Nationwide Foreclosures Up 6% Over Last Year

The number of U.S. homes lost to foreclosure surged in July, another sign lenders are moving quicker to take back properties from homeowners behind in payments. Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009, foreclosure listing firm RealtyTrac Inc. said Thursday. Banks have stepped up repossessions this year to clear out the backlog of bad loans. July makes the eighth month in a row that the pace of homes lost to foreclosure has increased on an annual basis.

Meanwhile, homeowners who are falling behind on their payments are being allowed to stay in their homes longer because lenders are reluctant to add to the glut of foreclosed homes on the market. The number of properties receiving an initial default notice – the first step in the foreclosure process – rose 1 percent last month from June, but tumbled 28 percent versus July last year, RealtyTrac said. Initial defaults have fallen on an annual basis the past six months.

The latest data reflect a foreclosure crisis that continues to drag on as many homeowners struggle to make their monthly payments amid high unemployment, slow job growth and an uneven rebound in home prices.
Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures. Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can't qualify or fall back into default.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 percent, or about 530,000 homeowners, have fallen out of the administration's main effort to assist those facing foreclosure. That program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners, or 30 percent of the 1.3 million who have enrolled since March 2009. Still, RealtyTrac estimates more than 1 million American households are likely to lose their homes to foreclosure this year.

In all, 325,229 properties received a foreclosure-related warning in July, up 4 percent from June, but down 10 percent from the same month last year, RealtyTrac said. That translates to one in 397 U.S. homes. The firm tracks notices for defaults, scheduled home auctions and home repossessions – warnings that can lead up to a home eventually being lost to foreclosure. Among states, Nevada posted the highest foreclosure rate in July, with one in every 82 households receiving a foreclosure notice. The number of properties in Nevada receiving a foreclosure warning last month rose nearly 7 percent from June, but fell nearly 30 percent from the same month last year. Rounding out the top 10 states with the highest foreclosure rate last month were: Arizona, Florida, California, Idaho, Michigan, Utah, Illinois, Georgia and Maryland. Las Vegas continued to be the city with the highest foreclosure rate in the U.S., with one in every 71 homes receiving a foreclosure notice in July – more than five times the national average.

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Well known for sale by owner firm files for liquidation

Florida-based company that helped for-sale-by-owners market their properties around the country has reportedly filed for liquidation.
Buy Owner of South Florida Inc., which does business as Buy Owner, has turned over its assets to Michael Moecker & Associates, an auction firm that liquidates insolvent companies, DailyBusinessReview.com reported.

The auction firm says that it will continue operating the BuyOwner.com website and provide services to consume in order to pay off creditors.

The Deerfield Beach-based company does business in 10 markets, including Miami, Chicago, Dallas and Atlanta, Daily Business Review reported.

By Owner was established in 1984 and claims to be the first "by owner" company to provide nationwide radio, television, and magazine publications.
Buy Owner promises to provide exposure for clients' properties through an "ultra-aggressive advertising campaign" that includes highway billboards, television commercials and Internet advertising.  The majority of the home sellers who use Buyowner end up using a Realtor to sell their home and end up wasting time and money.

Buy Owner operates corporate offices and authorizes franchises, which it says distinguish the company from networks of "real estate agents just trying to make some extra money by associating themselves with a 'by owner' name."

Buy Owner and 18 affiliates filed an assignment for the benefit of creditors, or ABC filing, on July 26 in the Broward County 17th Judicial Circuit of Florida, DailyBusinessReview.com reported. An ABC liquidation is an alternative to filing for bankruptcy in federal court.



Buy Owner reportedly settled a class-action lawsuit last year that required it to pay refunds to many clients who were clients between 2002-08. The lawsuit alleged that Buy Owner hadn't allowed clients to cancel contracts, the story said.

Buy Owner reportedly owes more than $3.9 million to its only secured creditor, and $1.2 million in back wages to executives.



