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Mortgage Loan As A Harbinger of Foreclosure

--By Priya Jestin, Staff Writer

There’s one good thing about bad news – more often than not, it sends you some form of warning before arriving. No, I’m not joking. If you look hard enough, you’ll find a pattern just about everywhere – from natural storms to stock market crashes. Well, I’m dealing with neither but with something more closer home – foreclosure. It is important to know the warning signs of foreclosure to prevent it from happening to you. So, what exactly are these signs?

Is your house worth less than what you owe? I know this sounds odd especially when house prices are not exactly crashing. But this is a very real possibility. The risk of foreclosures is very high if you’ve taken a loan in excess of 80 percent of your home’s purchase price. The problem is that you are stretching your budget well beyond your means. And in the event of a fall in prices, you could be badly stuck.

Exotic Mortgages: I think I’ve written more and enough about Adjustable Rate Mortgages, other exotic loans and the risks associated with them. For a short period of time, monthly payments are quite low and bearable, and then the problems begin.

Behind on mortgage payments: This is one of the biggest indicators of a coming problem. There could be many reasons like loss of job, illness, death in the family – of the earning member. Just about anything that contributes to reduction in income could adversely affect your payment capacity.

You can address all these factors. But time is of essence. It is important to contact a skilled lawyer before foreclosure starts.

Prevent Foreclosure With A Chapter 13 Filing

-- By Priya Jestin, Staff Writer

Did you know that a Chapter 13 bankruptcy is also called a wage earner's plan? That’s because it allows individuals with regular income to develop a plan to repay all or part of their debts. Uscourts.gov reports:

Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under ths chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time.

Read more: Bankruptcy Basics

Hotlines, Counseling Aim To Stem Baltimore’s High Foreclosure Rate

Baltimore is witnessing a disturbing trend. Agreed, the number of foreclosures in the city dropped more than 8 percent over a four-year span. However, a new study shows that the rate of foreclosures compared to the number of homeowners in the city was almost twice that of Philadelphia. This trend has cost the city $1.8 billion.

This trend is causing great concern among the city agencies, housing groups, lenders and nonprofits. So they decided to come together and launch a new initiative to help people facing foreclosure. They also hope to sustain Baltimore's momentum in boosting its roster of homeowners with this move. Baltimore.bizjournals.com reports:

Prospective homebuyers will get access to independent counseling on the costs of homeownership and spotting fraudulent real estate practices as part of the effort launched by Mayor Martin O'Malley and a new group called the Baltimore Homeownership Preservation Coalition. Homeowners threatened with foreclosure will be able to call 311, the city's One Call Center, where operators will connect them to trained counselors and refer them to housing aid organizations.

Read more: City's high foreclosure rate spurs hotline, counseling

The ‘R’ Route To Avoiding Foreclosure

Foreclosure is a painful reality in America today. Growing numbers of families are now facing the imminent threat of foreclosure. But it need not be so. You could forestall foreclosure by resorting to certain steps. You will have to take your lender into confidence and try to work out a plan of action. Here are two things you can try out:

Refinance: Here you can speak to your lender and find out if you can refinance your current loan into a new loan. This will be an especially good option for people with ARMs. You could refinance into a fixed-rate loan.

Restructure: In case you cannot meet the terms of your loan, you could speak to your lender and try to get the interest rate or other loan terms modified.

Avoid Foreclosure; Talk To Your Lender

Nearly 300,000 Americans lost their homes through foreclosure last year. And that is not the disturbing fact -- Nearly half of these people never tried to even talk to their lenders! Delawareonline.com reports:

People in financial jeopardy often are embarrassed to talk about their problems. They don't think their lender will help them, and some are even afraid the lender will use any information against them to foreclose faster. "There is a huge myth out there that financial institutions want to take the property back, that that is their real intention," says Marietta Rodriguez, interim director of the NeighborWorks Center for Foreclosure Solutions. In fact, foreclosing on a home and then reselling it costs a lender almost $59,000 on average, according to Freddie Mac.

Read more: Talk to lender to forestall foreclosure

Foreclosure: Know Your Enemy

There’s one good thing about bad news – more often than not, it sends you some form of warning before arriving. No, I’m not joking. If you look hard enough, you’ll find a pattern just about everywhere – from natural storms to stock market crashes. Well, I’m dealing with neither but with something more closer home – foreclosure. It is important to know the warning signs of foreclosure to prevent it from happening to you. So, what exactly are these signs?

Is your house worth less than what you owe? I know this sounds odd especially when house prices are not exactly crashing. But this is a very real possibility. The risk of foreclosures is very high if you’ve taken a loan in excess of 80 percent of your home’s purchase price. The problem is that you are stretching your budget well beyond your means. And in the event of a fall in prices, you could be badly stuck.

