Cindy Diemer, the Lady Lake Senior Code Enforcement Officer referred to one of the foreclosed home backyards as a jungle. Numerous foreclosed homes in the towns having big lawns with reckless growth of grasses and weeds is causing a lot of trouble.

There are many such lawns and backyards which do not have any owners at present. In fact, Lady Lake has kept away some money for the payment of the contractors for the maintenance of the lawns as their owners have failed to agree to the ‘code enforcement notices’.

According to Lady Lake, the city is attempting to get an ordinance which would need the owners like banks to enroll their foreclosed properties along with the town. Lady Lake being the only municipality, inclusive of being one among the very few in the state which pursued this ordinance.

Diemer commented about the home foreclosures that, “It’s a tough situation for people all across the country. Anything we can do to help preserve our community we should undertake.”

Diemer further observed that when they find any foreclosed property that is abandoned the list will surely help at that point of time to recognize the owner of the homes and the lawns.

There has been an expansion in the rate of residential foreclosed properties. In fact, the number of properties being foreclosed during 2007 has literally doubled in 2008. Moreover, it seems that, the foreclosure records of 2009 might just supersede the figures of 2008. By the month of June, this year the residential foreclosures have increased to 2,964 and all these homes have been enrolled with the Circuit Court in the Lake County Clerk.

The money that has been kept aside in the general fund of the town is meant for the payment of the contractors for the trimming and clearing the lawns. However, according to Diemer, the amount of the funds is in the process of reduction. Currently, Diemer is involved in drafting an ordinance following on the lines of the ordinances which were passed in counties of Broward and Lee. She stressed that, “It has been extremely successful. We’re tailoring it to our specific needs.”

Ron Collodi, chief code enforcement officer observes that the Lake County mostly keeps itself to cutting down any property at least twice per year. However, this doesn’t help to change the situations, especially for the neighbors who face a lowering of value in their properties.

Collodi further emphasized, “It’s a problem getting a foreclosed property mowed. It’s a definite budget drainer.”

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A deeper analysis regarding the foreclosed homes within this year features that on an average the loan terms were meant for approx 4 years. In Dallas-Fort Worth the foreclosed homes had a median of approx $160,000 in the real debt. Among the foreclosed homes almost 88% were homes with single families.

On the whole, the properties that were being auctioned, in totality had a debt of $1.46 billion. During the initial few months of 2008 the amount was almost $1.4 billion. According to some analysts this foreclosure reduction might also be the result of lenders who are mostly overburdened.

Dr. James Gaines from the Real Estate Center at Texas AM University observed that, “I’ve heard about the delays at the lenders, most of whom have reduced personnel. Foreclosures could get nasty as job losses mount. We avoided a major hurdle with the collapse of dicey credit terms, but there’s no avoiding it if people lose their jobs.”

D’Ann Petersen who is a business economist working with the Federal Reserve Bank of Dallas commented that in case, there is a slowdown of foreclosures resulting from successful modification of loans then it will surely “indicate some stabilization, whereas delays would suggest continued deterioration.”

Lenders feel that they are storming up the attempts to alter loans and curb foreclosures as well. As per the Hope Now data, since January, more than 1.5 million homeowners in the U.S. have benefited from loan modifications. The Hope Now is a ‘Washington, D.C., private alliance of mortgage servicers, investors, counselors and other mortgage-related firms.’

Within the second quarter of 2009 above 318,000 modifications of mortgages occurred throughout the country compared to the 220,349 modifications during the second quarter of 2008. All these modifications were done by the Hope Now firm. All over the country the workouts of the loans increased by 25% in the month of June.

Though the number of foreclosures reduced in North Texas. the 8,139 homes with single-families under the control of the lenders can be compared with 37,000 pre-owned homes with single families that are presently meant for sales.

Sue Meyer, the president of Coldwell Banker Residential Brokerage observed that, “The buyers out there are looking for bargains. They are hearing so much about foreclosures and short sales, and feel they are going to really win some wonderful properties.”

Meyer feels that at times the potential buyers get discouraged due to time consuming procedures. She observed, “You have homes listed at excellent prices, and the buyers are still thinking they can come in so much lower. But when they lose out a couple of times, they know they should come in at a reasonable price.”

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Presently the home prices in Chicago are falling at a rate of literally 12% from the usual amount that was there in the list of prices. Mostly the real estate agents tended to advice the sellers that under the current situations they will mostly have to adjust at lesser prices and less appreciation. Unfortunately, these swinging rates of mortgages, comparison of sales including bargain prices of foreclosures and joblessness and the market of the real estate in the month of August are the prime factors influencing the market conditions presently.

