Free Foreclosure Articles And Foreclosure Information

Probably you are tired of listening to a lot of people saying, “We can stop foreclosures!” They offer endless promises to homeowners who can no longer afford to pay the mortgage, thus making them at risk in foreclosure.

Federal Trade Commission has created a new arrangement which gives warning to companies that promise to stop foreclosures: If they get cash from a consumer right away and made a vow to save the property, make sure to have it done, or they might be convicted of operating a scam company which breaks the federal rules for their personal gain.

FTC filed against Mortgage Foreclosure Solutions Inc., a company located in Florida, for running a plan of offering foreclosure assistance nationwide via 6 websites.

Consumers paid thousands of dollars to the company, but their properties still went into foreclosure. Some fixed the problem on their own without getting any help from the company.

FTC Assistant Regional Director Cindy Liebes said that a lot of schemes are now increasing nationwide due to unemployment, property estate flop and recession. Those companies would victimize scared and vulnerable homeowners.

They do not have any special skills to make arrangements with the bank. They will just take the homeowners’ money and basically do nothing at all.

FTC gathered a number of “red flag” signs for the homeowners to know whether or not the company they are dealing with is a scam.

• Giving guarantees that they can stop foreclosure regardless of the situation.
• Demands for a payment before doing the services offered. There are states that do not allow foreclosure saving companies to collect money before doing anything.
• Telling the homeowners not to call their lenders or banks and just leave everything to the company instead.
• Requiring homeowners to send mortgage payments to the company address and not to the bank or lender.
• Companies asking homeowners to give them their property deed or title.

Want to avoid more problems in foreclosure properties? Be aware of these signs.

Last year ended with a 17 percent increase to 303,410 in the number of homes repossessed for December, according to RealtyTrac, which collects and compiles foreclosure data from over 2,200 counties in the United States.

The sudden increase in numbers is attributed to the decreasing effect of state laws expected to temporarily prevent the rise in the number of abandoned homes by extending the notification period for borrowers.

However, foreclosure activities declined by 4 percent during the last quarter of the year despite the increase in the number of repossessed homes and the worsening state of the housing market.

RealtyTrac Chief Executive Officer James J. Saccacio said that programs designed to prevent the increase in the number of distressed properties failed to slow down the foreclosure crisis.

He adds that laws in several states, such as California, Maryland and Massachusetts, appear to have only delayed the inevitable outcome for thousands of borrowers.

The goal of the prevention programs is to buy time. Increasing foreclosures means falling home prices, and decreasing home prices increases bank repossessions.

Inside Mortgage Finance publisher Guy Cecala believes that delaying the process of repossessing a home can be costly for lenders, investors and servicers. He adds that lenders cannot handle all mortgage servicing cases because of their problem with staffing levels.

Meanwhile, the increased in foreclosures due to state laws was heightened by moratoriums started in 2008 by government-sponsored enterprises, Federal National Mortgage Association and Federal Home Loan Mortgage Corp. and other major lenders, such as Citigroup and JPMorgan Chase.

These moratoriums were temporary and ended last holiday season, indicating that January’s data will probably be worse than the previous month’s figures.

On the other hand, the federal government still continues its own programs to help stop the housing crisis. Already, the incoming administration of President-elect Barack Obama has pledged to use a portion of the remaining second half of the Troubled Asset Relief Program money to help homeowners at risk of losing their properties.

The decline in property prices is chiefly attributed to the rise in foreclosure numbers. However, with the change in administration (and some relief expected), this is increasingly being considered to be a good time to buy within foreclosures.

Prior to being foreclosed upon, a home’s owner gets some time by the lender, during which he/she either fixes the default or tries to sell the home. If the home’s owner fails to do either of these within the given time, the house is foreclosed upon, and as part of the foreclosure proceedings, put up to be sold at an auction.

Homes which fail to sell at these foreclosure auctions are then transferred to the banks/lenders that hold the primary mortgages on these homes. Once this happens, the home is referred to as a ‘Real Estate Owned’ home. Commonly known as REO homes, these lender/bank owned homes often end up selling at discounted prices.

With some interest being generated in the region’s residential real estate market, there is every possibility that the house you like also has other prospective buyers interested in it. This can especially be seen in cases where the asking price of homes is lesser than their estimated market value.

Banks are known to receive multiple offers for homes whose condition is good, and the asking price is low. In scenarios such as this, banks can, either, chose to honor the best initially received offer, or, alternatively get the top two or three offer makers to resubmit their offers.

Different banks/lenders employ different means in selling these homes. While some take care of this task on their own, some others are known to employ the services of real estate professional to do so. It you intend to buy a bank foreclosure, it would be best if you explore all available options.

