Archive for the 'Foreclosure Information' Category

The ever-growing joblessness and the unabated number of repo homes in Rhode Island have caused some experts to predict that the state’s economic recovery will not happen anytime soon.

The continuing economic recession is expected to have a ripple effect on various sectors in Rhode Island, especially the housing market.

More foreclosures would mean another record low market value. This does not bode well to the state which has been suffering from the effects of the repo homes crisis for more than two years now.

According to real estate analysts, the state is also experiencing the devastating effects of high unemployment rate which is pegged at 11.1 percent, making Rhode Island the fourth highest in the country in terms of joblessness.

Also hindering the economic recovery of the state is the types of employment experiencing massive layoffs. An estimated 5,100 workers were laid off in various factories in the state in 2008.

And most of the workers who were laid off last year are not expected to be rehired. Employment in the manufacturing industry declined annually since 1990, with about 7,000 workers joining the list of unemployed since economic recession hounded the country.
And experts agree that the higher the unemployment rate, the greater is the repo homes crisis. There is a big possibility that the construction industry will be revived as state residents start to buy and build homes and local businesses can borrow money again for expansion.

However, economists are not that optimistic that the number of jobs that will be created in the construction industry is enough to cover the number of jobs lost since the start of the recession and the repo homes crisis.

This sentiment of economists is reiterated by state Labor Secretary Hilda L. Solis who said that many people lost their jobs and there is no evidence that they will be rehired. She expressed this sentiment as she announced a $750 million program to prepare workers for technology, renewable energy and health care jobs.

Meanwhile, Moody’s economist Andres Carbacho-Burgos said that the recovery of Rhode Island will be slower compared with other areas in the country. And he blamed the manufacturing sector to the slow recovery of the state.

Experts predict that Rhode Island’s job market will not fully recover from the economic recession until 2013. And until then, repo homes crisis will also continue to complicate the state’s recovery.

The number of completed repo homes for sale deals in California increased at a significant rate in April, particularly in the counties of Riverside and San Bernardino. And together with the increase in completed repo homes for sale deals was the decline in home prices, albeit at a slower pace than the speed of home sales.

However, industry experts warned against reading too much in the increase in home sales and the decline in home market prices.

Egan-Jones Ratings head of mortgage research Inna Koren pointed out that investors are concerned over the increasing foreclosure rates in Southern California.

She said that investors are not expecting another dramatic decline in real estate prices in California until 2011. She explained that there is a possibility that the housing market in the state is nearing its bottom, but it does not yet indicate a recovery. She believed that the complete recovery of the housing market will depend on what the government would ultimately do.

John Husing, an inland economist, echoed Koren’s sentiment adding that home market prices were showing some signs of stabilization.

Meanwhile, real estate agents are thinking of the possibility that a single home could receive multiple offers within a few days of being placed as repo homes for sale. Adding to their optimism of a fast home sale is the low interest rates which could attract any potential homebuyer.

However, many real estate agents believed that the housing market is far from recovering, with an anticipated second wave of foreclosures in the coming months and its impact on the economy continuing to be a big concern to the industry.

Century 21 Superstars real estate agent Mark Magana pointed out the large volume of repo homes for sale. He said that the home price trend will depend largely on how banks handle the inventory. He added that if banks will flood the market with foreclosed properties, the prices will surely drop.

Meanwhile, house sales in the county of San Bernardino surged by 88 percent last April compared with the same month a year ago. In Riverside, home sales rose by 40 percent for the same period.

Industry experts are quick to point out that distressed properties accounted for most of home sales in the state. And many people are buying repo homes for sale because they thought that they are getting bargains.

The increasing number of repossessed house and unemployment in the country has severely affected the economy, particularly low-income, minority families. According to data from the National Low Income Housing Coalition, some of the victims of the foreclosure crisis do not even own the foreclosed homes were they lived.

The coalition said that nearly 20 percent of houses facing foreclosures last year were rentals. It pointed out that foreclosed rental homes are prevalent in poor communities dominated by colored people.

And in some states, the foreclosure crisis has even complicated the lives of colored people who are renting the homes where they live because of the lack of law that protects tenants from sudden eviction.

According to the National Alliance to End Homelessness, if the recession will continue at its current rate, homeless people will increase to 1.5 million in the next two years.

Additionally, the First Focus advocacy group said that about two million children will be affected by subprime mortgage foreclosures, including about 500,000 Latino children and over 280,000 Black children.

On the other hand, results of a school system national survey showed a surge in the number of homeless children this school year compared with the previous year.

And as families evicted from repossessed house struggle to overcome poverty and the lack of affordable housing, so is the social service systems which suffer from deep cost cutting and budget reductions. Most programs under the shelter system are designed for single individuals, leaving most families out in the cold.

Experts agree that the federal stimulus program to address homelessness could not cope up with the increasing number of homeless people due to unabated foreclosure and massive layoffs. Some federal efforts to address homelessness are the $70 million educational assistance for youth who are homeless and the $1.5 billion Emergency Shelter program of the U.S. Housing and Urban Development.

Most families seeking homes complained that they were restricted access to shelters because most of these facilities prohibit children or have set up age restrictions. And some families would rather sleep on the street than take the risk of separation from one another.

Government programs for homeless people target only shelter or street homeless. This means that children who are living in motel rooms may be eligible for educational assistance but their parents may not qualify.

To address the impact of the repossessed house crisis, some community organizers are exposing the excess and scarcity in the housing system by launching civil disobedience campaigns to encourage homeowners of foreclosed properties to remain in their homes in protest.

Three of the nation’s biggest banks, JPMorgan, Goldman Sachs and Morgan Stanley, who received huge bailout money from the federal government a few months ago as the nation was reeling from the effects of foreclosed homes auctions are now swaggering with their statement that they are now able to repay the funds used to save them from collapse.

The National Housing Conference’s research affiliate, the Center for Housing Policy, has released the study, titled “Paycheck to paycheck: Wages and the cost of housing in America,” which showed a correlation between job stability and the capability to avoid house repossession.

The United States economy will get worse before it gets better is how Warren Buffet, the second richest man according to the October 2008 issue of the “Forbes” magazine, viewed the current economic scenario. He cited as indications of the worsening economic situation the declining business activity, increasing foreclosure homes and rising unemployment.

Over 60 percent of all properties, including repo homes, that were sold in the United States during the last quarter of the previous year were affordable. This means that a family earning $61,500 annually would allot equal or less than 28 percent of their income for housing payments.

Distressed homeowners are desperate to avail a loan modification to adjust rates, prolong their term, decrease their principal and absolve penalties. They will need a real estate professional so they can make the right decisions and save their home from repossession.

The administration has taken up drastic measures to mend the housing industry's great fall, foreclosure. Even the incoming Obama administration is strategizing against repossession. But these efforts may end up wasted if the main causes of foreclosure are not mended first.

If you have been diligently paying rent, there is no reason why you should bear the financial troubles of your landlord. Now, as Fannie Mae gains possession of the property you are renting, you will be allowed to stay and lease the home until it is sold to a new owner.