Foreclosure News

Foreclosures are Impacting on Valuations

For those living close to foreclosed houses it is a nightmare. For those who have bought foreclosed houses it is also a nightmare. Sanjeev Rathore is one of the purchasers. He complains that his home in the suburbs of Omaha that he had bought from a bank during a foreclosure sale in 2009 October had all the hallmarks of foreclosure blight – broken shingles, slashed gutters and smashed tiles.

Sanjeev is 34 years old. He bought this fixer upper located in the Mission Hill locality. He together with his wife Bhawana paid for it $189,000 – it being much less than the other houses in the locality. But currently the couple is protesting that the tax valuation slapped on it, $247,600, by the office of Douglas County Assessor, is not fair.

Rathore bemoaned that when in the beginning the bank stated the assessed valuation none came forward to bid. “So what does that say about the assessed value? It doesn’t speak to the market.”

He is not the only one protesting. As the housing market continues to be weak the county boards would have to face more protests all over Nebraska. The owners of properties can challenge their valuation till 30th June. If they have their way then the house owners might be able to bring down the tax on property. If the valuation of the Rathores dropped to the price they paid for it they would be able to save from taxes next year $1,200, presuming that the rate of taxes do not alter.

There is no surety that protesting against valuation assessment will win even if the owners are armed with the recent purchase papers and a list of all the flaws in the house. In 2009, 56% of the protestors in Douglas County managed to get their assessment amount change. In Sarpy 56% were successful.

The assessors in the county said they considered the problems of the housing market when making the fresh valuations last spring. In both the counties the assessors reduced more than they had increased this year of 2010.

A review by World Herald indicated that in May out of every four homes recently sold in the Douglas and Sarpy counties the assessment was on the higher side. It includes properties whose reduced valuation was more than the sale value. The Chief Deputy Assessor of Douglas County, Barry Couch, commented that the market belonged to the buyers.

Original: Foreclosures are Impacting on Valuations

Getting Mortgage Loans Have Become More Difficult

Three years has passed since the bursting of the housing bubble leaving all the parties concerned confused. The buyers and sellers are in a state of bewilderment as to what should be the best tactical line of action. The mortgage interest is low but soon it may start to increase. The price of houses continues to be low but already in some places it is crawling up.

In an uncertain market while house hunting in the South Bay real estate market a few tips could be of help.

There will be hard bidding for some of the houses. Although the sale figures have gone down in comparison to the boom period there are in the market some houses that will invite multiple offers. About half the houses in Santa Clara County that have been sold last May and 41% of those in San Mateo County were bought at a price that was more than what was the asking figure. The units most likely to attract competition are those whose prices were the lowest and those units that were in the best condition in some localities. Thus a condo with an asking price of $350,000 in Communications Hill of San Jose could well attract many offers. So might another unit in Los Altos with an asking price of $1.1 million. Short sales also attract buyers. In a short sale the permission of the lender has to be obtained by the seller since the house is sold for less than the loan amount due.

In these tough days it might be difficult to avail of mortgage loans – more complications and more time consuming. Since the last three years the number of documents required has sharply gone up. The lenders are checking what the prospective buyer’s state about tax records with their actual filings with the IRS. The lenders are also verifying from the employers about statements made regarding work history just prior to finalizing the deal as there are worries that meanwhile the buyer could have lost his job.

Experts are advising borrows to refrain from using credit cards at the last minute. There is the fear that a heavy amount withdrawn might go to the length of staining their credit history and place the loan-taking at risk. Thus it is better to get the loan pre-approved prior to making offers. It increases chances of running through a smooth process.

Original: Getting Mortgage Loans Have Become More Difficult

Surfeit of Foreclosed Houses is Spelling Pain for the Administration

Thousands and thousands of houses have been either foreclosed or repossessed by the banks. Some are vacant while others have been boarded and sealed. Squatters abound, crime flourishes and yards have become jungles. Entire localities are cursed by the blight of bank foreclosures. This has spelt pain for the government and administration with resulting loss of revenue. On this revenue depends grants forward to cities, and schools of California.

Without any other alternative the local governments have issued retrenchment notices numbering some hundred as they are being compelled to cut down on expenditure. The foreclosed houses do not generate revenue until the banks manage to sell these. So the revenue collection continues to fall leading to a long term decline in the tax base.

The banks own about 10,000 houses in the Bay Area and of these a mere fraction has been put up for sale. Another lot of about 20,000 are in the middle of foreclosure inching towards bank repossessions according to the findings of RealtyTrac.

In Contra Costa County out of 20 houses one is distress. Gus Kramer the assessor of Contra Costa County said that undoubtedly government’s services of all categories would suffer from this.

Kramer said that the banks are not going to push all the units into the market at one go. They are going to do so in phases and that will just linger the pain without resolving anything.

The pain can be seen. Concord City has already laid off a quarter of its employees. Antioch’s budget is a quarter less from what it was previously. Hayward has had to pass a tax so as to avoid laying off workers. These cities have been worst hit by the decline in revenue from property. The concentration of foreclosures is most in the eastern section of Contra Costa County. Closely following on the heels is Concord as well as Martinez.

To some degree the majority of the cities would be impacted – even the upscale ones. Ron Thomsen the assessor of Alameda County said, “The loss is really going to be spread throughout. Public education is going to get hit very hard because they get the majority of the property tax dollar.

California State apprehends taxes on properties would continue to fall. From 2009 to 2010 it fell by 4.1% and the drop will be 3.1% from 2010 to 2011.

