Bank Foreclosures Information

The vacation home market in Steamboat Springs in Routt County, Colorado was a favorite among affluent baby boomers. Investor speculations created a market boom in the area between 2003 and 2007, spurred by the growing demand for vacation properties.

According to industry experts, many investors competed for pre-construction prices planning to sell for profits upon completion of a condominium project.

But the real estate development market took a beating in 2007 due to the collapse of subprime lending, decline in consumer spending and bank failures. The devastating developments wreaked havoc on the local economy, resulting to a drop in construction and homes sales, increase in the number of bank foreclosed home listings, shut downs of restaurants and retail centers and massive lay offs.

According to analysts, the mountain real estate development is driven by affluent people belonging to the 5 percent of the total population of the country. They believed that the key to the recovery of the mountain resort property market lies on the financial conditions of affluent families in suburban Texas, Connecticut, California and Illinois.

They said that baby boomers wanting vacation homes transformed the real estate market in Routt County into a booming business in 2007, reaching $1.5 billion total home sales. The booming market attracted all sorts of buyers, many wanting to capitalize on investment potentials of mountain resort properties.

Many of them bought grand houses and paid their mortgages by renting the properties to vacationers. The amount earned from vacation rentals were more than enough to pay for their mortgages.

Until the latter of 2008 when the financial market collapse and recession spreads quickly across the country, leaving the affluent vacation home market dried up. And to make matters worse, a great number of loans taken out for vacation homes were adjustable rate mortgage with higher interest.

The turn of events left many owners unable to save their properties from foreclosures. Some of them just walk away from their properties when they learned that they were worth less than their mortgages.

The number of properties that received foreclosure filings as of July 24 reached a total of 96, and the figures keep getting higher every day.

Related Posts:

• Delaware Beach Houses on Bank Foreclosure Listings
• Nixon’s Farm’s on Listings of Bank Owned Homes
• Home Foreclosures for Sale in Upscale Southwest Florida
• Tennessee Bank Foreclosures – Inform Tell Alert Advice
• Bank Foreclosed Properties Rising in California

The mortgage servicers accused of abusing mortgage borrowers are the ones receiving much of the billions of dollars allocated to the Obama administration’s Making Home Affordable Program, which aimed to help Americans keep their houses from becoming repossessed houses, according to a study made by Associated Press.

AP said also that the federal government has to work with mortgage servicers despite their blemished records in treating borrowers because they stand as the only connection between mortgage lenders and borrowers.

Mortgage servicers are entities that collect monthly loan payments from borrowers and then distribute collections to the lenders or investors holding the mortgages.

According to the AP, the servicers are the ones in the best position to restructure distressed home loans under the federal government’s $50 billion home loan reduction program and they are also rewarded for their service.

Despite their role in the Home Affordable Modification Program, the AP found that more than 30 mortgage servicers have been sued for systematically charging illegal fees and harassing borrowers. Recently, they are again accused of hindering efforts to modify loans, increasing the fees they earn while delaying the delivery of help to borrowers.

Even the biggest names in the mortgage servicing industry, like Bank of America, JPMorgan Chase, Wells Fargo and Citigroup, have been sued for mortgage lending and servicing abuses and some of them have made settlement agreements with entities that represent homeowners. They are also being rewarded for every loan modification they work out.

Meanwhile, the smaller players which are now servicing the majority of subprime loans and holding volumes of delinquent loans have been sued for worse accusations.

The biggest abuse lawsuit pursued against a mortgage servicing company was the suit brought by the Federal Trade Commission and the Department of Housing and Urban Development against Select Portfolio Servicing. The servicer was accused of charging illegal fees, including costs for insurance not needed by borrowers.

Select Portfolio settled in 2003 and paid $55 million, but now it can receive up to $660 million for working out loans under HAMP.

According to AP, more than 30 servicers are facing lawsuits accusing them of charging illegal fees, engaging in illegal loan collection practices and prematurely foreclosing on houses.

More than 14 have been sued for misleading borrowers about HAMP, leading to more foreclosures. At least 3 of the servicers have settled predatory collection accusations and promised to stop any illegal practice, but they are still being sued for the same accusations.

Related Posts:

• Florida Bar to Curb Bank Foreclosure Homes with Bank Money
• Lenders Exempted from Government Foreclosure Prevention Plan
• Is Relief on it’s way for North Carolina Bank Foreclosures?
• Foreclosure Help Program Can Cut Lenders Losses
• Government Repo Prevention Program Makes Some Progress

Many cities across the country posted a decline in their inventory of homes for sale last month as bargain-hunting buyers and investors continue to search for distressed properties.

