Brooklyn Renters Feel The Brunt Of Foreclosure Crisis
April 28, 2008
According to a recent New York Daily News article, thousands of city renters being forced from their homes when the owner of the property falls into foreclosure. In fact, a recent study released by the New York University Furman Center for Real Estate and Urban Policy found that Brooklyn had the most renters affected by the mortgage crisis in the city last year. More than 7,000 residents lost their apartments in foreclosed Brooklyn homes last year, compared with 3,723 in Queens, 2,483 in the Bronx, 1,111 in Manhattan and 488 on Staten Island.
As these homes are taken back by the lenders or purchased by new owners, renters are kicked to the curb. Many had no idea their landlords weren’t paying the mortgages, so the news is a surprise.
When a bank forecloses on a landlord, the tenant has no guarantee of being allowed to stay in the property. In addition, neither the bank nor the landlord has any legal obligation to inform the tenant of the foreclosure. The renter first learns of the foreclosure when he or she is told to pack up and move out.
If the renter does not go peacefully, he or she faces an eviction proceeding in landlord-tenant court. That can involve time lost from work or other obligations, legal fees, and sleepless nights.
Some lenders, mindful of the fact that renters can drag the process along for months, offer “key money” to help a renter move quickly. Though some renters avail themselves of this offer, others cannot do so. Their security deposits are gone, they have been paying rent faithfully rather than saving money for the move, and are left with few choices and not much time to make them.
If you enjoyed this post, make sure you subscribe to my RSS feed!
New York Foreclosure Help Not Forthcoming For The Majority Of Homeowners
April 27, 2008
A recently released study discovered 70 percent of homeowners two months behind on their mortgages are not getting the assistance they should.
The study released by the State Foreclosure Prevention Working Group, shows that only one in three homeowners were able to complete a workout scheme within 45 days.
The study looked at delinquent mortgages from 13 of the 20 top mortgage service providers from October to January, and comprised 58 percent of all subprime mortgage loans serviced.
Although the loan providers have revised their loan terms from the traditional forbearance and repayment schemes, critics claim that the bent remains on getting payments in the door rather than helping people who genuinely need the assistance.
The SFPWG is composed of 11 state Attorney Generals, two state banking departments and the Conference of State Bank Supervisors.
If you enjoyed this post, make sure you subscribe to my RSS feed!
Foreclosure Rates On The Rise For Jumbo Mortgages
April 26, 2008
The current foreclosure crisis focuses largely on the subprime market, those downtrodden middle- and lower-class consumers who were suckered into the American Dream and sold homes clearly beyond their means. But what of the affluent, those folks living in huge McMansions and riding around in expensive cars?
A recent article focuses on this problem and reveals some (not so shocking) facts - the rich are headed into the same sinkhole as the rest of the nation.
According to Loan Performance, a unit of First American CoreLogic, a real estate information company based in Santa Ana, Calif., about 870,000 borrowers took jumbo ARMs — mortgages of $417,000 or more — from 2005 to 2007. In the fourth quarter of 2007, 8.10 percent were two or more payments late, it found, while 2.62 percent were in the foreclosure process and 1.35 percent had been foreclosed. All the numbers were up from the third quarter.
Mark Zandi, chief economist for Moody’s Economy.com, predicted that eventually 8 percent of these jumbo ARMs will be foreclosed. In the first quarter of 2008, “the delinquency and foreclosure rate will clearly be higher,” he said.
This shouldn’t come as any surprise to even the casual reader. The wealthy are just as prone to a “keeping up with the Jonses” mentality, striving to outdo one another in the driveway and in social settings - who has the nicest car, the biggest house, the pool table in the finished basement, the home theater system . . . the list goes on and on.
These trappings of “success” come with a hefty price tag, one that cannot be easily be borne by most people regardless of their income level.
The only difference between the wealthy and the rest of the world is that when faced with foreclosure, those with money often find an experience lawyer to help them. They are well-versed in the defenses available to them in a foreclosure proceeding, and can use this information to their advantage.
As the information playing field is leveled, however, more and more American consumers are standing up for their rights and keeping the pressure on the mortgage servicers. And at the end of the day, the person in jeans will stand next to the one in the Armani suit. Armed with the knowledge of their rights, they will both prevail against abusive mortgage servicers.
If you enjoyed this post, make sure you subscribe to my RSS feed!
Thinking Of Walking Away? Don’t Do It!
April 18, 2008
Reuters it reporting on the recent phenomenon of “walking away.” It’s what happens when you just pack up and leave the house before the foreclosure is finished. Increasing numbers of Americans are simply walking away from their houses and mortgages.
Reuters claims that rapid house price falls in many parts of the United States will soon leave as many as one in five borrowers owing more on their loan than the house will fetch, removing at a stroke the single most powerful incentive to keep up with payments.
If you enjoyed this post, make sure you subscribe to my RSS feed!
Staten Island Foreclosure Problem In Sharp Focus
April 14, 2008
Blackford Avenue on Staten Island, tree-lined and filled with newly built two-story town houses worth $300,000 to $400,000, is the epicenter of the Staten Island foreclosure problem.
On two tiny blocks in the Port Richmond neighborhood, eight houses are in foreclosure and five other families have received formal notices from banks informing them they are in danger of the same.
In the first quarter of 2008, 174 foreclosures were filed on Staten Island - the highest per-capita rate of any borough, up from 34 foreclosures in the same period last year, according to data compiled by PropertyShark.com, a real-estate search Web site.
Many of these homeowners took out subprime loans almost $100,000 more than the price of their homes to cover interest payments. Worse still, many did so with hardly any down payment.
The New York Post details the story of Desiree Figueroa and her husband, whose 172 Blackford Ave. townhouse was seized by Option One Mortgage and sold last week. They purchased their home for $445,000 less than two years ago from a developer. Neither had owned property before. “I never thought they’d let me have the house because my husband and I have such bad credit,” says Desiree.
But shock of shocks, the couple was approved for a subprime loan with a down payment of only $5,000. They took out a first and a second mortgage. When home prices in the area dropped, the Figueroas quickly owed more than their house was worth. Six months after closing, they fell behind on the mortgage.
The bank took over the house, and it was resold - for $375,000.
Now the Figueroas - who rent a smaller home across the street at 153 Blackford Ave. for $1,700 a month - are filing for bankruptcy because they can’t pay back the money they owe to the mortgage company.
What the Figueroas didn’t know is that Option One, a major subprime mortgage company, didn’t even own their mortgage when it foreclosed on them. Rather, Option One was merely the servicer for a large investment pool - the pool that really owned the mortgage. Had the Figueroas taken action and defended the foreclosure, they may have been able to force Option One to re-negotiate their loan to a more affordable amount. Even had this not been the case, they could have gained significant additional time in the house without paying their mortgage.
If you enjoyed this post, make sure you subscribe to my RSS feed!