admin on January 9th, 2009
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An often overlooked aspect of the nation’s foreclosure crisis is the displaced homeowner after the foreclosure is final. There is a moment of finality for the fight to keep a home, but the perils of momentary homelessness are just the beginning of their problems. Additionally, the financial conditions that lead to the foreclosure may be far from over for the homeowner after the auctio
Other than children changing schools and the lack of cash to even seek legal advice, the first priority to the foreclosed homeowner is to find a new home. However, without cash for a rental security deposit or decent credit scores to verify creditworthiness, a foreclosed homeowner may discover finding a place to live difficult. Many municipalities offer counseling to assit in finding affordable housing and information on non-profit credit counseling agencies. Foreclosed homeowners with FHA insured mortgage may qualify for $1000, if they voluntarily vacate foreclosed homes in good physical condition. Statistically, foreclosed homeowners do become homeowners again, but re-establishing credit is difficult in financially restrictive times and can often take as much as two years. Millions of homeowners are currently fighting foreclosure, but hundreds of thousands have lost their homes and are facing increased challenges as the economy is predicted to worsen.
admin on January 6th, 2009
The Department of Housing and Urban Development (HUD) has begun issuance of $4 billion in housing aid to assist local governments revitalize communities hardest hit by the nation’s still growing foreclosure crisis. Municipalities are receiving the financial aid to buy, rehabilitate and resell foreclosed homes in low to middle income areas.
The Neighborhood Stabilization Program was implemented by Congress to help local areas prevent further devastation to communities because of the high number of foreclosures. Areas like Los Angeles have over 18,000 foreclosed homes, but the $18 million portion it receives from HUD will only buy about 300-400 homes. Although the money will not stop the foreclosure crisis, it can bring a ray of hope to communities seeing property values drop and an increased entrance of crime and dilapidation in once vibrant neighborhoods due to the growing number of empty homes.
Economists are expecting the foreclosure rates to increase in 2009. Congress and the new White House administration are expected to act quickly to develop an economic stimulus plan to provide further assistance to homeowners and states suffering through the economic crisis. HUD has placed some stipulations on the aid it is providing to the states requesting this financial assistance. The money must be spent in low- to middle-income communities and the buyers of these properties must be within income standards set by the area’s median income range. To prevent misuse of the funds, states receiving money must have previously submitted plans for the money and use the money within 18 months.
admin on January 6th, 2009
Lehman Brothers employees and retirees have suffered a loss in a stable-value fund within their retirement plan because of a lack of fund insurance. Lehman Brothers filed for the largest bankruptcy in US history in September of last year. As a consequence of the bankruptcy filing, Lehman had to drop insurance it held against losses within its retirement plans.
Lehman holds approximately $2 billion in retirement funds and $239 million of that fund was invested in stable-value funds offered by Invesco Ltd. Although the loss was relatively low at 1.7%, it was the first time in 14 years a stable-value fund had loss money. Additionally, the lack of fund insurance will not protect investors against the fund’s loss. Stable-value funds are viewed as conservative security holdings and over $400 billion dollars are currently held in US retirement funds. Lehman Brother employees and retirees are the only investors affected by the fund loss.
admin on January 5th, 2009
The mortgage meltdown has affected more than just homeowners as renters are forced out of foreclosed homes. The record number of foreclosures throughout the nation has caused a drag on the rental community as well. Statistics show that 40 percent of
the nation’s renters lease a single family home from private homeowners. While most homeowners-turned-landlords, conduct a background check on prospective tenants, it is difficult to find information on a homeowner’s history. Oftentimes tenants are not sure of the owners and only qualify whether to move into a home by the home’s appearance, rental amount and neighborhood and as a result thousands of tenants are losing their rented homes to foreclosures.
Mortgage giant Fannie Mae has initiated a program to aid these displaced renters by allowing them to sign a new lease with Fannie Mae or provide financial relocation assistance. Freddie Mac is set to unveil a similar service shortly. However, only tenants renting a home that is mortgaged by Fannie Mae or Freddie Mac will be able utilize the new program. Some states have begun to implement plans to assist the renters facing eviction from a foreclosed home. Municipalities and hosuing authorities are also turning displaced tenants to housing non-profit groups for counseling and assistance in homeowner background checks before signing a new rental lease.
