Value of a foreclosed home

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There is great debate over values right now, and truthfully no one can really say what a home is worth with so many factors that affect cost being difficult to nail down. Here is an excerpt from an article from the government repo homes site on October 6,2009:

"The US is yet to recover from the economic crisis. People are faltering on loans after job loss – a phenomenon that has made foreclosures very common. Certain regions are riddled with foreclosures. Now the question that arises is what could be the value of a house in a region that has many foreclosed homes. In the eyes of a banker who is out to recover losses from bad mortgage, it may appear to be a valuable showpiece.
It may be pointed out here that Obama’s Making Homes Affordable program could not work out only because the lenders delayed loan modification. Most of the banks are so preoccupied with foreclosure filings and selling homes that they really do not have time for mortgage modification."

(In some ways, I suspect that the bank employees themselves who are responsible for doing loan modifications are just sloppy, lax and get paid either way. Who knows what imperatives they are handed from higher-ups. They're people. They see their own situation, rather than ours as home owners who have to figure out where to go and how to hang onto beloved pets we're committed to, if we lose this most basic necessity, the roof over our heads. They're insulated from the anguish, because to them we are numbers who represent profit and loss on paper, not human beings with needs.)

What a home could command in price three years ago, is irrelevant. Now we can't even use comps to get a per-sq-ft cost basis, because the recent sales are all over the map. A home down the street -a brick with three bedrooms, two baths and a fenced yard, - just sold at auction for less than $35,000. It was listed at $130,000 in 2008, when the owner lost his job and tried to sell.

Banks are cutting off their own noses to spite their faces on these foreclosures, because the government will buy them a new nose to replace it, so no worries if they lose billions.

Modification failure - Increased foreclosures are blight on US economy

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WOW: just when you've heard it all, you hear yet again another sad story! Of course, word on the street is that BAC (bank of america) and CHASE are THE WORST at providing modification loans. This is just what you hear, I have no actual proof it is so. Reputation means a lot, especially if you have strong competition. There are many stories of how banks are losing their reputation and maybe the following scenario, told to me by a friend, can help explain why.

STORY: A women has huge, REALLY nice house. In Arizona you hear about mother-in-law houses, but rarely see them unless in upper class neighborhoods. This house had the smaller house on the property with her huge nice house, these smaller homes are usually referred to as mother-in-law homes. Woman has about 180K ready to pay down mortgage which has become delinquent. The bank will not accept it. NO, YOU OWE 350,000.

REMEMBER: Modifications normally try to lower payments but put the difference on back end of loan or do tweaking to make payment lower - you still owe the whole amount including past due... so your mortgage principle rises and so does your payment eventually. Sometimes with a balloon payment at the end. Back in 2008 loans were modified at a rate much lower than today, the programs were just starting up and it was common to have a payment increase immediately as result of the "modification".

ZOWIE: Today's number of modifications are appalling with many not even allowed to actually apply for the modification. NACA seems to be a name for getting help, the NACA name comes up over and over again in conversations with those affected by delinquencies. NACA has lawyer referrals, and free forensic audits. HOPE is another agency that is supposed to be helpful - if you can get through to talk to someone.

Back to the story: The woman offered to pay a lower amount, pay part of the past due or to modify, but bank would not work with her at all. So the bank would not allow the 180, 000 payment, would not modify and would not lower principle and allow house payoff at 180,000. Instead the bank foreclosed and eventually sold the property with acerage for 80,000. Does that even make sense to you? NO, I do not know how they had 180,000! Sometimes people sell a second property or get loans from relatives; others cash out retirement or life insurance.

PARALLELISMS: Our home will sell for about 100-150K with low payments. IN fact our interest of over 8% will be lowered to 3.69 or so and some will qualify for government down payment assist of a few thousand dollars (something we have NEVER had) and the house will be repaired if needed. The payment will be at least 2/3rds and maybe more like 70% lower than our payments were. And while we think this house will sell in reasonable amount of time; we see houses all over our area that have sat vacant for over a year. Many homes are vandalized and many homes are targeted as a hang out for teens or for squatters.