Exotic Mortgages: I think I’ve written more and enough about Adjustable Rate Mortgages, other exotic loans and the risks associated with them. For a short period of time, monthly payments are quite low and bearable, and then the problems begin.

Behind on mortgage payments: This is one of the biggest indicators of a coming problem. There could be many reasons like loss of job, illness, death in the family – of the earning member. Just about anything that contributes to reduction in income could adversely affect your payment capacity.

You can address all these factors. But time is of essence. It is important to contact a skilled lawyer before foreclosure starts.

Mortgage Bankers Worried as East Bay Foreclosures Rise

As home foreclosures continue to rise across the East Bay, with Alameda, Contra Costa and Solano counties, mortgage bankers can no longer suppress their concern. They are commissioning classes and producing publications to stem the rash of defaulted loans predicted for next year. Contracostatimes.com reports

Aside from the financial problems, many defaultees report a feeling of loss, numbness and denial that keeps them from acting during default and foreclosure -- worse, they become easy prey for con artists.

Read more: East Bay Foreclosures On The Rise

Innovative Solutions to Foreclosure Problems

Foreclosure has become a national problem now and just about anybody who can find a solution to this problem is encouraged and appreciated. In such an attempt, NeighborWorks America recently announced national honors for three organizations that have developed innovative and cost-effective approaches to preserve homeownership for families in jeopardy of foreclosure.

Montana-based Neighborhood Housing Servicing of Great Falls (NHSGF) got recognition in the “Innovative Outreach” category, for their ‘Who’s Got a Sheriff?’ program. In the state of Montana, the Sheriff’s office serves all foreclosure notices. This way, whenever a foreclosure notice is served to a homeowner, the county Sheriff provides valuable information on NHSGF’s foreclosure prevention services. The Consumer Credit Counseling Services of San Francisco’s Outbound Telephone Counseling program also won accolades. At the time of mortgage delinquency, CCCS doesn’t wait for the family to call, and calls them instead. Dsnews.com reports:

In the “Innovative Partnerships to Prevent Foreclosure” category, the Tippecanoe County HomeOwnership Preservation Initiative (HOPI) in Lafayette, IN was recognized. Lafayette Neighborhood Housing Services (LNHS) and other partners brought foreclosure problems to the attention of municipal officials and leaders through the Tippecanoe County HomeOwnership Preservation Initiative (HOPI). The group studied local causes of foreclosure and defined potential solutions, and a successful partnership between citizens and LNHS yielded positive results for the community.

Read more: NeighborWorks America and MetLife Foundation Recognize Key Foreclosure Prevention Efforts

Is Your Home the Here Today, Gone Tomorrow Variety?

To reduce the number of foreclosures in the Taunton-Attleboro area, Massachusetts, Pro-Home Inc., a non-profit group is counseling homebuyers before they get into trouble. The group is trying to help homeowners facing foreclosure navigate their way through the crisis.

According to recent statistics, foreclosure figures in Massachusetts have shot up in the past few months. Figures for the second quarter show that foreclosures have increased 66 percent. This figure leaves in its trail, ruined families, their finances in a mess and an uncertain future. These people may even not be able to envisage a future where they could get back into a home of their own. I know all this sounds scary, but we should get beyond the fear and look for solutions.

You probably couldn’t do much about the bursting of the housing bubble. But you cannot disagree with me when I say that you’ve done your bit to worsen your situation. How so? Well you allowed an aggressive lender pressure you into buying a home you just couldn’t afford. Or you fell into an online mortgage lender trap, which seemed so great – you didn’t need to prove income and were qualified for much more than you could afford. I mean, why couldn’t you see through this trick. It was too good to be true. Right? Then why didn’t your alarm bells ring?

Fine, I guess I’ve done my bit. Now for people in the Taunton-Attleboro area, there’s help. Pro-Home doesn’t just advice you on what you can do. It actually offers concrete help. As of now, I don’t have many details on these guys. But I promise, I’ll be back with some more info on this group and any other in other states. Till then, try holding onto your homes.

Debt problems? Foreclosure need not be the answer

If you have used up all the equity on your home, you are probably feeling extremely lost and dejected. You have probably even thought of walking away from the whole thing and letting things take their own course. In other words, you probably think foreclosure is the only option available. Take heart. It need not be so. One of the first things you need to do is banish the thought of foreclosure from your mind.

Apart from the emotional aspect, it will also be a big financial loss to you. How? Well even if you allowed foreclosure, you would still owe your loan amount or the balance on it, in addition to the fees. So if you allow the bank to sell your house and the price it gets is not as good as you thought it should be, you are left with a huge deficit. Whatever you decide to do, be sure you understand the long-term consequences of your actions, including the effect of your choice on your family situation. There is more than money at stake here.

