According to First American CoreLogic one in ten Californian’s with a home loan are now in default, this means they have missed several payments are close to facing foreclosure. As a result of the rise of defaults experts believe there will be a number of foreclosures in the near future as un-employment rates continue to increase. This figure brings the default rates up to 9.5%, a year ago it was only 6%.
Many believe that in regard to the housing market we have hit the bottom, as home prices have fallen low enough around the Country to encourage home buying. According to an article in New York Times, “for the first time since early 2007, a composite index of 20 major cities was virtually flat, instead of down.” Many believe this plateau will lead to an increase in housing prices in the near future and in time a recovered housing market.
With more homeowners falling in to foreclosure during these tough economic times President Obama is encouraging mortgage firms to pick up their step and complete more loan modifications. The Obama administration wants to see 500,000 trial modifications in place by Nov. 1. Currently, 200,000 are underway.
Last month Obama said, “Our mortgage program has actually helped to modify mortgages for a lot of our people, but it hasn’t been keeping pace with all the foreclosures that are taking place.” It’s clear that the government is overwhelmed by the number of loans defaulting.
About 250 California Hotels are in default or foreclosure according to the Irvine consulting firm Atlas Hospitality Group. Los Angeles County has been hit the worst with 27 troubled hotels, among them is a 469-room Marriott in Downtown Los Angeles.
A man abandoned his house of cats after losing his home to foreclosure in Lakemore, Ohio. The man reportedly left behind over 100 cats and one awful smell. For the last two weeks rescuers have been chasing cats around the home, many of them were hiding under furniture, in closets, cabinets, and in the heating ducts. “Cat rescuer Eric Schickendantz said he had to put on protective gear before shoveling cat waste off the floors and disinfecting the place.”
Many believe that housing prices in California may have finally hit bottom, as the median price has begun to rise in the last month. Not only are the home prices rising but foreclosure sales represent less than half which is a first for almost an entire year.
Many warn this might not last as California’s unemployment rate continues to increase at an alarming rate as well as the mortgage default rates in California. In addition the median price is still much lower then it was only a few years ago. So whether this increase can be take as a sign of recovery is still debatable. Another surge in foreclosures could cause the housing market to fall again.
Many condo owners are beginning to complain that their homeowner association fees are increasing, the reasoning: foreclosure. Condo owners have seen their fees raise several hundred dollars per month because their neighbors have been unable to make the association fees or their payments. The Boston Globe explained, “When condo owners facing foreclosure stop paying their fees for shared costs such as maintenance and insurance, condo associations struggle to pay bills. And sometimes other condo owners are forced to pay higher fees to cover their neighbors’ debts.”
Needless to say condos may not be the soundest investment in these rocky times particularly in areas that have been struck so hard by foreclosures.
New housing development is up for the first time since November. According to the Commerce Department this is a signal that the housing market is beginning to re-cooperate although many still believe there worse isn’t over.
Some believe that the new housing development has a lot to do with the drop in mortgage rates, and the new tax credits for home buyers (The federal program, which offers a $8,000 tax credit to first-time home buyers, is set to end on Dec. 1). “New home buyers have been helped into the market,” said Celia Chen, a housing economist at Moodys.com. “I think they’re building in advance of when that tax credit expires.”
On November 15th you can board a cruise ship in Florida for a Life Modification Cruise. The cruise includes seminars which are designed to prepare people for life after economic meltdowns in real-estate and other financial markets.
According to Joseph Hoats, “Consumers have found themselves with less wealth as real estate and stocks have plummeted, incomes have been reduced, retirement portfolios decimated and lives have been turned upside down. We address all the financial and legal issues with solutions, putting consumers back on the road to prosperity.”
The creator of this program explained that it doesn’t matter what your financial problem is, “reduced income, IRS problems, heavy unsecured debt, asset erosion, even pending Foreclosure…Life Modification Cruise is an event that can help end the pain and give you a plan for the rest of your life.”
Hopefully you are not too far in debt because the cruise that will get you back on your feet cost $500 per person.
Almost 15 million people are upside down on their mortgage and very few loan modifications are actually being completed, as a result Treasury Secretary Timothy Geithner sent a letter to the 25 biggest mortgage servicers encouraging them to process more loan modifications. The letter also details a meeting to be held on July 28. The letter states: “…there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share.”
Whether this will be a successful move on Geithner part is still unclear as many lenders are being bombarded with loan modification requests. The completion of a loan modification is not the easiest of tasks leaving many lenders dragging their feet.