Foreclosure Recap – Week #42
Out of the mouths of babes. In the first story this week is a fourth grader who asked president elect Obama “Why do people hate you?” President Obama was making his first Presidential visit to New Orleans this week and while there he attended a town hall meeting. During Thursday’s meeting, the 44th President answered some tough questions but the toughest question of all came from the 9-year-old fourth grader. The story fills in some of the gaps as to what the president is thinking and gives us an insight as to how his thought process goes.
If you, like millions of other Americans and investors in this country are considering the purchase of a foreclosure either to personally live in it or to try and hold it to make money, then you definitely will want to review this story. It walks you through what it considers to be the seven steps you need to take when purchasing a foreclosure to make sure that you don’t end up on the proverbial short end of the stick. The guidelines are just that, guidelines but if you follow the outlined steps they claim that you can easily save 50 percent off the homes actual value and in many cases end up with property at as much as twenty percent below what property in any given area is actually selling for at the moment. Twenty percent lower than fifty percent is an astonishing deal.
Ok, we all know that the country, in fact the entire world is in a crisis when it comes to homes and mortgages. That is no secret. But how bad do the powers that be expect it to be once the numbers are all totaled up at the end of the day? If you believe what is written here in this article, those numbers are going to be absolutely staggering. According to the story 25 million is about where it could and should end up at the current rate and following the foreclosure forecasts. In fact at the current rate of files, a new foreclosure is filed about every ten seconds ion this country alone. Even though things have slowed a small bit, we’re not out of the woods. Six states account for 62% of the nation’s foreclosure activity: California, Florida, Arizona, Nevada, Illinois and Michigan.
In a story from the Grand Rapids Michigan press we find that over half of the nearly 14,000 homeless people in western Michigan are homeless for the first time in their lives. The story tells of the hard side of life in the Great Lakes state and how what once was the stereotypical homeless person to be a derelict drug addict wandering the streets in search of food and a fix. But today you are more likely to find a family that was not long ago a middle-income group living in a comfortable home before a job loss caused them to slip into the statistics of the current crisis.
CBS news brings us a side of things that we don’t often think about. Again we are coming to you with thins out of the state of Michigan. It seems that the officials there are concerned that the more than 40,000 newly foreclosed and emptied homes in the Detroit area are going to become targets, especially with Halloween approaching, by would be arsonists that are just looking for some kicks. It seems that there have been a rash of fires that have been called arson lately and they expect that the numbers are going to go higher as people just do things they never would have ordinarily done. In fact some even suspect that the folks that were evicted might decide to ignite the old home figuring if they can ‘t have it, no one will.
It seems that the previously affluent area around Fishers, Indiana near Indianapolis has been extremely hard hit with the present crisis in the foreclosure market. A proposed water theme park that was to be built in the area has been hit for yet another time with financial issues that have left the future of the entire project in doubt and jeopardy. The developer of the proposed $80 million project is facing foreclosure on the property at the same time adjoining land critical to the project’s development has been scheduled for liquidation by a lender. The project was to be known as Paradise Bay was to have been constructed on the former Britton Golf Course site at State Road 37 and East 131st Street, but is roughly two years behind schedule leaving speculation to the fact that it may never see the light of day.
You might think that there would be ways that foreclosures could be stopped. And the reality is that there are recent reports that show that some people who could stop foreclosure on mortgage loans are not doing so because the lenders are finding a financial advantage in avoiding modification programs. The report, which was produced by the National Consumer Law Center (NCLC), noted that mortgage service providers may find it more cost effective to encourage people to go into foreclosure rather than start them on a home loan modification program to find debt help. That is disturbing to most people that find out about it because these are the people that are supposedly put in the position to make things better for the consumer and instead are not doing it but are instead attempting to lead people to foreclosure rather than away from it.
This week we’re going to end on a happier note than usual. This is a story about a lender, Bank of America who chose not to foreclose on an elderly couple that has been in the home for over forty years. The wife is terminally ill and they were about to be evicted when the Bank of America stepped in and employed an unusual tactic that is being used on occasion to help some debt-strapped seniors locked into exotic mortgages known as option ARMs from losing their homes. The loan modification has made it possible for the elderly couple to remain in their home almost payment free. They set him up in a reverse mortgage the bank paid the proceeds to its self. A reverse mortgage is a form of equity loan available to older homeowners that generally doesn’t need to be repaid until after the homeowner dies. That means he can remain in his home without having to make mortgage payments. When he dies, the house reverts to the Bank of America, and his heirs can choose to buy it back for the $85,000 plus interest and fees. Or, if the heirs choose to walk away, the bank can sell the house, and any proceeds above the loan amount would go to Mr. Garcia’s family.
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