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.

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.