Foreclosures: 343,000 and Counting

The number of Americans losing their homes to foreclosure continued to soar in June, according to a report released recently.

RealtyTrac, an online marketer of foreclosed properties, reported that lenders repossessed 71,563 homes in June. A year ago, just 26,369 homes were taken back.

During the first six months of 2008, 343,159 Americans lost their homes, up 136% from 145,696 recorded during the same period in 2007.

There was a shred of good news: When compared with May, filings declined 3%. Part of that decline may be traced to the actions of some states, including Maryland and Massachusetts, which have put moratoriums on foreclosures.

Adding to foreclosure woes is that home prices have been falling all year, down more than 14% in the first quarter, according to the latest figures from the S&P Case-Shiller Home Price Index.

Price declines strip homeowners of equity, making many mortgage borrowers owe more than their homes are worth. When they're underwater, they can't borrow against home equity to help out during a rough financial stretch.

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The New Housing Stimulus Package

Even with Presidential veto threats looming, the housing stimulus package has taken another necessary step to being implemented – it has taken on another round of changes, passed the Senate, and is on its merry way to the White House again.

The package is much larger than our aforementioned Foreclosure Prevention Act – it goes by a few different aliases, all hoping to do the same thing – give the US economy the kick in the pants it needs.

Here are the highlights of the new package:

• We all know conventional and FHA loan limits have been raised through 2008. Currently set to expire on New Year’s Eve, the housing stimulus package includes plans to keep them higher than they were in years past – it’s likely to be somewhere around the $700,000 mark. This means lower rates on bigger loans.
• Tax credits for “first-time home buyers” – it’s in quotes for a reason. This group is defined to include actual first-time home buyers and buyers who have not owned a home for at least three years. The tax credit for those buyers can be up to $8,000.
• A property tax reduction for American homeowners—$500 for single filers and $1,000 for joint filers—for the 25+ million homeowners who pay property taxes, but choose not to itemize their deductions.
• What about homeowners already in distress? They’re covered, too – the FHA is working on programs, including FHA Secure, to assist homeowners currently behind on their mortgage and for those who currently owe more than their home is worth. It could help up to 400,000 homeowners potentially facing foreclosure.
• And for the lenders? Better disclosure with regards to the potential changes in mortgage payments during the loan’s lifetime. The information will need to be provided at least seven days before closing.

Those are just the high points of the housing stimulus package. While controversial, Congress has taken ample time to discuss, re-write and re-discuss the bill. It’s coming to the point of fruition – will President Bush sign or not? If he doesn’t, the fact remains that Congress could be so united in the housing stimulus package that they will override him.

What do you think? Will this package pass and get a signature from the President, or will he veto it in this election year? We'd love to hear your opinion. Just click the "comment" link below and tell us what you think. Don't worry, even though you need to insert your email address to post, that email address will not show up here on the site… and no one is going to contact you directly using your email address.. that's our promise! We'd love to hear from you.

Housing Rescue Pace Slows

Hope Now, the mortgage industry alliance of lenders, servicers and housing counselors, reported recently that it helped roughly 170,000 homeowners avoid foreclosure in the month of May. That's down 7% from the 183,000 loan workouts it reported for April.

The group estimates that its members have helped keep 1.7 million homeowners out of foreclosure since July 2007. Repayment plans are considered most effective for borrowers experiencing a temporary financial set back - such as a layoff - in which they fall behind on their mortgage payments.

Housing advocates contend that repayment plans are typically not sufficient to keep today's subprime borrowers in their homes because they don't reduce the borrower's delinquent debt - they simply give borrowers more time to repay their outstanding debt on top of their regular mortgage payments.

While the number of homeowners that Hope Now helped dipped 7% from April to May, the number of homes lost to foreclosure during that same period jumped 35% to 73,000, according to RealtyTrac. Foreclosure filings were up 7% in the same period. That's a trend foreclosure experts expect will continue for the next 18 months.

National Speed Limit: Would You Slow Down?

Sen. John Warner of Virginia, asked Energy Secretary Samuel Bodman to look into what speed limit would provide optimum gasoline efficiency given current technology. He said he wants to know if the administration might support efforts in Congress to require a lower speed limit.

In 1974, Congress set a national 55 mph speed limit because of energy shortages caused by the Arab oil embargo. The speed limit was repealed in 1995 when crude oil dipped to $17 a barrel and gasoline cost $1.10 a gallon.

Today, gasoline averages around $4.10 a gallon nationwide, with oil hovering around $145 a barrel.

If Congress does re-impose a lower speed limit on our nations' highways, the question is, will that make you slow down? Tell us what you think about lowering speed limits in an effort to save gasoline and HOPEFULLY lower the skyrocketing fuel prices. Do you think lowering the speed limit will even make any difference at the pump? Sound off. Tell us what you think. Use the "comment" link below to tell us. Your email address will NOT be published here, so don't worry about anyone emailing you or harvesting your email address here.

Housing Market: Can It Really Get Any Worse?

An even gloomier scenario may be in store for an already ailing U.S. housing market if the overall economy slips into a recession, according to UBS Securities analysts.

Falling home prices, soaring foreclosures at a time of tighter lending and rising unemployment are all weighing heavily on an already troubled housing sector, the analysts said during a conference call recently.

Lack of funding is the biggest problem facing the housing market right now, according to the analysts, with subprime and Alt-A securitized markets shutting down and banks being forced to cut their mortgage lending dramatically due to capital constraints. So-called Alt-A loans are made to borrowers with less than prime credit ratings but who are above subprime.

Fannie Mae and Freddie Mac have also cut back their lending to stressed subprime and Alt-A borrowers with low incomes and high loan-to-value ratios.

Foreclosures, which have been building over recent months as borrowers default on risky subprime home loans, are not expected to peak until late 2008 to mid-2009.

So where do you see the housing market? We'd love to hear your opinion. Use the comment link below to sound off about it. Your email address will not be published here, even though it is required in order to post your comment.