Massachusetts Foreclosed Homes

Presidential Candidates Differ On Foreclosure Fix

Democrat Party presidential hopefuls Hillary Clinton and Barak Obama have been talking about the foreclosure mess recently, with Ohio, a state hit hard by foreclosures, going to the polls on March 4, 2008.

The candidates differ on how they would approach fixing the foreclosure crisis.

Clinton believes that government intervention is necessary. She proposes ceasing foreclosure proceedings for 90 days to allow borrowers and lenders to work on modifications, instituting a five-year interest-rate freeze on adjustable-rate, subprime mortgages for primary residences only, and the use of government-backed mortgages to refinance borrowers who can no longer manage their monthly payments.

On the other hand, Obama believes that government involvement will force lenders to put the brakes on making new loans and modifications. Instead, he is focusing on stricter penalties for predatory lenders, tax credits for mortgage interest and a $10 billion fund dedicated to preventing foreclosure and assisting first-time buyers.

Source: REALTOR® Magazine Online

U.S. Foreclosures Rise 75% In 2007

With mortgage loans becoming increasingly more difficult to refinance and home values declining, the number of U.S. homeowners entering the foreclosure process rose 75 percent in 2007 compared to 2006,  Boston.com reported January 30, 2008.

More than 1 percent of U.S. households were in some stage of foreclosure during the year, up from 0.58 percent in 2006. RealtyTrac, Inc., a foreclosure data company, provided the statistics.

For the year, more than 2.2 million default notices, auction notices, and bank repossessions were reported on about 1.3 million properties.

Read The Boston.com Article

Cleveland Sues 21 Banks Over Foreclosure Mess

With foreclosures adding up, the City of Cleveland has sued 21 banks, claiming that the banks' subprime lending practices created a public nuisance that hurt property values and city tax collections, USA Today reported January 11, 2008.

It sounds like a stretch to me.

The lawsuit seeks to recover hundreds of millions of dollars in damages, including lost taxes from devalued property and money spent demolishing and boarding up thousands of abandoned houses.

Cleveland is not the first city to sue lenders over mortgage troubles. A few days earlier, the City of Baltimore sued Wells Fargo, alleging the bank intentionally sold more high-interest mortgages to blacks than to whites in violation of federal law. The city alleges that Wells Fargo targeted black neighborhoods for high-risk and unfairly priced loans. Wells Fargo denies the claim.

Read The USA Today Article

Minorities Hit Hard By Foreclosures

The Boston Herald reported January 15, 2008 that a new study shows that the subprime-mortgage crisis will cost black and Hispanic homeowners up to $256 billion," the worst financial hit for minorities in modern U.S. history."

“'The dream that Martin Luther King Jr. once spoke of has been foreclosed,' Boston-based United for a Fair Economy wrote in a report set for release to coincide with [the] 79th anniversary of King’s birth."

Based on previously released data on the subprime meltdown, the study projected "blacks" will lose $71.5 billion to $121.6 billion on high-cost mortgages taken out over the past eight years. Hispanics will forfeit another $75.8 billion to $128.9 billion.

"41 percent of blacks and 32.8 percent of Hispanics who bought homes in Boston or five other major cities in recent years used high-cost loans. By contrast, only 6.9 percent of whites used such mortgages.

"Blacks got 54.7 percent of all high-cost mortgages issued nationwide, even though African-Americans represent just 13.4 percent of U.S. population.

"Even among upper-income buyers, 54.4 percent of blacks and 48.9 percent of Hispanics used high-cost loans. By contrast, just 16.4 percent of higher-income white buyers received such loans."

An industry spokesperson told the Herald that she rejects the idea that discrimination is wide spread.

Read The Boston Herald Article

More Help For Homeowners Facing Foreclosure

President Bush signed legislation that will provide financial relief for homeowners facing foreclosure or in bankruptcy, the Boston Herald reported December 20, 2007.

"The bill gives a tax break to homeowners who have mortgage debt forgiven as part of a foreclosure or renegotiation of a loan. No taxes would be owed on the value of any debt forgiven or written off. Currently such debt forgiveness is taxable income."

It is anticipated to reduce taxes for some homeowners by $650 million; however, the cost to the government would be offset in part by limiting a tax break available on the sale of second homes.

In other words, if you saved your money, made sound financial decisions and were able to purchase and then sell a second home, you have to pay higher taxes. If you bought a home you couldn't afford and made poor 
financial decisions, you get a tax break. Happy holidays!

Read The Boston Herald Article

Treasury Official Defends Bush's Mortgage Plan

Undersecretary of the United States Treasury for Domestic Finance, Robert Steel, spoke with National Public Radio on December 14, 2007 and defended the Bush Administration's decision to make it's subprime mortgage plan voluntary.

Listen to the NPR Interview of Robert Steel, Undersecretary of the Treasury for Domestic Finance

Freddie Mac Video Fights Foreclosure Scams

One of the largest investors in mortgages in the U.S., Freddie Mac, has produced a video about how to spot foreclosure scams and avoid becoming a victim of a fraud artist.

Freddie Mac decided to produce the anti-fraud video for YouTube after a 2007 company-sponsored study discovered that 25 percent of delinquent borrowers go to the Internet first for mortgage information, only slightly less than the number who called their mortgage lender (28 percent) or bank (32 percent).

According to a press release, Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multi-family residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home ownership possible more than 50 million times, ensuring financing for one in six home buyers and more than four million renters.

Beware Of Foreclosure Scams

This Reuters video from August 2007 discusses foreclosure scams, and how the ethically challenged (aka, scum bags) prey on those facing foreclosure.

State-By-State Foreclosure Rates

USA Today compiled a state-by-state mortgage delinquency and foreclosure chart. The chart's figures are valid through the third quarter of 2007.

The date comes from the Mortgage Bankers Association.

View the mortgage delinquency and foreclosure chart

RealtyTrac also released state-by-state foreclosure statistics.

Subprime Plan's Fine Print

The Boston Globe reported on December 7, 2007 about the "fine print" in the Bush Administration's subprime plan.