REPOST: Foreclosure Suicides Reveal Darkest Side of The Housing Crisis

The grimmest human carnage of the housing crash is beginning to emerge as a new federal study shows foreclosure-related suicides spiked by 253 percent between 2005 and 2010. Researchers at the U.S. Centers for Disease Control and Prevention examined the suicides of homeowners from 16 states who were in the process of losing their homes to foreclosure or already had been booted from the premises. In 2010, the number of such ex-homeowners who took their lives was 106, up from 30 in 2005.

“Foreclosure may be exceptionally stressful, because it is very protracted and consists of multiple negative events,” said Katherine A. Fowler, a CDC researcher and lead author. “… Other studies show that people tend to become more depressed about negative life events for which they feel personally responsible, and for which they can’t control the outcome.” One promising trend following those tragedies: June marked the lowest level of foreclosure filings — 107,194 — since July 2006, according to RealtyTrac, a foreclosure sales and analytics company.

REPOST: Foreclosure Settlement Still Failing 700,000 Families One Year Later

One year after federal bank regulators pledged that a nearly $10 billion legal settlement would quickly deliver cash to foreclosure abuse victims, hundreds of thousands of people are still checking their mailboxes each day, only to find them empty.

As of January, about 732,000 settlement checks had not been cashed, according to data shared with The Huffington Post by the Office of the Comptroller of the Currency — a number that exceeds the entire population of Baltimore. The total value of this unclaimed heap of money: $600 million.

Regulators say they are doing everything they can to make sure that all of those who qualify — 4.4 million people who received a foreclosure notice from one of more than a dozen major U.S. banks — receive their share of the $3.6 billion pie. It’s not clear how many of the uncashed checks were delivered to the wrong address, though regulators have acknowledged in the past that tracking people down has proved vexing.

An OCC spokesman said that Rust Consulting, the paying agent, has reissued more than 850,000 checks since autumn in an effort to make sure as many people as possible collect on what they are due.

Rust Consulting did not respond to a request for comment, but in the past has said that many of the addresses provided by the banks were old and inaccurate.

To those who are still waiting, these explanations provide little comfort.

“This is ridiculous,” said Roberta Reid, who is due a payment she reckons should be about $5,000. She said she has strived to get answers about why her check hasn’t arrived at her home in Portland, Maine, to no avail.

“I’ve called dozens of times,” she said. “It’s as bad as trying to get an answer from a bank.”

Reid has also sought to modify the terms of her loan to lower the rate — assistance also pledged under the foreclosure settlement. That hasn’t happened, either. She and her husband are actually paying $500 more a month on their home mortgage than they did when they refinanced with Ally Financial, then known as GMAC Mortgage, at the peak of the foreclosure epidemic, she said.

“Is it all a waste of time?” Reid asked, speculatively. “I don’t understand what they’ve accomplished.”

The failure to deliver checks to the proper addresses is the latest setback for regulators in their management of a foreclosure epidemic that claimed more than 4 million homes.

Untold thousands of people have complained in recent years that they were subjected to a nightmare experience of lost paperwork, misapplied fees and Kafkaesque phone calls with clueless customer service representatives as they strived to avoid foreclosures they say were preventable. These claims are backed up by a swelling number of academic studies and insider accounts of misconduct and abuse.

To resolve these complaints, bank regulators initiated a program in 2011 known as the Independent Foreclosure Review. Under the program, borrowers could apply to have an independent consultant comb through their mortgage file and determine the scope of the harm.

Though it proved slow and expensive, and was beset by allegations of incompetence and bank interference, at the heart of the program was an ideal that greatly appealed to people desperate for help: that someone would take the time to figure out what went wrong.

As it became clear the individual review process was more time-consuming than anticipated and difficult to regulate, it was replaced with a settlement comprised of a very different proposition. Regulators waived the requirement that borrowers submit claims in order to obtain a payout. Everyone who received a foreclosure notice in 2009 or 2010 would get a check of at least a few hundred dollars, with payment determinations calculated by the banks themselves.

“Our new approach will get more money to more people much more quickly,” said Thomas Curry, head the Office of the Comptroller of the Currency, in announcing the deal.

This decision didn’t sit well with the hundreds of thousands of people who had applied for a review. Many of them had spent weeks digging through documents in order to prove their case. Now they were told that the same banks they blamed for their situation would determine the size of their checks. Moreover, the decision to dole out cash to far more people — about 4.4 million, all told — ensured that payouts would be small.

The worst fears of those people who felt they had a valid case were soon realized. In April 2013, the first checks began landing in mailboxes. The average payout was just $865, according to data federal regulators shared with The Huffington Post last year — much smaller than what homeowners had forecast. Many people received checks for just $300. Almost all — 99.7 percent — received $6,000 or less. Some checks bounced, and 400,000 were sent to the wrong address.