CEO Scott A. Eckert and other members of the Eckert family involved in running the company resigned on July 23, the publication reported.

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The Wall May be Cracking - Bank America to Reduce Mortgage Principal

Bank of America under pressure to keep distressed borrowers from losing their homes, said Wednesday that it would begin forgiving some of their mortgage debt. While limited in scope and by invitation-only, the program is a significant shift in efforts to assist the four million homeowners who are facing foreclosure.

 It comes as banks and the Treasury Department are under growing pressure from the Obama administration, lawmakers and community groups to stem the foreclosure tide.

With the housing market entering another period of stress, worries about foreclosure are compounded. As the volume of sales drops, prices start to slide as well. When the gap keeps increasing between the size of a mortgage and the value that the home could fetch from a buyer, owners tend to give up.

“Banks are willing to take some losses now to avoid much greater losses later if the housing market continues to spiral, and that’s a sea change from where they were a year ago,” said Howard Glaser, a housing consultant in Washington and a former H.U.D. official.

The Bank of America program is intended for owners who received loans from Countrywide, the biggest and one of the most aggressive lenders during the housing boom. Bank of America bought Countrywide in 2008.

Bank of America executives said the program would work this way: A borrower owes $250,000 on a house now worth $200,000. Fifty thousand dollars of that balance would be moved into a special interest-free account.

As long as the owner continued to make payments on the $200,000, every year $10,000 in the special account would be forgiven until either the balance was zero or the housing market recovered and the borrower once again had positive equity.

“The time has come to test this sort of program,” Jack W. Schakett, who heads credit loss mitigation strategies at Bank of America, said in a briefing. “Modifications are better than foreclosure.”

That was the original notion behind the government’s modification program, which was originally touted as helping millions of borrowers but has resulted in permanently improved loans for less than 200,000. The program, which stresses reductions in interest rates, was criticized Wednesday by the special inspector general for the Troubled Asset Relief Program for over-promising and under-delivering.

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Freddie Mac Announces Two Chicago Area Foreclosure Help Centers

Today, Freddie Mac, the giant government sponsored 9now owned) enterprise that underwrote billions in residential mortgages, announced that is is opening two Chicago help center to assist local homeowners facing foreclosure.  The centers will assist homeowners with the often frustrating process of loan modification.  The two groups involved with the Freddie Mac effort are Latin American Community Housing Association located at 1152 N Christiana Avenue and Neighborhood Housing Services of Chicago Inc. located at 1279 N Milwaukee Avenue.  The hope of both groups is that their intervention on behalf of homeowners will result in more modifications and allow many more homeowners to survive foreclosure.

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Mortgage Lenders Have Your Money - $18 Million in Cook County

Today it was reported in the Chicago Tribune that Cook County Circuit Court Clerk is holding $18 Million for 1,900 people who have had their homes foreclosed over the past year.  How can this be?  Well, prior to the real estate bust, when home prices were still stable, homes sometimes sold at foreclosure auctions for more than the amount due to the mortgage lender on the loan.  If the homeowner did no step forward in the lawsuit and claim the money, those funds were then turned over to the Cook County Circuit Court for safekeeping.  You can search the Clerk's online database at www.chicagotribune.com/default or call 312-603-5030. See the complete Tribune story here: http://www.chicagotribune.com/news/local/chi-englewood-foreclosureaug25,0,1445727.story

A few words to the wise: Never pay anyone to recover money on your behalf.  There are plenty of scammers that just want a cut of your money.  When you are due money from the state, county or city, ask for help   at the place where your money is held.  Most are helpful in helping you complete any paperwork required o get your money returned. Check out the State Treasurer's Tips of Dealing With Finding Firms.

Search the State of Illinois' database for unclaimed funds at Cash Dash and follow the online instructions.  State Treasurer Giannoulias is holding millions of dollars in unclaimed funds.  At the linked site you can search for your name or that of someone you know.

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