NEWS: For an interesting read, check out this article on New York Times website which carries the following quote within the article:

"Sixty percent of modifications undertaken by banks in late 2008 were in default a year later, according to the latest Mortgage Metrics Report compiled by the Office of Thrift Supervision and the comptroller of the currency.

Many of these private plans either kept the payments the same or increased them. Inevitably, those mortgages suffered the highest failure rate: about two-thirds of the borrowers defaulted again.Loans for which the payments were decreased by at least 20 percent failed at a slower but still significant rate of about 40 percent"

PROGRESS?: Banks are the primary block to lowering principle. And yet the process they go through robs cities and states of tax revenue and increases crime. A true blight on society - but banks don't care. You think they care? Call your congressman today if you care about the economy or the societal impact of foreclosures. The rate of foreclosures is not down - it is up!

Finding a new home in 2 days: The best laid plans of mice and men

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WHAT ARE THE POSSIBILITIES?

Well in our sketchy reasoning our plan A for moving fell apart last 2 weeks ago and last week it became apparent that plan A is DEAD. Other opportunities have opened up. We called realtor representing the assert management team and asked about if someone were to buy our house, as is, and allow us to rent it - would they go for it?????? WE looked at what is available in the area for low cost and WOW, everything from bad location (next to the nuke plant) to needing a complete re-gut and remodel. Our friends house sold in record time (about 1 year less than most) The bank had it very low priced and the neighbor who bought their home has bought almost every property on their street. Who wouldn't buy 5 acres with orange trees and a decent sized house for about 100K?????

The last house we looked at needed kitchen, some mold removal work, new walls in some rooms, and new fencing and total repaint. Almost all windows need repaned. WE didn't get to see bathroom andI suspect the fireplace is filled with squirrels or birds. WE didnt' get to GO inside to check the house out thoroughly. It sounds like an adventure but is overpriced by about 50K or more. Without time to investigate more we wonder about the property - who knows if there are termites or worse??? Looks like ex-drug dealers lived there or land squatters. Hey maybe the bank would sell it to us for 2 thousand. Or pay us to live there for 1 year. HAHA

WHERE WILL YOU LIVE?

My friend is helping sort emotions and the denial is common for people like me, confronted with being forced to leave and the decisions it entails. If you move because of a job the choices are less. Here is is... can we pay this? Can we resell it? Is it close enough for schooling? Can we take dogs? Not fun choices and each one complicated by other scenarios. It is more than the brain can cope with, while working, fighting legal battles and trying to make sense of life.

For those wondering, we are looking for cheapest place we can find, so that payments are next to nothing. No we can't buy it.... 4closure kind of wrecks the credit. :) I will try to get pictures of some places available by banks in the low cost range on my next post so you can see what is available for those whose relatives or friends can try to help. Remember renting through normal channels is not necessarily an option. Plus we have dogs... at least we have dogs for now. Wanting to find a place to live that is temporary is harder than finding the place you want to live in for 5 or more years!

EFFECTS ON SOCIETY

It seems there is lots of land squatting going on around town. On some properties the fencing is complete and secure, but on others it is apparently not cared for at all and fencing is down in places, if not completely destroyed. Meanwhile we found out that the deputy that handles all evictions has been on the job for a long time and LOVES his work. Looking at all the houses that have set empty in our 10 mile radius - I wonder how someone loves creating houses that attract vandals and teenage party spots. No wonder there are radio ads that encourage parents to teach kids that going into vacant houses is not acceptable.

I CAN SEE CLEARLY NOW ....

WE are looking around our place with new eyes as too "why" we ever wanted to pay high payments and stay in our home .... and I know why..... even over priced by 3-4 x the value, we built this from scratch. We picked out the land and had semi-custom build on it. WE have cared for it, spent hundreds if not thousands of dollars for fencing, curtains, landscaping and such.

That was back in better days income wise and the property values were low because it was waaaaaaaaaaaay out of town. WE made the unfortunate error of responding to refinance pleas by loan people to help build our business and buy other property. We had never in our lives refinanced before. BIG MISTAKE. Hindsight is 100% clearer as to path choices. Even still if the economy had held up our business would not have been impacted and we would still be okay.