Bridget McCready, who tried to save her home in Cape Coral, Fla., only to have her mortgage company rebuff her requests for a loan modification, is one of those who received the smallest payout.

“Well, I cashed it,” she said of her $300 check. “Big whoop.”

Accounts like McCready’s have served to greatly diminish expectations among those still waiting for a check.

Reid, the Portland woman, said her troubles started when a now-defunct mortgage company misapplied a single loan payment in 2007. That triggered a cascade of late fees, and in 2009, a foreclosure filing, she said. A modification of the terms of her mortgage actually left her paying $500 a month more than before. She said she hasn’t been able to get answers about why her check hasn’t arrived, or whether she qualifies for a new modification.

“It’s been five or six years of complete awfulness,” she said.

Ally Financial, which filed the foreclosure papers in Reid’s case, didn’t join the settlement until July. Still, Reid said she can’t figure out what is taking so long. She and her husband have lived in the same house for 30 years. The address is in the phone book.

She said she was told recently that her check should arrive by the end of the month.

“I’m not holding my breath,” she said.

Foreclosure Starts Hit Pre-Crisis Low

The proportion of home loans that entered foreclosure in the second quarter of this year hit its lowest point since early 2006, before the crisis began, according to data released Thursday by the Mortgage Bankers Association.

The low rate is another sign that higher home prices and an improving job market are helping to put the mortgage crisis in the rearview mirror.  At the crisis’s worst point, in the third quarter of 2009, servicers started foreclosures on 1.42% of home loans. Last quarter, they began foreclosures on only 0.4% of loans, the lowest rate since the second quarter of 2006.

The delinquency rate–loans that have at least one late payment but are not in the foreclosure process—decreased to 6.04% after adjusting for seasonality, reaching its lowest level since the end of 2007.

Don’t celebrate just yet. Banks and homeowners still have a daunting backlog of already-foreclosed-upon homes to work through. In the second quarter, 2.49% of homes were in the foreclosure process, down from the peak of the crisis, but still well above the 1% or so rate before the crisis began.

The Mortgage Bankers Association found that some states have larger tasks ahead than others. While fewer than 1% of loans were in foreclosure in Virginia, Colorado and Arizona, in the first quarter, in New Jersey, more than 8% of loans were.

The Mortgage Bankers Association found that nearly 7% of loans in Florida and almost 6% of loans in New York were in foreclosure.

The biggest stockpiles were in so-called judicial states, where foreclosures must be processed by local courts and tend to take longer.

Florida, New York and New Jersey in the second quarter accounted for more than 40% of all loans in foreclosure, which means that the foreclosure pipeline in those three states will have an outsize impact on national figures going forward.

One thing the falling foreclosure rate hasn’t yet done is lead banks to open the spigot for new mortgage lending. The MBA on Tuesday reported that mortgage credit availability loosened slightly in July but is still far depressed from 2004 levels, before the housing boom crested.

USHUD and How to Profit from the Next Wave of Foreclosures Part II

After we have purchased a foreclosure home and we have a tenant in the home that is paying, we need to repeat the process and keep repeating it as the more we own the more the banks will lend us and the more we can take advantage of the next wave of foreclosures. At USHUD we have experience with investors that have not just purchased a foreclosure home but have bought ten or twenty foreclosures at a time. But this can only be done when we have built up our inventory of positive cash homes and have the equity to leverage against the next homes. This when we begin to be able to buy homes with no money out-of-pocket and can really get the ball rolling.

rent2The one thing that we always have to remember, if we are buying one foreclosure home or twenty is that they each have to be cash positive at the end of each month and year. If we forget this simple rule and get confused we can wind up with several homes that are costing us money each month. Even though the equity is building the wait is not worth the negative cash flow. If the position isn’t cash positive we shouldn’t be in it. And if we know that is a potential issue we shouldn’t buy it. It is nearly impossible to leverage negative cash positions and this should be avoided.

One way around negative cash positions is to use the lease option contract to rent the home for a higher monthly payment. We can generally add an additional $100 on to the rental for every $100,000 in value of the home. This can be stretched but stretching too far can cause an increased vacancy rate and thus reverse the attempt of creating a positive cash scenario.

USHUD and How to Profit from the Next Wave of Foreclosures Part I

The first thing we need to do is get our finances in order and start taking advantage of some of the bargains that are still on the market. Contact a loan officer in your area (Foreclosure finance specialists can be found on USHUD.com). After discussing the options with a local mortgage professional and contacting the local USHUD agent in your area we should be prepared to start searching for a bargain home which can also be found on USHUD.com. By working with an agent in the know instead of the agent that we already know we can usually find a better match for what we are looking for. What are we looking for? We are looking for a home that needs a minimum amount of repairs and then place a bid on the property that is reasonable and will win the house for us. We are not looking to make unrealistic offers that are not going to be accepted. Looking at lots of homes and making offers that are not going to be acceptable is a sure fire way of getting discouraged.

rentThis is where we can make a real difference in our futures. Instead of waiting for the perfect investment home, we need to focus on a home that can meet our needs as far as rental income. The more repair the more out of pocket costs. According to studies from USHUD sources, the more repairs the more vacancy time which is one of the worst possible scenarios for the owner of the rental homes. Even if the house is paid for in cash, vacancy is the enemy and should be avoided like the plague.