Here is a viable option that could help you come back from the brink. It’s a simple plan, which can help you increase your income or reduce your expenses until you can come up with the mortgage deficit. You might consider renting your home. While this is a last-option kind of thing, if you can do it carefully, you will find that you can earn some money from it. Although not ideal, this might buy you some time for saving the required amount. With the right people in your home and a little luck, you may be able to ride out the storm.

Foreclosures on rise

As the prices of homes plateau, and mortgage rates rise, there has been an almost corresponding increase in the number of foreclosures, especially in the Midwest region. A recent survey shows that there has been an upsurge across the United States in foreclosure rates and mortgage delinquencies. Madison.com reports:

Nationally, the number of mortgage loans that entered some stage of foreclosure - the process by which banks can ultimately take back the properties that secure mortgages - rose to 117,259 in February, up 68 percent from the same month a year ago, according to Irvine, Calif., online foreclosure data service RealtyTrac.

Read more: Home mortgage foreclosures on rise

Foreclosure-prevention forums on the prowl

As interest rates rise and people find it difficult to repay their loans, foreclosures are becoming more common. This is happening more in the case of people who are already living on the edge and have probably bought their homes using the much-reviled sub-prime mortgage loans. So, they find it doubly difficult to repay their loans and are forced into foreclosure. My original assumption was that there probably was no easy solution to this problem. Of course, the solution is not easy but the fact that there is a way to solve this crisis is welcome enough. As these foreclosures become more of a norm than an aberration, many of the people involved in the business are beginning to feel the pinch.

Now a group of 70 businesses in Columbus, Ohio, have set up a task force to try to reduce the number of foreclosures in the city. The group plans to host neighborhood forums that will provide information on foreclosure issues. The task force has been planning the forums since December. The group is led by Franklin County Treasurer Richard Cordray and includes realty agents, builders and housing agency representatives.

Ohio drowning in foreclosure soup

Ohio seems to be in a pretty bad shape as far as foreclosures are concerned. According to reports, one of every 71 households in Ohio filed for foreclosure in 2005. Around 64,000 foreclosures were filed last year. This figure is four times the number from a decade ago according to a report released by the Cleveland nonprofit group Policy Matters Ohio.

The number one cause of this high foreclosure rate was the prevalence of predatory lenders. Interestingly, even two years back, county sheriffs have been warning the state that these lenders were causing unprecedented foreclosures Job losses were another cause. This state, which already has the dubious distinction of being the foreclosure capital of the country, is headed for worse news. Filings jumped to more than 8 percent in 2005, and according to experts, the worst is yet to come

Beware of foreclosure frauds

If you are facing problems with your mortgage, which could lead to foreclosure, be warned about a type of fraud that is being carried out by certain unscrupulous characters. If you’ve missed two or three monthly payments, your lender would file a notice of default with the county recorder's office. These scam artists read the notices, zero in on their victims and then trick them into signing over title to their homes. Latimes.com reports:

While still considered low, indications are that the nation's foreclosure rate is on the rise, meaning the pool of potential victims is growing. Overall, the foreclosure rate in the Los Angeles region has doubled since October, according to RealtyTrac Inc., an Irvine-based company that monitors foreclosures. As of February, the rate was one foreclosure for every 1,223 households.

Read more: Foreclosure Fraud Finds a Home

Foreclosure need not be the answer

If you have used up all the equity on your home, you are probably feeling extremely lost and dejected. You have probably even thought of walking away from the whole thing and letting things take their own course. In other words, you probably think foreclosure is the only option available. Take heart. It need not be so. One of the first things you need to do is banish the thought of foreclosure from your mind.

Apart from the emotional aspect, it will also be a big financial loss to you. How? Well even if you allowed foreclosure, you would still owe your loan amount or the balance on it, in addition to the fees. So if you allow the bank to sell your house and the price it gets is not as good as you thought it should be, you are left with a huge deficit. Shns.com reports:

Whatever you decide to do, be sure you understand the long-term consequences of your actions, including the effect of your choice on your family situation. There is more than money at stake here.

Read more: Alternatives to walking away from a mortgage

Do you still have a roof over your head?

The spiraling rate, at which foreclosures are rising, is only an indication of the bad economic and social scenario that is set to hit the country. Risky borrowing practices are ensuring that homeowners across the U.S are steadily losing the roofs on their heads, and the pace is expected to accelerate. Realestate.msn.com reports:

In the last few years, many buyers took out interest-only, variable-rate loans, and in some cases put no money down to afford a house, said Frank Nothaft, chief economist with government-chartered mortgage giant Freddie Mac. He estimates one out of every three loans issued in 2005 was an adjustable rate mortgage. Now that we’ve seen 14 consecutive interest-rate increases since June 30, 2004, many of these loan rates are bumping up, increasing the size of mortgage payments.