As of July 31, the number of homes for sale on the market in 28 major cities across the country dropped by 2.5 percent compared with figures the previous month. Homes for sale include condominiums, single-family houses and town houses.

Since 1984, July inventories on the national basis have dropped by an average of 1 percent compared with the June level. Last month’s inventory rate in 28 major metropolitan areas in the country dropped by 27 percent compared with June figures the previous year.

According to industry experts, the exact inventory rate could not be determined because the numbers do not include all bank owned foreclosed house that are due for release on the market for sale by lenders.

They said that almost 50 percent of foreclosed properties are not listed for sale by banks, adding that many of these repossessed homes are being used as rentals. Also, some foreclosed houses that are not listed need major repairs and are subject to delays or litigation.

Some industry analysts are expecting a resurgence of foreclosure properties on the market before the year ends. They explained that the resurgence would be driven by the increasing unemployment rate which left many financially-struggling homeowners unable to pay their monthly mortgages.

Other factors that would contribute to the anticipated surge of foreclosures this year are the resetting of adjustable-rate mortgages and the decision by lenders to pursue foreclosure actions that have been delayed due to moratoriums in several states that aimed to help distressed homeowners remain in their homes.

Furthermore, industry analysts are expecting that some major metropolitan areas that were spared from the foreclosure crisis will experience the next wave of foreclosures.

In the first six months of this year, cities with over one million population experienced a rapid rise in foreclosure rates. Las Vegas, Nevada posted the most number of foreclosure filings for the period, with one out of 13 properties on the brink of foreclosure.

Another city that has been spared from the crisis last year is Chicago, Illinois which now posted a 30 percent increase in its foreclosure activity.

Related Posts:

• Bank Foreclosure Property Supplies Plentiful in May
• House Repossession Filings Surge in Idaho
• Unemployment Cause Bank Foreclosed Home Inventory Rise
• Houston Foreclosure Homes for Sale Rose in June
• Drop in Bank Foreclosed Home Price Drove Midwest Home Sales

If industry analysts will just look at recently released data, it showed that the real estate market is on its way to recovery. In June, new home sales rose by 11 percent, the highest in eight years. The number of unsold houses dwindled while housing starts rose in the two consecutive months of May and June.

Furthermore, the monthly home prices in 20 major metropolitan areas in the country are showing some stabilization based on the Standard & Poor’s Case-Shiller Index.

However, data did not impress some industry analysts as they looked at the overall scene in the housing market.

They said that the overall housing market is still soft, noting the long time it takes to sell a property, the difficulty of many borrowers to obtain financing and challenges facing lenders and appraisers.

The only silver lining in the current grim scene is the flood of first-time buyers and speculators who were enticed by discounted prices and the $8,000 tax credit.

Industry analysts who do not seem to see any turnaround in the housing market explained that declining property prices is not yet over. Center for Economic and Policy Research co-director Dean Baker said that it is wrong to assume that the housing market has reach a turning point, noting the oversupply of houses, including bank owned foreclosure homes, which means property prices will continue their downward movement.

Industry analysts noted that many potential buyers are taking their time making a purchase because they are not sure if they still have jobs in the coming months. Added to that is the lackluster results of government efforts to prevent foreclosures, including mortgage modification programs and foreclosure moratoriums.

Yardeni Research economist Ed Yardeni said that a solid recovery in the housing market should start with controlling the rise of unemployment which has now a national average of 9.5 percent and is expected to jump to 10 percent by the end of 2009.

Assistant professor and Oregon Economic Forum director at the University of Oregon Timothy Duy said that a fast recovery for the housing market means a return to the 2006 mortgage market wherein lenders did not give attention to the growing household debt levels and not so good credit histories.

He said that there will be no housing recovery unless conditions return to the period wherein loans are provided to almost everyone.

Related Posts:

• Increase in Bank Foreclosure Homes Delay Florida Recovery
• Investors Waiting for Corus Bank Forclosed Properties
• Low Loss Reserves on Hopes of Fewer Bank Foreclosed Homes
• How to Find Foreclosures in Minnesota – Check Pre Foreclosure Notices
• House Repossession Persists in RI Despite More Home Sales

In five U.S. states, banking regulators closed 5 banks downed by record numbers of defaults and foreclosures, increasing the number of failed federally insured banks this year to 69.

Mutual Bank, the biggest of the shuttered banks, with $1.6 billion total deposits and $1.6 billion in total assets, was shut down by the banking division of the Illinois Department of Financial Professional Regulation.

