The article, Florida’s High-Speed Answer to a Foreclosure Mess, discusses Florida’s new foreclosures-only courts that have been set up to reduce the state’s backlog of foreclosures. It is arguable whether these courts are constitutional and whether they violate homeowners’ rights to due process. The article also discusses how some of Florida’s foreclosure law firms operate.
Program to Prevent Foreclosures Falls Short – An article about the lack of success of the HAMP program.
Courts Offer Help to Those Facing Foreclosure – A new program in Lycoming County, Pennsylvania. Whenever a private owner-occupied mortgage foreclosure is filed, those in default will be given an opportunity to request a court conference shortly after the complaint is filed.
Advice for the Reluctant Landlord – In my previous post, Options for Homeowners in Underwater Mortgages: Saving Your House, I discussed the option of renting out your home when you are unable to sell it. This CNN article contains good advice for prospective landlords.
Fannie Mae Offers Borrowers Hardship Relief – Fannie Mae offers more flexibility by easing its policies for those facing “unique hardships.”
Foreclosed on – By the U.S. – The Fed helped bail out Bear Stearns, and now it has to deal with delinquent borrowers.
Doubling Down on Housing – Some homeowners with underwater mortgages are choosing to put more money into their homes, by paying down their negative equity and refinancing.
This past Saturday, my husband and I attended the Help for Homeowners Community Event that I referred to in this post. The event took place at the Minneapolis Hilton. We got there at around 10 a.m., and a lot of people were there already. When I saw how many people were there, I couldn’t help but feel sad. I even felt myself choke up, because I was thinking about the emotions that everyone must be going through as they worried about losing their homes.
As we entered the event, volunteers wearing blue shirts guided people along. Mortgage lenders had individual tables set up. Fannie Mae and Freddie Mac also had tables. Participants went to their mortgage lender’s table and got a ticket. Their tickets had the mortgage lender’s name and a number on them. From there, the participants were led into another room, where they sat and listened to different speakers talking about loan modifications and FHA loans. Volunteers would come into the room and call out the names of mortgage lenders and a number, and then the homeowners with the corresponding tickets were brought into another room; a room full of tables. In that room, homeowners sat at a table, face-to-face, with someone from their mortgage bank.
Many homeowners who have been trying to obtain assistance under the Making Home Affordable plan have had difficulty reaching people at their banks over the phone. This event gave homeowners an opportunity to talk face-to-face with a real person from their bank. This was a great opportunity for many people. I hope that, after this event, the mortgage banks are able to help the people they met with so that their homes can be saved.
I agree wholeheartedly with Mr. Levitin’s post. I’d also like to add that the current mess that we have found ourselves in is an anomaly. It wasn’t normal for housing prices to increase at such a high rate, and it’s not normal for housing prices to drop at the rates at which they have currently dropped. Exotic mortgages and zero-down loans, and the idea of starter homes and getting into the market before you were “priced out forever” all contributed to this mess. For the people who bought into those ideas and now find themselves in financial distress due to job loss or health problems or any other “life happens” reasons, I am thankful that some mortgages are non-recourse. When someone is worried about “hanging on” and just making it through one of the worst economic times our country has seen, I am glad that people who have non-recourse mortgages don’t have to worry about one more stress – the stress of a deficiency judgment.
It’s difficult to blame Fannie Mae for being nervous about people walking away from their mortgages when strategic default is being regularly reported on in the news:
I think that it will be difficult for Fannie Mae to decide whether someone strategically defaulted. Many people have applied for the HAMP program, only to end up in foreclosure. Foreclosures are, unfortunately, rising. See More rural, suburban Minnesotans threatened with foreclosure. See also Foreclosures Are Rising.
Fannie Mae’s threats might scare a few people from walking away from their underwater mortgages, but its threats alone will not be enough to fix our nation’s housing mess. Fannie Mae’s energy could be better spent on making sure servicers are following the Making Home Affordable program guidelines in a timely manner.
The Minnesota Home Ownership Center recently blogged about how the “next wave of foreclosures is rapidly approaching Minnesota.” It predicted that this wave of foreclosures will have a large impact on the outer-ring suburbs of the Twin Cities.
Mortgage delinquencies are currently at historic highs. According to a recent report from Lender Processing Services more than 7.4 million home loans nationwide are in some stage of delinquency or foreclosure, with another 1 million properties either bank-owned or sold out of foreclosure.
If the blog entry on the Minnesota Home Ownership Center is correct, the current historically high mortgage delinquency rate will likely only become higher and “more historical.”
The Dakota County Community Development Agency runs the Mortgage Foreclosure Prevention Program for Dakota County residents. If you are a homeowner in Dakota County who may be facing foreclosure, or if you are already in foreclosure, click here for more information about the Mortgage Foreclosure Prevention Program.
Minnesota homeowners living outside of Dakota County can contact the Minnesota Home Ownership Center for a referral to a housing counseling agency in their area.
The New York Times recently posted this article about CitiMortgage testing out a deed in lieu of foreclosure program in New Jersey, Texas, Florida, Illinois, Michigan, and Ohio. According to the article, this new program “is similar to one announced last fall by Fannie Mae, the government-controlled mortgage company. Fannie is allowing homeowners to return the deed to their properties, then rent them back at market rates.”
Although the program is not yet available in Minnesota, I am glad to see that more options are being made available to distressed homeowners.