We are still fighting for our home, but resigned to possibility we may have to move more permanently and not just move out temporarily. The court process is likely to take more than 1 year.

COURT and YOU

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Hopefully you have not received a summons yet and have just been notified of the sale of your property. AT this point you have to decide whether to take their offer of time and money to go away or to fight them. If you sign on to take their offer make damn sure it does not sign away your rights to litigate!

Do you have forcible eviction summons? After 2 sleepless nights you decide that you can't go down without a fight. You have done your best to try to work with banks and they would not work with you? What are your choices? Pack it up or go to the hearing.

If you go and have never been to court you are in for a whole alternative universe type experience. My advice would be to go the day before and find parking, locate your courtroom, and sit in it to see what happens. Find someone if you can that has been through this experience before. If this is forcible detainer you are probably unprepared and are going to basically ask for a hearing which will occur in 5-7 days.

Dress better than casual but not super formal. Stay calm and yes you can bring support friends and people to witness the procedures. If your are in Phoenix park in the garage on 4th Street. It is much cheaper than a $57.00 ticket. There are some $3 lots that you can park in for 0-12 hours - the pre-pay machine takes quarters. Men don't wear a belt it slows you down going through the security checks. Women, do you really need that purse? And of course you know this, better early than late.

If the document is presented - "trustee's deed of sale" - DEMAND that it be an original certified copy. You should have had a chance to look over notary to see if all is in order. In Arizona the presumption is with the document and banks, but you can address that. You can also address the standing. You can also address the jurisdiction. In Arizona it will probably go nowhere at this point, but you can try. It will be on record for any appeals if allowed and for your civil lawsuit.

Your next step will possibly be a TRO and a lawsuit. If you have the energy and determination then GO for it. Spend the $250.00 to make them prove they have the rights to do this and that they followed correct procedures. Don't let the presumption of the banks did everything correctly determine your fate.

Legal terms maybe confusing but you can start looking up the legal definitions. There are Law Dictionaries online. Use the law library near the courthouses.

During court, and I know this is not much help, but just staying calm will help your presence of mind. Do not allow a plain ordinary copy of the trustee deed of sale to be entered... object and ask that either the original or a certified copy be presented right there or case should be dismissed. AFter all your honor after YEARS of practice and law school an attorney should know better. You want us to come prepared, even if we don't know what we should bring.

As for you Mr. or Ms. Homeowner - start looking up terms in Blacks Law Dictionary. When you say things they dont' always mean what YOU think.

Median Home Prices and Your Future: (news/review)

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Today you may wonder about how this post fits into the scheme of things. From my point of view, at some place in time AFTER the process, one may want to rethink living arrangements. WE have no plans to move at this time, but if these homes are considered reasonably median priced - then think of the bargains you must be able to pick up around those towns.

At some point homes will be resold and there will be some legitimate deals to be made. Please read my post about possible problems with buying foreclosed homes.

Investing in Foreclosures? Avoid this swamp of potential problems

Your local median priced home is 200-300K, it might be great to move to another state and rearrange living expenses.

With all the bust in the housing market, with a 10% unemployment rate and INFLATION rearing its ugly head... well retiring to a less expensive locality could be smart planning for the future.

Below is intro to news article... enjoy!

Most and least affordable cities to buy a house 2010

Les Christie, staff writer, CNNMoney.com

May 21st, 2010

ARTICLE TOOLS:

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Here are the 5 metro areas where the average American family can easily afford to purchase a median-priced home - and the 5 where they can't.

Top 5 Most Affordable Cities

1. (tie): Indianapolis

Median home price: $96,000
Median income: $68,700
Affordability score: 94.9%

America's most affordable housing market is the 33rd largest metro area in the United States, with 1.7 million people.

The median family income is fairly high -- $68,700 -- and median home prices are a very reasonable $96,000, according to the National Association of Homebuilders and >>>KEEP READING

Move out target date nears!

