing by asking only 3.5 percent?”

One of the beneficiaries of the generosity of FHA is Chaz Fullenkamp – an automotive technician residing in Columbus. He received a FHA loan although he was somehow managing his finances. He commented, “If I got unemployed, I’d be wiped out in a month or two,” he says. Thanks to the F.H.A., however, he is better off than he used to be.” He used the insurance coverage of FHA to purchase a foreclosed house last spring paying $179,000. The seller was so eager to dispose of it that he bore the closing costs and on top of that put into Fullenkamp’s pocket $2,500 in cash. Fullenkamp then immediately applied for rebate in taxes and came out well ahead. He admitted, “I knew in my heart I could not really afford the house, but they gave it to me anyway. Wow, I’m surprised I pulled that off.”

While on one side the number of loans has surged ahead the controlling checks on quality have gone down say the staff members of FHA. Donohue quoted many instances of organized fraudulent testimony being placed before the Congress early this current year. Speaking at an interview Donahue said, “They need to stop taking bad loans in the door. They’re taking on all this volume, they have to have very active underwriting standards.”

Another beneficiary was Bernadine Shimone. If she had failed to get the loan she would have remained a tenant. In any case she used up her retirement savings and hardly had money for closing costs. The house she moved into was covered with trash and she had to spend a lot of time clearing the mess. Was it such a good idea to give Shimone a loan? Even she does not fully agree as her mortgage payment eats up half her monthly income.

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Foreclosure Repos Blog

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