Reading this article can bring some alarming thoughts to mind, of which might include... "We're 3 years deep in a recession, and they're telling us the mortgage crisis is only getting worse..." or "These relief acts are only putting a thumb in the damn...", or, if you're like me, "There's going to be a HELLof a lot of foreclosures through 2010-2011.".....
Whether you specialize in Short Sales, pre-foreclosures, or auctions, "sharpening your blade" in whatever area of expertise you choose is going to keep you afloat, and help you succeed through the next few quarters. It's one thing to have mounting foreclosures, but with unemployment rising, and the first and second waves of relief acts enacted by the new presidency showing to be less then monumental, there is going to be an entire community of FTHB's, investor buyers, and home sellers that need our help.
What do you guys think of this article? Does it worry you? Or does it seem like it will help your business? Let me know your thoughts, I'd love to hear your feedback!
(Please note this article is copyright of MSNBC and it's authors)
By John W. SchoenSenior producer msnbc.com updated 38 minutes ago
After months of dead ends, rejections and runarounds from bank representatives, Dan Binder is still in loan modification limbo.
When Binder lost his job as a media researcher, he and his wife left their southern California home in July 2008 and relocated to North Carolina where he found a new job in the media business.
Since then, he's never missed a payment on the three-bedroom home in Riverside County, Calif., he said, though it's lost about half its value since he bought it in 2005 for $418,000. When his wife lost her job after the move, he called his lender, Wells Fargo, to see if the bank could rewrite the loan to lower the monthly payments.
Falling home prices also destroy billions of dollars of consumer wealth as homeowners watch their home equity evaporate. That loss of consumer spending power creates another major headwind to any economic recovery.
The collapse of home prices in high foreclosure neighborhoods also slows economic activity by forcing owners to make tough choices when they sell their house. Readers in high-foreclosure areas report that they're unable to relocate for a new job, buy a bigger house for an expanding family or downsize for a planned retirement because they can't afford to sell their home at a loss.
When Carol Hardee's daughter Laura died last year, she faced an uphill battle selling the daughter's Atlanta home, which was purchased in 2000 for $150,000. In February Hardee got an offer for $140,000. But with so many foreclosed properties in the neighborhood, the appraisal came back at just $75,000, and the deal fell through.
Since then, he said, he's gotten conflicting responses from multiple bank representatives, one of whom said he was days away from a new loan that was subsequently rejected.
At one point, after assurances that he submitted all the appropriate paperwork, he was told a form was missing. When he provided it, he was told the remaining paperwork was more than 30 days old and he would have to update and resubmit each document. At another point, he said, he was told his file showed a sizable credit card debt he didn't owe.
After his latest rejection he asked for an explanation.
"They said the notes from the investors (holding the mortgage) said, ‘You spend too much on food,' " he said.
If all this sounds familiar, it's because homeowners around the country have been jumping through similar hoops with the same fruitless results.
Nearly two years after the federal government's first program to slow the relentless rise in the pace of home foreclosures, the latest attempt, known as Making Home Affordable, is turning out to be another painful disappointment for millions of Americans at risk of losing their homes.
Dozens of e-mails from msnbc.com readers report months of futile effort to modify their loans. The list of problems includes misdirected calls, lost paperwork and conflicting advice from multiple representatives for the same lender.
A Wells Fargo spokeswoman said the company can't comment on individual customer's loans due to privacy restrictions. But she said the company is "working with all of its customers who experience hardships and need assistance with their mortgage payments up the point of actual foreclosure sale."
"As the government guidelines have changed and as we have gotten more options to help people, there has been some communication confusion that we are working to absolutely get on top of and correct for customers," she said.
HUD-approved housing counselors - the frontline professionals trying to help borrowers modify mortgages - have expressed frustrations with a variety of roadblocks, bureaucratic snafus and ongoing confusion about the program.
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"Even if (the homeowner) gets hold of somebody, that person might not necessarily understand the complexity of (the program)," said Helene Raynaud, an executive at the National Foundation for CreditCounseling, an umbrella group that certifies and sets standards for housing counselors. "Counselors end up talking to different people as well, which makes it very difficult. Depending on who they talk to, and the level of seniority and the level of training and the different servicers (they deal with), they get completely different outcomes."
Downward spiral
Despite recent signs of a bottom in the housing market, the pace of foreclosures shows no signs of slowing.
More than 13 percent of homeowners with a mortgage are either behind on their payments or in foreclosure, the Mortgage Bankers Association said Thursday. As of June, more than 4 percent of all borrowers were in foreclosure and about 9 percent had missed at least one payment. A separate report found that more than 272,000 borrowers were at some stage of foreclosure in July, up 8 percent from June and 55 percent from July 2007, according to RealtyTrac, which maintains a national database of foreclosure filings.
The continuing rise in foreclosures delays any meaningful recovery in the U.S. economy, in part because housing typically leads the economy out of recession. Although there have been recent signs of life in home construction and housing sales, they have been weak and from extremely depressed levels. Every new foreclosed home increases the unsold inventory on the market and cuts into demand for new construction.
Foreclosed homes sold in distressed sales or auctions also push nearby home prices lower. Unless the pace of foreclosures can be slowed or stopped, millions more homeowners who are current on their loans will be forced "under water" - owing more than their house is worth. Those homeowners become new candidates for default. One recent research report from Deutsche Bank estimates that roughly half of all U.S. homeowners will be under water by 2011.
For the rest of the article, please visit http://www.msnbc.msn.com/id/32479139/ns/business-reinventing_america/page/2/
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