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So our agreed move out date is drawing close at hand. Emotions, as we pack for the "just in case" moveout, increase. While not concerned for ourselves; our concern for daughter's arrangments and our 3 golden's situation mounts. We have contingency plans for them, but it IS disruptive of lives, no doubt. Our ability to focus on building business is lessened.

We have more legal maneuvers and a lawsuit that is actually stronger than most for basic suit. As we try to employ these we hope for the best. We'd rather fight from within the home than from outside of it.

If you are in a foreclosure, try to do a TRO (temporary restraining order) BEFORE the sale... (not legal advice just sharing what we learned the hard way). Evidentially it does not work AFTER a forcible detainer has been entered (at least that is my understanding); you will have to read up on it. I will try to supply some links later that might be helpful.

asset management team

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The real estate asset management team stopped by today. The visit is 10 days earlier than our move out date but they wanted to see if we are still on the property. It feels very vulturish. (new word I made up).

A nice talk reveals much of what we have learned. The left hand of the bank, may not know what the right hand is doing. Which is why, surprise, the assest managment team did not know we had more time. The agent said that things slowly seem to be getting better; as far as people getting help. HAFA seems to be a program name that pops up a lot. Doesn't help us much nor make me feel proud to be an American. Does anyone reading this have experience with HAFA?

I wonder what is happening to friends from online going through similar. The emotional weight is tremendous and the thought of just giving up is sooooo appealing.

Updates on foreclosures and eviction process

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Update May 15, 2010 - As time draws near to make sure that we are NOT evicted, legal considerings accelerate. Everyday we learn more. Facing this on more than one property is intimidating but not impossible. With the bank essentially killing our sale at full price we have grounds to have foreclosure totally suspended. Learning how debt collectors ignore TILA laws, lie and intimidate renters is a whole new universe for trusting souls.

Meanwhile we continue packing and sorting just in case we are forced out of the home. We are fortunate we have two or three alternatives, many have NO alternatives and end up living out of their cars or dividing the family among extended relatives and friends until they locate to better situation. Some live in garages or camp out in parks.

Friends, one year ago, I had no idea, banks sell the loan to themselves - often without proper notification). In Arizona this is not a JUDICIAL procedure it is done by trustee sale. This alleged sale, which I personally think of as a sign over, often results in a summons to eviction trial (forcible detainer) with a 3 day notice to appear. After that there is 5 days until trial or until writ to the sheriff is written, depending on how you plead. Certainly if I had known the future, I would have simply sold the house when it had equity and would never have listened to the bank reps telling me that to lower payments I had to go late by a few months.

If you are a renter or owner facing possible eviction, foreclosure (or are in foreclosure currently) learn the laws... go to your state laws and learn what is legal and what is not.

If you are concerned about fraud then check out this article.

Housing Bubble - MORE Foreclosures Coming

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Dr. Housing Bubble Blog

May 11th, 2010

Housing never really improved – 10 charts showing the United States housing market is entering the second wave of problems. 1 out of 4 people with no mortgage payment in the last year are still not in the foreclosure process.

To put it bluntly, the U.S. housing market today is in deep water. Nothing exemplifies the transfer of risk to the public from the private investment banks more than the deep losses at Fannie Mae and Freddie Mac. Fannie Mae announced a stunning first quarter loss of $13.1 billion while Freddie Mac lost $8 billion. At the same time, toxic mortgage superstar JP Morgan Chase announced a $3.3 billion profit for Q1. This reversal of fortunes has been orchestrated perfectly by Wall Street. Since the toxic assets were never marked to market, the big losses have been funneled to the big GSEs (and as we will show in this article, now makes up 96.5 percent of the entire mortgage market). In other words, banks are making profits gambling on Wall Street while pushing out mortgages that are completely backed by the government.

>>>>>>>>>>>>>>KEEP READING THIS ARTICLE WITH CHARTS>>>>>>>>>>>>>>

Appraisals and home values in today's economy

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I was reading my weekly MarketWatch and had a JOLT. An article on how to negotiate the appraisel value of your home. Now granted the author was speaking in terms of LEGITIMATE fair value when you know an appraisal has been lowballed. But, in this day and age, when we are still seeing huge numbers of foreclosures, it seems as if we learned nothing from the housing bubble burst. IN the past two years, seeing first hand the results of overinflated appraisals, makes one leary of information that instructs people to ignore the lessons learned.

