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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (750)	9/4/2001 8:54:56 AM
From: Tradelite	Read Replies (1) \| Respond to of 306849

re: foreclosures....more grist for the mill (Note that the story refers to foreclosures in "manufactured housing"---I guess that means mobile homes (trailers)????? This can be found at www.realtor.com ____________ Foreclosures Are Up, Don't Become A Statistic Economic woes, unaffordable loans and low down payments are contributing to a rash of mortgage delinquencies. Learn how to avoid losing your home to foreclosure. By Broderick Perkins DeadlineNews.Com The economy is pushing up foreclosures at an alarming rate, but you can avoid becoming a statistic and losing what's likely your most valuable asset. Mortgage Information Corp. says 0.16 percent of borrowers from the year 2000 have fallen seriously delinquent -- 90 days late -- on their mortgage payment. That's more than twice the rate of delinquencies from 1999 (0.07 percent) and three times as high as the 1998 rate, 0.05 percent. The San Francisco-based home loan repayment monitor analyzes 75 percent of all outstanding home mortgages and blames the softer economy, larger loans and low downpayments. Unemployment is up from below 4 percent last year to 4.5 percent this month and layoffs are forcing home owners to make choices with dire consequences. On the average, compared to previous years, more than twice as many home owners have larger mortgage debts ranging from $250,000 to $1 million. Low down payments have always been associated with higher delinquency and foreclosure rates. Those with small equity stakes may feel they have little to lose and walk away from the American Dream. It's why lenders require private mortgage insurance on loans of less than 20 percent down. Mortgage Information said 41 percent of borrowers in the year 2000 had less than 20 percent down on their home purchase. New borrowers from 2000 who took out "subprime" mortgages -- high-rate home loans designed for buyers with imperfect credit histories -- are performing worse, Mortgage Information says. Overall loan delinquencies on subprime mortgages are up 21 percent and are substantially higher than delinquency rates in the previous three years. Easy money shares some of the blame for putting the manufactured home buying market segment in a foreclosure tailspin. Likewise, more and more borrowers are piling on equity debt for the wrong reasons. Borrowers who refinanced home mortgages during the current refinancing boom piled on home-secured debt raising their first mortgage loan-to-value (LTV) ratio by an average of 6 percent, their first mortgage balance by $41,000, and their interest rate an average of 0.60 percent, according to the MGIC Capital Markets Group, a private mortgage insurance provider. Half of home owners who refinanced did it to pay off consumer debt -- credit cards, car loans and other debts -- not to lower their interest rate or shorten their loan term said MGIC. In previous refinancing booms from 1992-93 and from 1998-99, only 20 percent of borrowers refinanced to pay off consumer debt. Also taking a toll are so-called "predatory" mortgages -- high rate loans aimed at vulnerable credit-poor borrowers who may not be able to afford the loan they get. "The fact is, there are several positive options available to those facing foreclosure. Homeowners should view the foreclosure process, which lasts at least four months, as their window of opportunity to resolve financial problems and develop and implement a plan to stop the foreclosure," says attorney Lloyd M. Segal, author of "Stop Foreclosure Now in California," by Nolo.com a self-help legal information publisher on and off the Internet. Lenders can begin foreclosure when you miss your first payment, but most don't begin actual proceedings until after several months of consecutively missed payments. Sift through your original loan documents to learn what foreclosure procedure you face. Once the clock starts it's up to you to stop it before time runs out. Homeowners in default are able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying the mortgage off. Examine your foreclosure options Assuming you want to keep your home, here are some basic dos and don'ts to help you stop foreclosure. First, when you are faced with foreclosure, don't go extreme. Panicking or sticking your head in the sand isn't going to make the problem disappear. Your lender isn't in the real estate business of seizing and selling homes. It would rather you pay the note. Communicate with your lender -- in writing -- to establish a paper trail of evidence that you are trying to resolve the problem. Communicate with someone in authority, not the bill collector who is only after the back payments. Your first strategy should be to negotiate some workout to pay the arrears and make future monthly payments. Special programs are available for those with FHA, VA loans and others covered by state government programs. Ask your lender what's available for you. Consider refinancing the loan. That would both bring your loan current and pay off the lender before it forecloses. With today's lower rates it could also mean lower monthly payments. If you are in the military, you have special rights under the Soldiers and Sailors Civil Relief Act to stop the foreclosure and you may be eligible for a reduction in the interest rate. Procedural errors in the lender's foreclosure or lender errors when you acquired the loan could permit you to file a lawsuit to enjoin or stop the procedure. If all else fails, bankruptcy is an option that can stop foreclosure, at least temporarily, and give you some leverage to resolve it. Selling the property is an end-game option -- either selling the property out right as quickly as possible or deeding it to the lender in exchange for ending the foreclosure. "Stop Foreclosure Now" can help you decide when to use which option. Other foreclosure resources include: "How To Avoid Foreclosure" offers additional details about stopping the foreclosure process. The National Foundation For Credit Counseling, a network of non-profit consumer credit counseling offices offers information and assistance for those with credit and debt problems. The National Consumer Law Center a consumer law clearing house for assistance with consumer law. Jack Guttentag's The Mortgage Professor Web site with foreclosure information and calculators to help you determine what financial restructuring plan might work for you. Broderick Perkins, executive editor of San Jose, CA-based DeadlineNews.Com, has been a consumer and real estate journalist for 25 years. His award-winning work has appeared in major-market newspapers and Web sites.