Housing Starts Post Unexpected Increase

Lately, there have been great signs in the news about a slow turn around in the home market. The latest out this morning that home construction increased unexpectedly in April and showed surprising vigor - something we have not seen in the past two years. It's the biggest increase in home construction - a great indicator.

Building permits rose as well and signals optimism for the anything related to housing. Exact figures show that housing starts increased 8.2% to a seasonally adjusted 1.032 million annual rate.

But we find that these figures are from a higher by a surge in apartment building construction, the Commerce Department said. If so, maybe this is the whiplash effect from so many foreclosures. People have to live somewhere and apartment construction is going to accommodate them.

Starts plunged by a revised 13.8% in March to 954,000. Economists expected April starts to drop by 1.4% to a 934,000-unit annual rate - but they didn't and we are happy for any news of this sort.

Government Help with Foreclosures

We all know foreclosures are devastating and costly both to property owners and lenders. And I believe that's why government should do all it can to encourage voluntary loan adjustments. Some local governments want to ensure that lending rules are broadly enforced, so they are engaging in a program with other federal and state agencies to conduct consumer compliance reviews of nondepository lenders and mortgage brokers. Now, these reviews are targeting underwriting standards, risk-management strategies, and compliance with consumer protection laws and regulations. Lenders have an obligation to ensure that their standards accurately measure whether borrowers can afford their mortgage. But read on.

The steep rise in foreclosures and subprime lenders filing for bankruptcy has had a negative impact on the once popular subprime loan. As the subprime loans are disappearing, the old FHA loan is now making a comeback. But dishonest or "predatory" lenders do exist and engage in lending practices that increase the chances that a borrower will lose a home to foreclosure. Beware especially of those who make high risk second mortgages. The savings you earn, whether you're buying bank foreclosures or lender REO homes, also represent a larger margin for profit if you're a foreclosure investor! Therefore buying a bank foreclosure means not only great initial savings, but bigger chances for profit on sales in the future!

Ben Bernanke has suggested for lenders to give a break to distressed borrowers by lowering of some portion of the loan amount. A lower remaining principal will permit more manageable monthly mortgage payments for borrowers. Under Zandi's plan, lenders would compete at auction to sell their mortgages to the government at a discount. HUD often agrees to back loans given by private lenders. When the borrowers default on these loans, the difference is paid by the government and these houses become government foreclosures.

The federal government [will] be repaid on the zero-interest, nonrecourse loans. Loans for homeownership properties would need to be repaid within two years, while loans used to create rental housing would have a maximum loan period of five years. Contributing factors such as temporary job loss, medical illness or injury, marital difficulties, forces of nature, unforeseen repairs, or even a death in the family can cause unfortunate financial hardship. Fortunately, there is help available for you to avoid foreclosure and to save your home. Lawmakers in Michigan, for example, set up two loan funds and a statewide education campaign. Maryland lawmakers extended the foreclosure process from 15 to 150 days, giving homeowners more time to work through their financial difficulties.

April foreclosures rose sharply in Denton County than any of the other 10 North Texas counties. Interesting, how the middle class (and as we have learned recently, lower class people that live with their middle class parents) complain about how the lower class get services to help them out. Keep in mind that many people (despite how much they make, black, white, Asian, etc) are one paycheck away from being on welfare. The growing market for foreclosed homes is creating some incredible deals, even if you've never considered buying foreclosed home before. Locate houses from the convenience of your own home computer with a nation-wide database of foreclosed homes and listings complete with addresses, prices, full contact information and photos.

But work with a real estate agent, broker or servicing representative to submit an offer or bid. People will lose their homes, homelessness will increase and a drag on social services will ensue. We as a society have become reckless beyond comprehension.

Getting Someone to Take over Payments on Foreclosure

The Notice of Default usually details what you need to do in order to bring your loan current the amount of principal and interest and late fees you will now owe. As usual, people are a day late and dollar short. Late charges, fees, and penalties are tacked on to the monthly payment already past due. During this phase a lawyer or official trustee will take over the case and should contact the homeowner to resolve the problem and get the payments caught up and back on track.

The subprime mortgage crisis has been on the tip of everyone's tongue lately, and the housing market has cooled. Rather than being discouraged by this, smart investors realize that this is the time for deals to be had. Some lenders will allow you to keep your original loan if you can make up the missing payments plus any late fees and legal charges. Others will insist you refinance with another lender. If you do find that you are late in making your mortgage payments then you need to be able to stand up for your rights when it comes to dealing with your mortgage company. In many situations a foreclosure could have been avoiding but the person on the receiving end decided to go into hiding, not pick up the phone, ignore the letters coming in and so on.

If a borrower is later than 16 days with the mortgage payment from the day it is due, the lender is required to send the borrower a notice in writing. The notice must be mailed by the 20th day and clearly state how much the borrower owes (to include late fees). Under no circumstances should you attempt collection on a late payment yourself. Compliance with all state and federal laws while attempting to collect a delinquent loan is not trivial. Once you are in trouble, however, it is probably too late to invoke this solution.

If you ever want to buy the home back, the opportunist will only sell it back at an inflated price. Many times we have had homeowners call days before the auction saying their financing did not go through, and then it's too late! Otherwise, there is a very real possibility that they might move out too soon or find out about the eviction too late. If they move out too soon, they will lose valuable time to save money for an emergency fund and repair your credit.