Here is a snippet of the article and read also the comments on the article itself. People are responding in a way they would not have 3 years ago. I personally think the advice is great when used correctly.

Amy Hoak's Home Economics

May 10, 2010, 11:06 a.m. EDT · Recommend (3) · Post:

How to fight back against a low home appraisal

Check for mistakes, contest inaccurate valuations

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) -- A low appraisal can kill a home sale.

"It's one of the more common reasons that transactions fall apart these days," said Tara-Nicholle Nelson, consumer educator for Trulia.com, a real-estate website, and a real-estate broker and attorney in the San Francisco area.

In a normal market, when an appraisal is lower than expected, it's up to the buyer and seller to cooperate -- whether that means the buyer needs to put more cash into the deal or the seller needs to >>>>>KEEP READING and add your comments

UPDATE HAFA, HAMP and changes to loan modifications

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In a previous posting I referred to video of phone call outlining HAMP qualifications at a bank. Today I had interview with home modification specialist and she was telling me how things have updated recently. She estimates that only 30% of the loans coming through their department are modified. Which she told me she doesn't think is a lot of modification and that much more is needed. I was telling her that I had heard the figure was much lower. Either way at least there are changes.

Here are a few:

All the major lenders are now accepting HAMP applications. Freddie, Fannie and Ginnie are among them.

You are no longer required to be 60 days late on mortgage payments to qualify. makinghomeaffordable.gov

The government is pumping money into this program and has tried to make it easier to get help. 36% get permanent modifications after trial period. HAMP looks to be more promising than just a few short months ago. One of the best changes is that it is targetting the hardest hit areas. What do you think of the new improved HAMP?

Foreclosure crisis may be easing: Do you think?

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Our motion to the court to vacate judgment fell on deaf ears. So on to bigger badder legal maneuvers.. OH JOY!

Meanwhile our media and government wants me to believe that things are getting better. If that is so why aren't the banks helping homeowners and riding out the wave to economic recovery? Below is intro to news report. I am not sure what to make of the numbers and have a friend in real estate checking things out. Make sure to click over and read the article in full. I find it hard to stomach that 20% help in modifications is in any way acceptable help for homeowners.

Foreclosure crisis may be easing

By Alan Zibel

Associated Press

Published: Wednesday, May 12, 2010 10:07 p.m. MDT

1 comments

E-MAIL | PRINT | FONT + -

WASHINGTON — Millions of Americans are still likely to lose their homes in the coming years, but the foreclosure crisis is finally showing signs of subsiding.

The number of households facing foreclosure in April fell 2 percent from a year ago, the first annual decline in five years, RealtyTrac Inc. said Thursday.

But the data aren't all sunny. While the number of new delinquencies is dropping, the number of borrowers losing their homes is still rising. Banks seized a record 92,000 homes last month.

And there are millions more potential foreclosures ahead. Nearly 7.4 million borrowers, or 12 percent of all households with >>>>KEEP READING

Foreclosures affect YOU : Upside down in your home?

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I ran across this interesting blogpost about how homes are increasingly going underwater in value. Basically showing the rise in foreclosures about 35%. It also estimated that home values will FALL with this glut of foreclosed homes on the market. More and more people will be stuck without the ability to sell their home to get out from under the loan.

Check out the post 23% of Homes Underwater and let me know what you think! I just heard from a friend that came home to a note on the door... isn't that sweet? Scroll down again to that video of the telphone call to BOA (BANK OF AMERICA) about HAMP (GOVERNMENT PROGRAM) ... This home help program could have helped her, BUT it was a loan owned by one of the major players that won't play ball fair and square. Call your senators!

