Current Foreclosure News

Obama unveils 275 billion dollar housing plan

Posted 2009-02-18 by AFP

Obama unveils 275 billion dollar housing plan

This article is courtesy of Google.com and can be found on http://www.google.com/hostednews/afp/article/ALeqM5gMepV06n3gwNOIBfaR6Rhga_tPRQ

PHOENIX, Arizona (AFP) — President Barack Obama targeted the housing crisis at the root of the US economic meltdown, with a program which could cost 275 billion dollars and reach nine million homeowners.

The strategy includes 75 billion dollars designed as an incentive for lenders to reduce interest rates to prevent at-risk mortgage debtors joining the millions who have already fallen victim to foreclosures.

The government will also put up an additional 200 billion dollars to bolster efforts by federal lenders Freddie Mac and Fannie Mae to offer affordable mortgages and bring stability to the housing market.

Obama opened the new front in the broad battle against the economic crisis a day after signing a huge, 787-billion-dollar stimulus plan into law, and as he simultaneously attempts to restructure the debilitated US auto industry.

"All of us are paying a price for this home mortgage crisis and all of us will pay an even steeper price if we allow this crisis to continue to deepen," Obama said as he unveiled the plan in Arizona, one of the states worst hit by the crisis.

"When the housing market collapsed, so did the availability of credit on which our economy depends.

"We will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure," Obama said.

Treasury officials said the plan could make affordable one-and-a-half trillion dollars in mortgage debt and deal with a large proportion of the six million foreclosures expected over the next four years.

The plan includes incentives for lenders to help debtors who cannot make monthly payments but also cannot sell their homes due to negative equity, to lower mortgage payments to no more than 31 percent of their income.

The plan will see the Treasury Department double its financial support to troubled mortgage finance giants Fannie Mae and Freddie Mac, to 200 billion dollars each, in an effort to stabilize the real estate sector.

A 75-billion-dollar initiative will target those who cannot afford to pay their mortgages but who have seen the price of their properties plunge so they cannot sell them and move into cheaper accommodation.

The initiative also aims to help families who put money down on homes and met their regular payments, yet cannot take advantage of refinancing made attractive by low mortgage rates because the value of their homes have sharply dropped.

US stock markets shrugged off the new housing plan, a day after the Dow Jones Industrial Average fell 3.79 percent on pessimism that the stimulus plan and new housing strategy would lead the economy out of recession.

On Wednesday, the Dow closed up 3.03 points (0.04 percent) to 7,555.63. The tech-heavy Nasdaq was down 2.69 points (0.18 percent) to 1,467.97.

Treasury Secretary Timothy Geithner told reporters here that the plan would not only awake the slumbering housing market, but would also help reignite the broader economy.

"By helping keep mortgage rates down, and helping reduce monthly payments, you are putting money in the hands of Americans, in that case it acts like stimulus," he said.

His comments came as Federal Reserve chairman Ben Bernanke said the sums being pumped into the economy may hold moderate inflationary risks in the long term.

"At some point, when credit markets and the economy have begun to recover, the Federal Reserve will have to moderate growth in the money supply and begin to raise the federal funds rate ... unwind some of its credit-easing programs and allow its balance sheet to shrink," he said in a speech to the National Press Club in Washington.

But for now, policy makers are still preoccupied with short-term fire-fighting.

Officials said the plan would not benefit irresponsible homeowners who took out bigger loans than they can afford, or banks that took dangerous risks or speculators who helped build the housing bubble.

"Let us be clear, housing has been a significant part of initiating the economic slide we are in and will be a key part of getting us out," said Housing and Urban Development Secretary Shaun Donovan.

"This is a smart targeted investment which can reach and help to make more affordable more than one-and-half-trillion dollars of mortgage debt."

"It is of a scale that can have a real impact."

The program, like other aspects of Obama's attempts to clean up the debt-laden finance industry, relies on lenders to thaw out credit.

HOPE For Homeowners Program

Posted 2008-10-03 by Dept of Housing and Urban Development

BUSH ADMINISTRATION LAUNCHES "HOPE FOR HOMEOWNERS" PROGRAM TO HELP MORE STRUGGLING FAMILIES KEEP THEIR HOMES
Detailed Program Eligibility Requirements Announced

This article is courtesy of the Dept. of Housing and Urban Development and can be found on

http://www.hud.gov/news/release.cfm?content=pr08-150.cfm

WASHINGTON - The Bush Administration today unveiled additional mortgage assistance for homeowners at risk of foreclosure. The HOPE for Homeowners program will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD's Federal Housing Administration (FHA).

"For families struggling to keep up with their mortgage payments, this program will be another resource to refinance into a loan they can afford," said HUD Secretary Steve Preston. "FHA remains a safe and affordable alternative to the high-priced mortgage loans that threaten homeowners' ability to retain their homes. We strongly encourage borrowers to work with their lenders to determine if HOPE for Homeowners is the right program for them."

