All Articles Tagged "housing crisis"
Foreclosures are still a major problem in the United States. In fact, as Business Insider reports, foreclosure data from RealtyTrac shows that one in every 905 U.S. homes received a foreclosure filing in April. While these numbers have dropped significantly—23 percent from a year ago—there are pockets of America that continue to get hit hard with foreclosures.
Business Insider listed the 14 metro areas with the highest foreclosure rate.
On the list were such cities as Chicago-Naperville-Joliet and Myrtle Beach, Florida. Ohio made a few appearances on the list as well, including Cincinnati, Cleveland, Toledo and Akron. In that last city, one in every 211 homes received a foreclosure filing in April 2013. There are currently 1,481 properties in foreclosure. This represents a 97.99 percent increase from March and an 146.83 percent boost from last year. In Columbia, SC, 1 in every 415 homes received a foreclosure filing in April 2013. Some 789 properties had foreclosure filings. This marked a whopping 210.63 percent increase from March and an 189.01 percent boost from April 2012.
Miami-Fort Lauderdale-Pompano Beach also made the list. In April 1 in every 269 homes received a foreclosure filing. The total properties in the area with foreclose filings were 9,127. Here, there was a drop—17.61 percent–from March but 1.06 percent increase from the previous year.
The crisis is pronounced across the board, with the impact hitting the level of wealth among African Americans particularly hard. The level of homeownership in this country has hit the lowest point since 1995, according to Reuters, to 65.2 percent. Among the banks with the most foreclosures, says The Huffington Post, are SunTrust, PNC, and HSBC. HSBC, for instance, has 16,317 homes in foreclosure with 60 percent of them “seriously under water.” That bank reached a $249 million settlement earlier this year after complaints that the bank wrongly foreclosed on tons of homes.
(Businessweek) — For sale or rent by distressed owner: 248,000 homes. That’s how many residential properties the U.S. government now has in its possession, the result of record numbers of people defaulting on government-backed mortgages. Washington is sitting on nearly a third of the nation’s 800,000 repossessed houses, making the U.S. taxpayer the largest owner of foreclosed properties. With even more homes moving toward default, Fannie Mae (FNMA), Freddie Mac (FMCC), and the Federal Housing Administration are looking for a way to unload them without swamping the already depressed real estate market. Trouble is, they haven’t figured out how to do that. The government admitted as much in August, when Fannie, Freddie, and FHA issued a joint plea to the public for ideas about how to solve the problem. (Give it your best shot: You have until Sept. 15 to submit ideas to email@example.com.) “They’re stuck,” says Karen Shaw Petrou, managing partner of Federal Financial Analytics, a Washington-based consultant that advises banks and other clients on government policy. “They don’t know what to do.”
(Wall Street Journal) — The threat of losing your home is stressful enough to make you ill, it stands to reason. Now two economists have measured just how unhealthy the foreclosure crisis has been in some of the hardest-hit areas of the U.S. New research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University shows a direct correlation between foreclosure rates and the health of residents in Arizona, California, Florida and New Jersey. The economists concluded in a paper published this month by the National Bureau of Economic Research that an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49. Each rise of 100 foreclosures was also associated with 12% more visits related to anxiety in the same age category. And the same rise in foreclosures was associated with 39% more visits for suicide attempts among the same group, though this still represents a small number of patients, the researchers say.
(Washington Post) — The D.C. Council enacted emergency legislation Tuesday to amend a controversial clause in its foreclosure mediation law that threatened to stall the sale of foreclosed affected homes across the city. The move came just days after The Washington Post reported that two large title insurers, which account for nearly 80 percent of the D.C. market share, stopped insuring sales of foreclosed homes because of concerns over the law. The change will make it easier for buyers of foreclosed homes to obtain loans, because title insurance, which protects mortgage lenders from challenges to their rights to a property, is an essential ingredient in the home-buying process. That, in turn, could help stabilize District prices by speeding the sales of homes in the foreclosure pipeline.