Read more: More Americans are losing their homes

Ohio feels the pain of foreclosures

Foreclosure is never an easy thing. It wrings your emotions and your purse and leaves you high and dry. People in Ohio have been going through a roller coaster of emotions linked to foreclosures thanks to a combination of elements. Ohio.com reports:

The precursor of a sheriff's sale is foreclosure. Unfortunately for a growing number of Ohioans, the state has had the nation's worst foreclosure rate since late 2004.

Read more: Losing our homes

Minorities face troublesome times as foreclosures rise

The last decade has been a good time for the housing industry, the mortgage loan industry and for people belonging to the lower economic strata of society. The housing boom during this period helped a large number of people take homes, which they otherwise may not have been able to afford.

And the fact that minority home ownership rates rose above 50 percent for the first time in 2004 is a laudable fact. But before we go into a back-patting mode, let us look at the deeper and murkier part of this entire story. Behind this success lies a disturbing trend. In the past few years areas with large poor and minority populations in places like Cleveland, Chicago, Philadelphia and Atlanta have experienced a sharp rise in foreclosures. In some cases, these have more than doubled, according to an analysis by The New York Times and researchers.

And this is not going to end anytime now. According to experts, this is only the first wave of financial distress and there is more to come. And the culprit in all this is the subprime mortgage, which initially seemed like a godsend and has now become a nightmare for the minorities.

Freddie Mac extends foreclosure hiatus

National mortgage company Freddie Mac recently announced that it was extending its suspension of foreclosures until May 31 in 21 parishes and counties in Louisiana, Mississippi, Alabama and Texas – the states that suffered the most from hurricanes Katrina and Rita. Freddie Mac also plans to lift the moratorium on foreclosures in areas that experienced the least damage. 2theadvocate.com reports:

Freddie Mac, however, is strongly encouraging servicers to extend mortgage relief to borrowers with Freddie Mac loans on a case-by-case basis regardless of zone. Freddie Mac authorizes servicers to provide a wide range of mortgage relief to storm victims, including forbearance for up to one year from the date of the disaster.

Read more: Foreclosure hiatus extended in areas

Home-loan fraud under the scanner in Ohio

If you live in Ohio, you must dread having to get a mortgage loan. People in Ohio can now breathe a sigh of relief. For long the predatory lending tactics and high foreclosure rates of mortgage loan companies have plagued them. Now, help seems at hand. Ohio seems to be taking its bid to crack down on these two problems quite seriously. Republican state senators recently unveiled a compromise bill. This proposed bill plans to expand the Consumer Sales Practices Act to cover most mortgage brokers and loan officers.

The changes proposed in the bill could give the Ohio attorney general's office authority to prosecute offenders. This will overcome the problems that the Department of Commerce faces due to weaker regulations. News.enquirer.com reports:

Ohio's nearly 3.2 percent foreclosure rate at the end of third-quarter 2005 is the nation's highest, according to the Mortgage Bankers Association. The national average was just under 1 percent.

Read more: Ohio bill targets home-loan fraud

Check out this site to avoid foreclosure

For those of you who are facing the scary prospect of foreclosure, help may be at hand: in the form of a website! StopForeclosureNow.com is a new, free Internet resource guide that attempts to help homeowners avoid the foreclosure of their homes. Powerhomebiz.com reports:

"What was worse there were unscrupulous investors and lenders out there that took advantage of them and literally stole their home from them. If these unfortunate people knew the rules, and knew their options, they could have avoided this whole situation entirely. That's why I created this site, " said Bob Gatchel the founder of this site.

Read more: New Website Shows Homeowners How to Avoid Foreclosure

What you can do to avoid foreclosure

While foreclosure is not an imminent danger in Coachella Valley, there are still a few things that residents can do to tackle potential interest rate hikes. One of the best options is refinancing; owners holding ARMs will have the freedom to refinance into fixed-rate programs and get better terms. Thedesertsun.com reports:

Don't sell on a dip. A local drop in overall sales prices is not yet on the horizon, but if one happens, don't sell until prices recover. Have financial reserves on hand in advance to ride out any tough times. If taking out equity on a home, do so while values are still rising - but beware of spending against equity and creating more debt.

Read more: Foreclosure trend may mask trouble

Foreclosure filings sharply increase

Massachusetts saw a rise of 34 percent in foreclosure filings last year as compared to the previous year. And the worst part is that many first-time homeowners also had to undergo this traumatizing experience.

For those interested in figures, the number of foreclosure filings through November was nearly 10,500. These figures are from the website ForeClosuresMass.com. The site states that the number of foreclosure filings in Essex County rose by 49, and other counties like Suffolk, Plymouth, and Bristol saw filings rise by more than 42 percent.

So, what is the reason for this sudden increase? According to the Office of Federal Housing Enterprise Oversight, one important reason is the sharp rise in prices of real estate. In some places, prices have risen by $100,000 in the past five years.