Original: Surfeit of Foreclosed Houses is Spelling Pain for the Administration

Despite Decrease in Number of Jobless the Foreclosure Numbers Have Increased

Despite decrease in number of jobless the foreclosure numbers have increased according to Hardship Index. This is a year for elections. The lifeline of the party holding the reins ultimately depends on the economic health of the nation – at least that is the traditional wisdom. Within another six months the voters will cast their votes. At this juncture what is the complexion of the economy? It depends on who is measuring what?

Patchwork Nation has focused on 12 kinds of counties. Here two trends are noticeable from the latest figures available. Unemployment is decreasing – albeit slowly. But foreclosures are increasing. Thus the question being posed in capital letters is which one of these trends holds the key to failure or success?

The Economic Hardship Index collects various economic facts taking into account unemployment and foreclosure figures as well as gas prices. The index went up to touch 30.5 this May. It is an increase from 21.5 noted last April. It rose for all the types of communities from February to April. In some places the jump was rather sharp. Although the trends are evenly spaced across all the 12 community kinds there are sharp differences as to how these trends are causing ripples.

In the housing sector the counties that lean towards the Republican are enduring plenty of pain. The four types of community that saw the highest jump in foreclosures during February to April were the military centres, vacant localities, boom centres as well as evangelical epicenters. All these witnessed increases in foreclosure numbers by over 35% during this period.

None of the communities has been spared from this increase. Each type saw an increase by double digits in percentage excluding Tractor Country that was mainly rural and agricultural. Tractor County has been largely spared the battering from the recession.

Patchwork Nation has mainly been focusing in contrasting the various kinds of regions in the nation. This has lead to a lot of revelations whether in contrasts or in similarities.

Foreclosures are evenly spread out across all communities and this shows the depth of the housing trouble. There are differences with some communities doing better. The rates here are less than 1,000 but it is disturbing in those places where the numbers are high. It shows that the road ahead is long before the housing market will stabilize.

Original: Despite Decrease in Number of Jobless the Foreclosure Numbers Have Increased

Record Breaking Quarter of Foreclosure Related Troubles

The first quarter of this year has seen records being broken as regards foreclosure related troubles. It indicates that the crisis continues to rage and the end is not in sight.

Over 10% of the residential home owners had failed to make a minimum of one payment towards mortgage during the first quarter observed the Mortgage Bankers Association on Wednesday 19th May. In the last quarter of 2009 the proportion was 9.5% and in the first three months of 2009 it was 9.1%.

The figures have taken into account seasonal factors. For instance heating and holiday expenses increase mortgage delinquencies during the festive season towards the end of each year. By spring many catch up on the gap and become current again. Thus from winter till spring the delinquencies increase.

Over 4.6% of the residential house owners were facing foreclosures. This too is a record. If seasonal factors are not taken into account it is a modest rise from the close of the previous year.

The European debt problem has caused stocks to fall last Wednesday. The increasing number of mortgage defaults was also focused on. The industrial average of Dow Jones fell by over 160 points during early hours of trading.

The chief economist of the Mortgage Bankers Association Jay Brinkman said that the housing crisis seems to have stabilized. The seasonal adjustments could be exaggerated from the quarter prior to the first quarter of this year. He reiterated that he did not observe any signs of things getting any worse but he felt it would take some time for things to improve. That it had not got worse continued to be bad news.

During the third quarter there were about 4.3 million citizens who were defaulting by a minimum of three months or were already in foreclosure said Brinkman.

Hardly any dent has been made by the $75 billion programme named HAMP initiated by the Obama team in 2009 March. Over 299,000 borrowers had their loans modified permanently till last April. It calculated to 1.2 million since the time of the start of the programme. Nearly 277,000 borrowers calculating to 23% of the applicants have failed to pass through the trial period during the previous three months.

This year the foreclosure troubles are mainly caused by unemployment or underemployment. Initially the culprit had been unregulated lending by the banks. But today even those with prime loans with fixed rates are now stumbling and joining the foreclosure group.

Owner of Club Accused of Lying to Ward Off Foreclosure

River Vale Country Club is in trouble. Its largest creditor has pointed an accusing figure at Kwang Ho Keh, the major owner of the club for fraud and for resorting to “blatant lies” before bankruptcy court in his efforts to ward off foreclosure.

The creditors contend that two mortgages, amounting to $21 million was taken to purchase the club and adjoining estate. In court Keh said a Korean firm would advance $40,000 to develop the site. Late Keh informed the court that his daughter-in-law’s family had provided the funds.

The lenders formally made the accusation in court. A hearing will take place in Newark District Court to enumerate the value of the land and the club. The owners of the latter would have to appear before the court on 18th May. If the value is determined to be less than the amount due on mortgages ($21 million) the judge would most probably dismiss bankruptcy filed by the two firms that are the owners of the club and the land next to it and permit foreclosure proceedings. The hearing was scheduled for Thursday 12th May but has been postponed till 18th May.

The aim of the court is to try and find out how the maximum money can be got for the creditors from the property – the club and the land. The adjoining land belongs to another company that is planning to construct town houses numbering 59.

The mortgages were given by Palisades Financial based in Fort Lee. There are pleading before the court to get permission to foreclose because the worth of the club is less than the mortgaged value of $21 million. Keh the owner of 66% of the property said that by allowing him to follow up his plans for development would be the best manner of boosting the value of the club. He calculated the current value of the club to be $33 million. It would go up by $6 million if he secured the approval for the township. The lenders calculated the present value to be $14.5 million.

Keh is a developer based in Englewood Cliffs. In 2006 he purchased the club and filed for bankruptcy last 5th February just prior to the club moving on to foreclosure auction.

Keh is battling on many legal fronts – being himself bankrupt. Many legal suits and filings of bankruptcy have charged him for mismanaging funds of firms, misleading investors and unknown to others transferring dollars from one company to another.

Source: Owner of Club Accused of Lying to Ward Off Foreclosure