(Businessweek) — You might be tempted to believe that after four years of brutal declines in home prices, the worst of the crisis is over. The Standard & Poor’s/Case-Shiller 20-city index of prices has fallen back to where it was in 2003. Housing prices in Phoenix are at 2000 levels, and Las Vegas is revisiting 1999. Lower prices have made homes more affordable than they’ve been in a generation, and sales have gone up in six of the past nine months. “It’s very unlikely that we will see a significant further decline” in prices, Housing and Urban Development Secretary Shaun Donovan said in a July 3 appearance on CNN (TWX). “The real question is, when will we start to see sustainable increases? Some think it will be as early as the end of this summer or this fall.”
(Huffington Post) — With the nation in the grips of a punishing foreclosure crisis, one local program has found success in allowing struggling borrowers to stay in their homes. A Philadelphia initiative started in 2008 requires the two parties in a foreclosure case to meet face-to-face and attempt to reach an agreement. That tactic, it turns out, can work. Of the homeowners who made deals through the program, nearly 85 percent are still in their homes 18 months later, according to an independent analysis released Tuesday. The results offer a glimmer of hope in a bleak national situation. Of the eligible homeowners contending with foreclosure in Philadelphia, 70 percent went through the Residential Mortgage Foreclosure Diversion Program, and a third of those borrowers reached agreements with their mortgage companies to allow them to stay in their homes, according to the study from the Reinvestment Fund, a Philadelphia-based community investment group.
By Charlotte Young
After the housing industry crisis in 2008, there was a nationwide recognition that the credit rules needed to be changed. But the new proposed credit rules are threatening to shut down the home-ownership dreams for potential low-income buyers altogether.
MSNBC reports that the rules are jointly proposed by the Federal Reserve, the Department of Housing and Urban Development, the FDIC, the Federal Housing Finance Authority, the Office of the Controller of the Currency and the Securities and Exchange Commission.
Among many of the proposed regulations for “Qualified Residential Mortgages,” borrowers need a 20 percent down payment and debt cannot exceed more than one-third of the borrower’s income.
A combination of mortgage lenders, consumer advocates, housing industry officials and lawmakers have formed a coalition to oppose the rules.
Critics claim that minority and first time home-buyers will be charged higher prices to borrow money and families in high-cost markers will have to come up with more money to meet the 20 percent down payment requirements. The housing market will face a significantly smaller pool of potential, credit-worthy home buyers just as it’s struggling to recuperate.
Opponents also fear that the new rules would “create a two-tiered mortgage market.” Borrowers with larger savings will pay less as those struggling to save are faced with higher charges.
A JP Morgan report estimates the disadvantage could add up to about 3 percentage points, which could be the difference between an affordable mortgage payment or continuing to pay rent.
While the regulators gave no comment on the proposed rules, they have extended the comment period from Friday to August 1, in efforts “to allow interested persons more time to analyze the issues and prepare their comments.”
(Time) — A just-released study aims to get inside the minds of underwater homeowners and predict who is most likely to default on purpose. Certain owners, the study found, are 110 times more likely to strategically default—i.e., stop paying the mortgage even if they have the money to keep paying. This sort of data has got to be pretty interesting to mortgage lenders. The study, from credit-scoring system FICO, lists several homeowner characteristics that indicate a higher likelihood of walking away, including a shorter length of residency (so there’s less emotional attachment). Interestingly enough, however, what homeowners likely to strategically default have in common is that they’re generally pretty smart and responsible with their money.
(AP) — There’s only one way in to Windy Ridge — across freight train tracks that zipper up the subdivision on three sides. Living room windows offer views of a cardboard box factory and a Pepsi bottling plant. It’s an unlikely place to come looking for the American Dream. But to appreciate Wigena Tirado’s bond with this neighborhood of 133 vinyl-sided starter homes planted on a mostly treeless slope, listen to how she got there. Tirado, a divorced mother of four with a degree in social work, moved to North Carolina in 2003 searching for a job and counting on a Section 8 low-income housing voucher to cover most of her rent. She moved out of her first home after finding a bullet hole in the front door. She fled the next rental, too, after it was burglarized at 2:30 on a weekday afternoon. By then, Tirado was teaching at a daycare center. She jumped at one mother’s suggestion that she rent the house across from her own. The three-bedroom house, white with blue shutters, sat on a new street with lots awaiting construction. Tirado liked her neighbors. Her biggest doubt was raised by cards that arrived in the mailbox offering help in battling foreclosure. Tirado’s landlord told her not to worry. But in early 2007, a Mecklenburg County sheriff’s deputy rang the doorbell.