The banking division made FDIC as receiver and approved the assumption of deposits and assets of the failed bank by Texas-based United Central Bank of Garland. The FDIC signed a loss-sharing deal with First United Central Bank covering Mutual Bank’s $1.3 billion assets. The 12 branches of the failed bank will reopen as units of United Central Bank.

First State Bank of Altus, which had $98.2 million in total deposits and $103.4 million in total assets, was shut down by the Oklahoma State Banking Department and will be taken over by Herring Bank of Amarillo, Texas. Herring will acquire the failed bank’s deposits and around $64.4 million of its assets. The remaining assets will be acquired by the FDIC, which was appointed as receiver, for subsequent sale. First State’s branches will reopen as units of Herring Bank.

FDIC closed Integrity Bank in Jupiter, Florida and approved the assumption of the failed bank’s deposits and around $52 million of assets by Fort Lauderdale-based Stonegate Bank.

Integrity had $102 million in total deposits and $119 million in total assets. The FDIC will sell the remaining assets.
Another bank closed by FDIC was First BankAmericano in Elizabeth, New Jersey, which had $157 million in total deposits and $166 million in total assets. Another New Jersey bank, Crown Bank, will assume the First BankAmericano’s deposits and assets, including its six branches.

Peoples Community Bank of West Chester, Ohio will be taken over by Hamilton-based First National Bank, which will acquire $657.8 million of the failed bank’s assets in an agreement with the FDIC. Peoples had $598.2 million in total assets and $705.8 million in total deposits, including 19 branches.

The total of 69 bank failures so far this year represents big jumps from the 25 failures last year and the 3 failures in 2007.

According to analysts, residential loan defaults and foreclosures have been the main causes of the failures. Although residential foreclosures are slowing down, regional banks are expected to suffer from commercial real estate defaults. The FDIC expects to spend around $70 billion to cover bank failures through 2013.

Related Posts:

• Bank Foreclosure Homes Affect Five More Banks
• Michigan Bank Foreclosures Include Detroit Hotel
• Banks on the Brink of Disaster, Foreclosure Still Looming
• Banks Required by FDIC to Report on Foreclosure Fund Spending
• Bank Repo Homes Contributed to Boston FHLB Loss

The pace of repo homes in Houston increased in June compared to the foreclosure rate during the same month in 2008, based on real estate data in the area covered by Houston, Baytown and Sugar Land.

In June, 1.1 percent of all outstanding mortgage loans in Houston had been foreclosed, a jump from the 0.8 percent rate in June 2008. But the June rate was lower than the nationwide foreclosure rate of 2.6 percent.

The city’s mortgage default rate also increased in June to 4.9 percent of all outstanding home loans. Loans are considered in default if three monthly payments or more have remained unpaid. The home loan delinquency rate in June last year was 3.4 percent.

For the one-year period from July 2008 through June 2009, nearly 52,000 foreclosure cases were filed, equivalent to approximately 142 foreclosure filings per day and representing an increase from total filings in the previous one-year period.

For the 12-month period from July 2007 through June 2008, more than 48,000 foreclosure cases were filed, equivalent to about 132 foreclosure filings per day.

In a study of foreclosures in 203 metro areas across the country for the first 6 months of 2009, the metro area covered by Houston, Baytown and Sugar Land had 14,213 households receiving a default or foreclosure notice.

One household out of 153 housing units in the metro area was hit with a foreclosure filing, putting the Houston metro area in 109th place among metro areas with the highest rates of foreclosure in the first 6 months of the year.

During the same period, the metro area covered by Dallas, Fort Worth and Arlington posted more foreclosure filings than the Houston area. A total of 18,037 households were given default or foreclosure notices, representing 0.76 percent of all housing units in the area, higher than the 0.65 percent rate in Houston.

The other two Texas metro areas with higher foreclosure rates than Houston in the first 6 months of the year were the Browsville and Harlingen metro area and the San Antonio metro area. The Browsville area had 1,021 foreclosure filings, representing 0.71 percent of all area housing units. San Antonio posted more than 5,000 foreclosure filings, representing 0.68 percent of all its housing units.

Across Texas, more than 49,000 households received default or foreclosure notices in the first half of the year. In June, more than 12,000 received foreclosure filings, with more than 4,000 units already counted as foreclosure homes for sale.

Related Posts:

• More Units Listed in Springfield Foreclosed Home Auctions
• Foreclosed and Bank Owned Houses Numbers Rose in Austin in 2010
• Foreclosed Home Auctions in Nevada and Colorado
• House Repossession Filings Surge in Idaho
• Prices Improve Despite Supplies of Homes in Bank Foreclosure Listings