The only thing that is worse than vacancy is being in a desperate position to get a tenant and then making the mistake of renting to a derelict that thinks nothing of destroying our rental property. This can be avoided easily by marketing the house as quickly as possible. The repairs, if there are any don’t even need to be done before we show the home to a potential tenant. We need to remember that tenants are just as likely to want to put their own spin on the choices of colors and carpet and if it is not too out of the norm, making the house look the way they want can generate good will and a longer lasting tenant.

7 Helpful Tips For First Time Homebuyers

Looking for a new home can be a pretty exciting task. With that much money on the line, it’s worthwhile to read up on the process before you set out. Unnecessary mistakes can and should be avoided while trying to get the best deal for your money. As a first-time home-buyer, proper guidance from seasoned professionals can make all the difference.

Here are a few tips first-time buyers can take when trying to find their first home:

Get clear on what you want – This is the most important part of your preparation. You are about to enter a shopping experience that is unlike any other. At times, it can be stressful and difficult. There is a lot of money on the line and a big commitment to be made, so prepare accordingly. Get clear on what you really want and what you are willing to compromise on. This will make your home shopping experience much more efficient and will give you a map to go off of should tensions run high. Take a look at this guide to buying your first home, which might help you narrow down your wants vs. needs. The better prepared you are, the better chance of having a smooth transaction.

Do your research – Home shoppers today are more empowered than ever before. You have so much information at your fingertips. Go online and find the areas you want to live in. Narrow down the neighborhoods you want to consider to three or four, and focus on those. Learn about the cost of the things you really want and the cost of the things you can do without. The more knowledgeable you are the better you will be at negotiating a good deal.

Talk to the bank – Preparing to get a mortgage in advance your actual purchase will be super important. Before you start looking at houses you should have a discussion with your lender. The lender will be able to give you an honest assessment of what your finances look like, how much house you can afford and what your rates will be. You want to know all of this – what it will really cost you – before you start looking at homes you can’t actually afford. Find out what your monthly payment will be at different amounts and determine what your personal limits are as well. Depending on your credit, the lender may be willing to give you far more than you need. Once you know the time is right to buy a home make sure you get pre-approved by a lender. Make sure you understand the difference between getting pre-approved and pre-qualified for a mortgage. Without a doubt you will want to get pre-approved as a pre-qualification letter is not worth much. A savvy REALTOR® representing a homeowner will pick up on this right away. If you are competing with other buyers and are not financially prepared, you could lose out on your dream home!

Think about the future – Is this going to be a starter house that you will move out of in five years? Is it going to be a property that you fix up and flip? Is it going to be the home for your new family that you will be in for 10 or 20 years? Your long-term plans will help dictate your purchasing choices. It is important to understand what you really want this home for before you go and sign any papers and spend any money. One of the biggest mistakes first-time homebuyers make is not thinking about their long-term plans.

Find a good REALTOR®– A real estate agent can prove invaluable when shopping for a home. If you find one that is good – an agent that is finding people the homes they want at a price they are happy with – then much of the work will be done for you. The agent will talk about what you want, will run you through much of the above mentioned areas and will help you find the houses that are really what you are looking for. The agent will also be an effective negotiator, meaning that you will probably get more house for your money than if you went at it alone.

Set a timeline – The situation you are in is uniquely your own. You want to set a timeline for when you will find and buy home – a timeline that reflects your realities. If you have bad credit that needs to be cleaned up first, for instance, you will need to spend some time working on that before you actually start house hunting. If you need to move right now, that is another factor in your timeline. Give yourself some restrictions so you will be encouraged to move at a steady pace and get the job done. Hunting for a house can be quite stressful and it is not something that should be drawn out any more than necessary. Determine what you want, work with a REALTOR®, and get it as efficiently as possible.

Understand your fiscal responsibility – Another problem that first-time homebuyers don’t always properly think through is the financial responsibility of owning a home. A large amount of buyers will think about making their mortgage payments and nothing else. If you have been renting for a while, or even living with mom and dad, it is easy to see why this can happen. Unfortunately, owning a home comes with quite a few more additional first-time home expenses that you may not have considered such as appliances, furniture, and even taxes and insurance. These are all important things to consider when putting together your home buying budget.

Use all of the above tips for finding your first home and you will be well on your way to enjoying your new life as a homeowner!