The HOPE for Homeowners program was authorized by the Economic and Housing Recovery Act of 2008. Since the President signed this vital legislation into law on July 30, 2008, the HOPE for Homeowners Board of Directors has worked diligently to develop and implement the program as directed by Congress. The Board was charged with establishing underwriting standards to ensure borrowers, after any write-down in principal, have a reasonable ability to repay their new FHA-insured mortgage.

The HOPE for Homeowners program begins today and ends September 30, 2011. The program is available only to owner occupants and will offer 30-year fixed rate mortgages - so the borrower's last payment will be the same as the first payment. In many cases, to avoid what would be an even costlier foreclosure, banks will have to write down the existing mortgage to 90 percent of the new appraised value of the home.

Borrower Eligibility

Borrowers are encouraged to contact their lender to determine eligibility, but may be eligible if, among other factors:

The home is their primary residence, and they have no ownership interest in any other residential property, such as second homes.
Their existing mortgage was originated on or before January 1, 2008, and they have made at least six payments.
They are not able to pay their existing mortgage without help.
As of March 2008, their total monthly mortgage payments due were more than 31 percent of their gross monthly income.
They certify they have not been convicted of fraud in the past 10 years, intentionally defaulted on debts, and did not knowingly or willingly provide material false information to obtain their existing mortgage(s).

How the HOPE for Homeowners program works

"HOPE for Homeowners will add to HUD's existing efforts to make FHA refinancing available to homeowners who need it most," said FHA Commissioner Brian D. Montgomery. "One year ago, FHA expanded refinancing into its FHASecure program. Since that time, we have helped more than 360,000 families keep their homes by refinancing with FHA, and we will assist a total of 500,000 families by the end of this year."

The Board expects that the primary way homeowners will participate in the program is by working with their current lender. HOPE for Homeowners will serve as another loss mitigation tool available to distressed borrowers.

HOPE for Homeowners also includes the following provisions:

The loan amount may not exceed a maximum of $550,440.
The new mortgage will be no more than 90 percent of the new appraised value including any financed Upfront Mortgage Insurance Premium.
The Upfront Mortgage Insurance Premium is 3 percent and the Annual Mortgage Insurance Premium is 1.5 percent.
The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.
The existing first mortgage must accept the proceeds of the HOPE for Homeowners loan as full settlement of all outstanding indebtedness.
Existing subordinate lenders must release their outstanding mortgage liens.
Standard FHA policy regarding closing costs applies, and they may be:
- Financed into the new loan provided the value of the mortgage (including the Upfront Mortgage Insurance Premium) does not exceed 90 percent of the new appraised value of the home.
- Paid from the borrowers' own assets.
- Paid by the servicing lender or third party (e.g., federal, state, or local program).
- Paid by the originating lender through premium pricing.
The borrower must agree to share with FHA both the equity created at the beginning of this new mortgage and any future appreciation in the value of the home.
The borrower cannot take out a second mortgage for the first five years of the loan, except under certain circumstances for emergency repairs.

The lender will disclose to the homeowner the benefits of the program including home retention, a new affordable mortgage based on the current appraised value, and 10 percent equity. The lender will also explain the prohibition against new junior liens against the property unless directly related to property maintenance, and a minimum of 50 percent equity and appreciation sharing with the Federal government.

The costs to the homeowner include the upfront and annual insurance premiums, as well as a share of the equity created by the write-down associated with the HOPE for Homeowners mortgage and any future appreciation in the value of the home. At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD's appreciation share.

If the home is sold or refinanced, the homeowner will share the equity with FHA on a sliding scale ranging from a 100 percent FHA share after the first year to a minimum of 50 percent after five years. The lien holder that previously held the highest priority will receive payment up to a proportion of its original interest, not to exceed the amount of available appreciation. This type of delayed payoff will take place until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA.

The HOPE for Homeowners Board of Directors includes HUD Secretary Steve Preston, Treasury Secretary Henry Paulson, Federal Reserve Board Chairman Ben Bernanke, and FDIC Chairman Sheila Bair. They have named the following people to serve on the board as their designees: FHA Commissioner and Chairman of the Board Brian Montgomery, Federal Reserve Board Governor Elizabeth Duke, Treasury Assistant Secretary for Economic Policy Phillip Swagel, and Federal Deposit Insurance Corporation Director Tom Curry.

Read more about HOPE for Homeowners at www.hud.gov/hopeforhomeowners.

Watch Secretary Preston's press conference

US Home Foreclosures on the rise

Posted 2008-08-16 by BBC

US home foreclosures on the rise

This article is courtesy of BBC Newsn and it could be found on http://news.bbc.co.uk/2/hi/business/7525591.stm

The number of US homes in some stage of foreclosure more than doubled between April and June from the previous year.