So in exchange for the bailout supposedly helping homeowners we get:

FEW LOAN MODS

INCREASINGLY LOWERED PROPERTY VALUES

MORE HOMEOWNERS FACING FORECLOSURE

UPROOTED FAMILIES

DETERIORATING NEIGHBORHOODS

THIS AFFECTS EVERYONE

Foreclosure & Eviction Up Close: 11 videos

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For those friends that have not seen foreclosure results up close and personal, here are a few videos to show you what is happening in America all over. Starting with the first video that includes how the loan broke TILA or truth in lending laws. And ending with 7 strategies to use if you are faced with foreclosure. Check also the links to the right of other blogs if you need help!

Less than 1% of home loans are modified. In some states the eviction is 3 days. 3 days to move a lifetime of memories. Arizona is generous - you get 5 days. Evicted homeowners lose their downpayment money, as well any money towards principal payments is gone. To add insult to injury, about 90% of foreclosures are estimated to be wrong. Many do not know that they are victims of toxic loans or fraudulent loans. Many do not know of some of the answers that are out there.

What the heck.... ? What is the hurry to EVICT? 3-5 days? Cash for Key's options mean that you sign away all rights to property! Choice you get 30 days and a POSSIBLE few bucks OR you get evicted in 5 days. That is COERSION. We have courts that are applying COERSION additionally by presuming the banks word that they foreclosed properly. They don't need notes, deeds or anything other than a trustee's deed of sale as a document to force eviction. It does not matter HOW they got that document. AADD YOUR THOUGHTS HERE: COMMENTS

Check out these videos and explore more. LISTEN TO THE STATISTICS and then get involved because it involves everyone in America not just a few nameless people that got themselves into a financial mess. Most people have used all assets to stay in the house as long as they can. All savings, retirement and possibly even loans to try to stay in a house that has no equity to draw from.


DAN'S STORY: Fighting for our Homes - mortgage fraud involved here! TILA (truth in lending) laws violated









CASH FOR KEYS: Explained from REALTOR point of view










HUD foreclosure


Does this sound familiar?: fixed income, no equity and YOU DON'T QUALIFY for help


CALIFORNIA DEPUTIES ARMED EVICTIONS: Several dozen per week



PETS EVICTED TOO: This video from 2008 when there were less foreclosures


Where have all the builders gone? NEW Industry - Foreclosure Cleanup


2009 What to do if facing foreclosure: Jeff Lerman on Fox News: 7 Ways To Legally Delay or Avoid Foreclosure - remember only 1% of homes in 2010 are now modified!

UPDATE on the homefront: Vacate the Judgement

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Current Status: We filed a motion to Vacate the Judgement within 3 business days. Since our mail service is screwed up we are checking the court dockets daily to make sure we do not have court date set without our knowledge. We did include an self addressed envelope (stamped - when did stamps hit 44 cents?) for the judges signed order. Some of you may not know that when you file a motion, you need to include a prewritten order for the judges ruling in your favor.

BACKGROUND: About 1.5 weeks ago we went to our forcible detainer trial (which we requested) and accepted more time to move out without giving up our rights to legal recourse. When you are in the courtroom things look different and nuances can be missed. By accepting that offer a judgement was handed to the bank's lawyers that they had the right to the enforce the fraudulent transfer of our home to themselves and call it a sale. I never heard the judge's gavel or anything remotely sounding like BANK WINS!

NOTE TO OTHERS: IF you are going to go to court make sure to go to similar hearings for several days and get used to what is going on. Watch and see the various shenanigans that happen. Practice what you will say and what the opposition could say. Take a legal pad and make notes. Or get a lawyer and most out there don't have a clue how to help you, so I would recommend using NACA's website for referrals.

Investing in Foreclosures? Avoid this swamp of potential problems

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I've always been a big fan of the fix and flip shows. They fascinated me for a year or two. In cruising the internet searching for newer information about mortgages, I ran across this blogpost that caught my eye. Bill Bronchick sheds light on an aspect of buying forclosure homes that grabbed my attention. Check out his post: Can Foreclosure Investing Be Criminal?

If you have thought about buying pre-foreclosure homes directly from the homeowner, then you MUST check out this blogpost first. Food for Thought: If the homeowner came back what would you do? What are the ramifications for buying foreclosures directly from homeowner?