During the first days of January, U.S. mortgage firm Fannie Mae and its sister company Freddie Mac extended to January 31 the suspension of foreclosure and eviction proceedings they implemented in December 2008. They are hoping that the extension would give more time for mortgage lenders and borrowers to work out a loan modification agreement that would be helpful to both parties.

Such hope was also in the minds of state officials in California, Massachusetts, Maryland and other states when they launched their own foreclosure suspension initiatives in December 2008.

But according to online housing research service Housing Wire, the suspension initiatives did not achieve their noble aims. What they accomplished was just to delay the time the homeowners experienced the full realities of foreclosure and eviction.

At the end of December 2008, California, whose Senate introduced foreclosure suspension Bill 1137 in 2008, was back to its high foreclosure level after experiencing a big drop when it suspended foreclosures in November. Notices of default jumped from 21,557 in November to 42,421 in December, an increase of nearly 25 percent over default notices in December 2007.

Sean O’Toole, head of California foreclosure tracking company ForeclosureRadar, said the default figures clearly showed that California’s Bill 1137 failed to make a dent on the foreclosure problem, although it had noble intentions. He said the bill failed to consider the reality that the average negative equity of home loans in the state has grown to $180,000. He reported that the average price of a foreclosed home sold in December was $283,624, with an average loan balance of $464,270. He also said that 249,940 foreclosure properties were sold at auctions in 2008, valued at a total of $107.8 billion.

After most foreclosure prevention efforts in 2008 failed, most homeowners are now pinning their hopes on Barack Obama who promised to help them during his first weeks as president.

The increasing number of foreclosed homes is a major contributor on the current economic turmoil in Arizona and the rest of the country, according to state Attorney General Terry Goddard.

In his open letter, Goddard said that it is difficult to determine the extent of the Arizona foreclosures problem. He added that the wave of foreclosures has spread to the rest of the country.

According to the attorney general, an estimated 4.6 million homeowners or one in every 10 households in the country, are delinquent in their mortgage payments or in some form of foreclosure proceedings. He also pointed out that a significant number of Americans have filed for bankruptcy.

Goddard noted that Arizona foreclosure crisis is one of the biggest in the country.

Meanwhile, Goddard cited the ineffectiveness of mortgage servicers’ voluntary efforts to help homeowners who are at risk of losing their properties. He said that securitizing of mortgages has complicated efforts to help struggling homeowners. He added that this complication has made negotiated modifications difficult to pursue.

He believes that what is needed to address the foreclosure crisis is a home loan modification program that will be fair to both mortgage holders and homeowners.

He calls on lawmakers to overhaul the U.S. Bankruptcy Code. The law will permit federal judges to improve the terms of mortgage loans provided to homeowners.

Goddard said that revising the law would give authority to judges to reduce the loan principal to align it with the current market value of a property, reduce the interest rate of the mortgage loan or extend the terms of the mortgage loan.

Furthermore, Goddard believes that in loan modifications, lenders would stand to get lower payments, but more than the amount they would likely receive if a property was foreclosed and remain vacant for a long time.

According to Goddard, foreclosure prevention is the only way to stabilize the housing market and help the economy back on its feet.

The answer to the question is yes but not always. Due to the housing crisis, there have been many stories of investors making a healthy profit out of buying distressed properties at bargain prices and reselling these houses at higher prices. Landlords are also lowering rents to attract more tenants.

However, if you are a homebuyer or a tenant, the best investment will be still be in neighborhoods where you will be assured of gains which you and your family will benefit from for a long time. This may not always mean a bargain foreclosed home, but a secure housing investment which would not compromise your safety.

Homeowners and tenants need to assess the home’s risk before moving in. Despite low costs, the ultimate gauge would still be to live in a stable and safe community with decent schools and neighbors, and adequate services.

The best areas for this are those that experience less foreclosures and with residents of above-average income. Before one makes that buy or signs that lease he should take into account the chances of his preferred property’s value depreciating. A few things to take into account would be:

1. The number of homes in the risk of foreclosure
2. The number of homes which have actually been foreclosed
3. The average home price and whether it is increasing or decreasing

According to economic experts, the best places which might have better growth and value would be in the lower-priced areas – San Antonio, Austin and Dallas in Texas; Jackson, Mississippi and Pittsburgh are examples of these. Some analysts also say that there is less risk to invest in Albuquerque; Bridgeport-Stamford, Hartford and New Haven in Connecticut; Bethesda-Gaithersburg, Maryland; El Paso, Texas; Edison, New Jersey; Honolulu; Boston, Essex County and Worcester, Massachusetts; New York/Nassau-Suffolk county; and Seattle. Those more likely to be in a housing slump and experience more foreclosure problems are Las Vegas, Phoenix and South Florida.