Figures from research firm RealtyTrac showed that one in every 171 US households was in the process of losing their home - up 121% on last year.

There was better economic news from the Commerce Department, with orders for big-ticket US manufactured items growing 0.8% in June.

But much of the bigger-than-expected rise came from big defence orders.

Meanwhile, sales of new homes fell 0.6% in June, also according to the Commerce Department.

It is the seventh fall in the figure in the past eight months.

It means that new home sales are down by 33.2% from a year ago. Negative equity

Mortgage defaults by US homeowners have surged as millions of sub-prime loans are reset at higher interest rates, and the drop in house prices has pushed more homes into negative equity.

The housing crisis is causing serious problems for the wider US economy.

Almost 740,000 US homes entered the foreclosure process in the second quarter of 2008, according to RealtyTrac.

This includes receiving a default or bank repossession notice or warning of an impending auction.

The worst hit areas were Nevada, California, Florida and Arizona, which had seen the biggest house price rises during the boom years, and the largest volume of sub-prime lending.

But RealtyTrac said most areas of the country were seeing at least some levels of foreclosure activity. Outlook

California had the most filings - 202,599 - which was up 198% from the same period a year ago.

Some help to homeowners may be available if the US Congress finally passes the housing bill, which aims to help hundreds and thousands of homeowners trapped in unaffordable mortgages.

The bill, if it became law, would allow these borrowers to refinance their mortgages with cheaper, fixed-rate mortgages backed by the government. It cleared the US House of Representatives this week and is expected to be passed by the Senate and signed by George W. Bush in the next few days.

But many analysts believe the housing market has not yet hit rock bottom, and falling house prices could put millions more at risk of foreclosure. 'Hardly thriving'

While the 0.8% growth in orders for durable goods, which are US manufactured items expected to last at least three years, was the highest since February, analysts cautioned against reading too much into it.

"With orders excluding defence falling at a 4% annualised rate in the second quarter, it is pretty clear manufacturing is hardly thriving," said Ian Shepherdson, chief US economist at High Frequency Economics.

Orders for motor vehicles and parts rose 1.8%, which was the strongest for almost a year.

But the increase was only a fraction of the big declines that have been seen in recent months.

"It says things were better than we generally expected as we look back into the second quarter but I think if you look forward into the third and fourth [quarters] the forward-looking indicators are pointing toward some weakness ahead," said Keith Hembre, chief economist at First American Funds.

The Top 10 Foreclosure States (as of June)

Posted 0000-00-00 by Luke Mullins

The Top 10 Foreclosure States (as of June)

July 10, 2008 04:45 PM ET | Luke Mullins | Permanent Link

This article is courtesy of USnews.com and it could be found on

http://www.usnews.com/blogs/the-home-front/2008/7/10/the-top-10-foreclosure-states-as-of-june.html

RealtyTrac's most recent U.S. Foreclosure Market Report found that June foreclosure filings fell 3 percent from May, but they still are up 53 percent from a year ago. All told, one in every 501 American households got a foreclosure filing last month.

From RealtyTracs press release:

"June was the second straight month with more than a quarter-million properties nationwide receiving foreclosure filings," said James J. Saccacio, chief executive officer of RealtyTrac. "Foreclosure activity slipped 3 percent lower from the previous month, but the year-over-year increase of more than 50 percent indicates we have not yet reached the top of this foreclosure cycle. Bank repossessions, or REOs, continue to increase at a much faster pace than default notices or auction notices. REOs in June were up 171 percent from a year ago, while default notices were up 38 percent and auction notices were up 22 percent over the same time period."

Which states have the highest foreclosure rates?

Nevada: One in 122 homes
California: One in 192 homes
Arizona: One in 201 homes
Florida: One in 211 homes
Michigan: One in 375 homes
Ohio: One in 382 homes
Colorado: One in 429 homes
Georgia: One in 444 homes
Indiana: One in 568 homes
Utah: One in 600 homes

Current Foreclosure News

Obama unveils 275 billion dollar housing plan

Obama unveils 275 billion dollar housing plan

HOPE For Homeowners Program

BUSH ADMINISTRATION LAUNCHES "HOPE FOR HOMEOWNERS" PROGRAM TO HELP MORE STRUGGLING FAMILIES KEEP THEIR HOMESDetailed Program Eligibility Requirements Announced

US Home Foreclosures on the rise

The Top 10 Foreclosure States (as of June)

The Top 10 Foreclosure States (as of June)

BUSH ADMINISTRATION LAUNCHES "HOPE FOR HOMEOWNERS" PROGRAM TO HELP MORE STRUGGLING FAMILIES KEEP THEIR HOMES
Detailed Program Eligibility Requirements Announced