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SMALL BUSINESS
Foreclosures dip 3 pct. in October from September
By J.W. ELPHINSTONE
, AP
NEW YORK -The number of homeowners on the brink of losing their homes dipped in October, the third straight monthly decline, as foreclosure prevention programs helped more borrowers.
But foreclosure filings are still up 19 percent from a year ago, RealtyTrac Inc. said Thursday, and rising job losses continue to threaten the stabilizing trend.
More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee's sale. That's down 3 percent from September.
Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
New state programs, like one launched in Nevada in July, that require mediation before banks can seize a property have helped stem foreclosure activity, said Rick Sharga, senior vice president at RealtyTrac.
Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan modification program, he said.
"That's the reason there's been a buildup of homes that are seriously delinquent but not foreclosed," he said.
Despite Nevada's legislative efforts to slow foreclosures, the state still clocked in the nation's highest foreclosure rate for the 34th month in a row, followed by California, Florida, Arizona and Idaho. Rounding out the top 10 were Illinois, Michigan, Georgia, Maryland and Utah.
Among cities, Las Vegas had the highest rate, the report showed. One in 68 homes there received a foreclosure filing in October, more than five times the national average. Seven of the top ten metros were in California, led by Vallejo and Modesto at No. 2 and 3.
After three years of declines, home prices reversed course in June and have been rapidly climbing month-over-month. This will rebuild home equity and reduce the number of borrowers that owe more than their homes are worth.
Still, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration's loan modification plan.
The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent. The Treasury Department expects to release updated data later this month.
Congress last week also extended and expanded a key federal tax credit for homebuyers that has been credited for boosting home sales recently.
Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
"Anything that stimulates buying activity," Sharga said, "will go a long way to mediate the foreclosure problem."
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2009-11-12 06:40:00
COMMENTS ( 45 )
YOU gave our jobs and our nation's wealth away by buying far too many Imported products. YOU cannot possibly expect there to be jobs in the USA when YOU spend all of YOUR money on buying Imported products. The only way to create jobs, I repeat the ONLY WAY to create jobs in the USA is to buy MORE American made products and less Imported products. Your choice: 1) Become a Loyal and Patriotic American and buy more Made in the USA products. or 2) Keep buying Imported products and betray your nation and help Osama bin Laden to destroy it. Remember: Osama bin Laden said "He would destroy our economy" and when you buy Imported products YOU are foolishly helping bin Laden destroy the USA economy.
Its time the unemployed people get some help keeping their homes. They have programs out to help people with modifications and refi's but NOTHING to help the unemployed! We the unemployed did not ask to lose our jobs so give us a chance to save OUR HOMES!!!
BACKGROUND
Mortgage-backed securities (MBSs) are simply shares of a home loan sold to investors. They work like this: A bank lends a borrower the money to buy a house and collects monthly payments on the loan. This loan and a number of others -- perhaps hundreds -- are sold to a larger bank that packages the loans together into a mortgage-backed security. The larger bank then issues shares of this security, called tranches (French for "slices"), to investors who buy them and ultimately collect the dividends in the form of the monthly mortgage payments. These tranches can be further repackaged and sold again as other securities, called collateralized debt obligations (CDOs). Home loans in 2008 were so divided and spread across the financial spectrum, it was entirely possible a given homeowner could unwittingly own shares in his or her own mortgage.
Eventually, the most desirable, qualified customers dried up; they all had homes. So banks turned to customers they'd traditionally shunned -- subprime borrowers. These are borrowers with low credit ratings who pose a high risk of defaulting on their loan. But lenders of all stripes bent over backwards in the early 2000s to get this type of borrower into homes. The no-document loan was created, a type of loan for which the lender didn't ask for any information and the borrower didn't offer it. People who may have been unemployed as far as the lender knew received loans for hundreds of thousands of dollars. Why?
One answer is that, with the introduction of MBSs, lenders no longer assumed the risk of a loan default. They simply issued the loan and promptly sold it to others who ultimately took the risk if payments stopped. And since MBSs created early on were based on mortgages granted to the more dependable prime borrowers, the securities performed well. They performed so well that investors clamored for more. In response, lenders loosened their restrictions for mortgage applicants and borrowed heavily to create cash flow for loans in order to create more mortgages. Without mortgages, after all, there are no mortgage-backed securities.
THE QUESTION
As mortgages were packaged/bundled into mortgage back securities (MBS) and sold to investors and since these MBSs were bought by investors, with some mortgages being split and owned by several institutions or people (tranches), how can the homeowner/borrower know who actually owns their mortgage? If the homeowner /borrower does not know who actually owns their mortgage, then how does the foreclosure court know who actually owns the mortgage and CAN actually proceed with the foreclosure?
The real estate attorneys representing these possible foreclosed homeowners should request that the foreclosing institution show that they ACTUALLY own the mortgage and can bring foreclosure action to court and are not just the mortgage servicer.