Bush Proposal For Mortgage Relief

"The Bush news on initiatives to help out people with troubled mortgages is giving a boost to the market," one trader said. While not seen as a cure all, bond analysts took the move as a sign the Bush administration was at least offering a bit of a pain killer to the recent crisis, and bond prices plunged. "It is all about the Bush administration proposal, people are saying this is about administration bailout potential," said David Ader, head of government bond strategy at RBS Greenwich Capital.

President George Bush will announce measures to ease the mortgage crisis here. Bush's statement later this morning that is expected to outline new initiatives to provide relief to consumers holding risky mortgage loans, traders said. Bush will propose reforms aimed at helping homeowners with subprime mortgages avoid default, his first public step to address a crisis that has created turmoil in financial markets around the world, a senior administration official said.

Treasury debt prices fell Friday hours before the the expected unveiling of a White House mortgage proposal. The weakened allure of bonds as a safe haven from the credit crisis was spawned by subprime home loans. Converting the mortgage interest deduction to a tax credit equal to 15 percent of interest paid on mortgages up to the cap. President Bush today said a tad more about his position on the current turmoil in the housing and credit markets, reiterating his position that he does not support a government-financed "bail-out" of homeowners facing foreclosure. So President Bush will direct the FHA “stone age mentality” to ease up on homeowners with “spotty credit records”.

News of the Bush proposal, which came late Thursday, overwhelmed the focus on a speech from Federal Reserve Chairman Ben Bernanke today in which he is scheduled to talk about housing and monetary policy. Under its plan, the Federal Housing Administration mortgage insurance program will be changed to allow more people to refinance with FHA insurance if they fall behind on mortgages, according to the reports. The housing market and foreclosure doom on the horizon has turned political quite quickly. Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump. Bush would call for the Federal Housing Administration to raise the ceilings on what it can charge for federal mortgage insurance, a move that they said would enable an additional 80,000 homeowners with spotty credit records to take advantage of the program, beyond the 160,000 likely to use it this year and next.

Foreclosures in Colorado

Foreclosure filings in Colorado are higher over the past month and year. Foreclosure filings are the first step lenders must take on the path to removing a borrower from a home for missing mortgage payments. In recent interviews, local real estate, mortgage, and housing experts said the increasing foreclosure filings are the result of a confluence of factors, from a boom in risky, subprime loans issued over the past few years to the recently slumping housing market and increased utility prices.

Foreclosure Market Report, which shows a total of 925,986 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 573,397 properties nationwide during the first six months of the year, up more than 30 percent from the previous six-month period and up more than 55 percent from the first six months of 2006. Foreclosure filings do not always result in a person losing a house at auction. Foreclosures rose sharply in the first quarter of the year as housing prices stalled and homeowners had an increasingly difficult time making their mortgage payments.

The argument against mortgage brokers is that they intentionally steered borrowers towards loans they couldn't afford. Mortgage lenders sent 2,148 notices of default to property owners in the first quarter, up from 1,607 in the fourth quarter, and 1,307 in the first quarter of 2005, according to DataQuick. Many foreclosures are related to homeowners with adjustable-rate mortgages who are beginning to realize what hit them, he said. Owners can stop foreclosures in several ways, including selling their houses to pay off the mortgage, refinancing, filing for bankruptcy or trying to make back payments.

Homeowners often sell or come up with money to save their houses, sometimes at the last minute. Homeowners are being put in a squeeze and will have greater difficulty selling their way out of trouble through conventional channels. Homeowners who find themselves in danger of missing a payment should contact their lender to let them know and work out a plan, if possible. The Fair Housing Center's response to this challenge has been to start a predatory lending remediation program, Restoring the Dream, to help homeowners retain their homes and reduce their mortgage payments. Consistent with the growing number of mortgage defaults nationwide, a mix of rising interest rates and a softening housing market, along with the collapse of the subprime mortgage market, have forced many more homeowners into foreclosure.

Subprime lenders tend to be less regulated than their prime counterparts. Subprime and other “exotic” loans, as they are commonly called, are often attractive because they require little money down and can help people purchase a house for which they might not otherwise qualify. Subprime mortgage providers are also tightening their standards, eliminating refinancing options for troubled homeowners. Subprime loans are made to people with less-than-attractive credit. Another problem is subprime loans, those that require little money down but can come with high interest rates.

Foreclosure filings are up 35 percent nationwide since a year ago, according to RealtyTrac. RealtyTrac, an online marketplace for foreclosure properties, says that nationwide foreclosure filings are up 42 percent from 2005, with the highest rates posted by Colorado, Georgia and Nevada.

Number of Foreclosures in July

Foreclosures rose 93 percent over July of 2006, and rose 9 percent from foreclosures in June 2007. There were 179,599 foreclosures reported in July - that's up 92,845 from the same time in 2006. And there were 164,644 foreclosures in June 2007. This is from RealtyTrac, Inc. an Irvine California based company. We would provide a link, but their site launches a bot for ErrorProtector spyware. Use this link to delete:

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The national figures are one foreclosure for every 693 households in July 2007. Most states, 43 of them, had year by year increases in foreclosures. Five states, Georgia, Ohio, Michigan, California, and Florida, accounted for more than half of the filings. Filings are default notices, bank repossessions, and auction sales.

Nevada holds the record for the highest foreclosure rate with one for every 199 homes - more than three times the national average. 5,116 filings during the month.