At least 31% of homes that have been listed in the Chicago-area have experienced approx price curb as per the real estate data by the provider in San Francisco. In fact, 24% homes have suffered the set back of one price reduction n the whole. When one takes a deeper look into this issue it seems that the 31% of the average numbers in the Chicago locality is still a decent picture compared to what few other localities are featuring in case of percentage of homes under price cut. Prices in East Loop near Millennium Park have been cut down to at least 43% and the average decrease is approx 6.6%.

The regions of Lincoln Park and Logan Square experienced a 35% while the median cut down is 8.2%. Sellers in Elmwood Park have cut down the prices to 9.6% with 40% of the amount from the list. According to Randy McGhee working with Koenig & Strey GMAC Real Estate, “Sellers say, ‘I’m not going to give it way,’ “If you want to sell, you will be giving it up for what you paid for it or less in the last four years. If you want to sell it and you’re thinking of a reduction, don’t wait until September. Do it now.”

Selling the condos is another issue in Chicago. These condos were featured at short sales and the work was done through a private deal as the owner sold the property for less and the lender also approved to sell this property for lesser amount compared to the amount to be paid on mortgage purpose. Kimberly Oehmke, working with @Properties commented that, “My last three buyers and a current one only want to see foreclosures and short sales because they believe that’s where the deals are. It’s hurting the person who has a great property and isn’t in the short sale-foreclosure predicament. Anybody that is not a short sale, we just beg our clients to rent it out, just hold on until next year.”

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Numerous property owners have taken to renting out their storefronts to advertising companies as a potent solution to the difficulties posed by the downward trends of the economy including the enormous number of properties being abandoned. A number of traders and retailers trying to rent out their properties have finally tied up with a leading advertising house named Monster Media which acts as a tenant for them at such troubled times.

As observed by the president of Monster Media, John Payne, “With the weakening economy and the dramatic fall in real estate over the past year, we are helping the people who need help the most. We take vacant storefronts, in major cities, and turn unattractive, neglected windows into colorful, vibrant displays.” In fact advertising with storefront adds life to messages from various brands while on the other hand a lifeless image of a storefront would simply put off probable tenants.

According to Mark Seiler, the managing partner of a private enterprise real estate agency named Metrovation, “We have had great success working with Monster Media to fill a vacant property, and both the storefront and the building were significantly upgraded with the ad campaign that they ran in our space.” Seiler also stressed on the fact that such partnerships mostly prove to be lucrative and also adds to the usefulness of an otherwise unoccupied place.

Payne also emphasized on the fact that these storefront launches attracted clients like HBO, Target, Microsoft and Samsung. According to Payne’s accounts, “Many of the storefronts that we’ve leased for past campaigns drew so much attention to the buildings that the landlords were able to lease out the space to permanent tenants. We can also assist property owners by creating a digital ‘for rent’ sign, making the property look more desirable then the plain ‘for rent’ sign most commonly used.”

The present innovations in the realm of technology and media have also aided the economic conditions where people need investments and financial support.

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The economic scenario of the property market in 2009 provided a pretty cloudy image due to lowering prices, rising sales figures and an alarming degree of foreclosures. In fact for the ones opting for house buying in the months of summer this is a sad scenario. The confusing situation of falling prices and rising sales in one hand and hyped foreclosure situation coupled with major unemployment conditions have made it all the more difficult for the investors and buyers and sellers to indulge in property transactions.

Escondido, San Marcos, Vista, Oceanside (Highway 78) and Southwest Riverside County have featured as the most potent areas in terms of selling of houses with lowest prices which is almost near to recovery limits and this has greatly affected the aspect of selling and buying of houses in these regions.

Going by the records one can understand that in the Escondido locality alone 157 houses were put up for sale for approx as low price as $200,000. It can be estimated that these houses will be almost 70% below the earlier sales prices. During the last session of recession in the world of real estate in the year 1996, the median price was quoted to 3.9 times the median income of a normal household and hence the usual trend of mortgage turned out to be approx 31% of the defaulter’s income.

The present recessionary scenario has pushed down the mortgage price to approx 30% of the income depending on the median prices which is apparently 5 times of the median income. For most buyers it’s a frustrating situation as firstly they find it difficult to adhere to the higher side of the prices and secondly they find the lower portion of the pricing quite irritating.

The real estate agents find it difficult to handle at least 25 investors interested in one house at a time. According to Gene Wunderlich who operates as a property agent in Wildomar, “People are afraid things are heading back up, and if they don\’t jump now, they’re going to get frozen out”. Moreover going by Wunderlich’s records one can see that the prices on a per-sq-ft basis have reached an average limit during the past few months in the localities of Temecula and Murrieta. Norris, unlike Wunderlich fails to comprehend any amount of steadiness in the range of prices for houses and he also concludes that, “There’s no doubt that it’s going to decline,” he said. Combine the huge “shadow inventory” of foreclosures and rising unemployment, and “you have a perfect storm.”

On the whole it can be concluded to be a comparatively ripe time to invest as the interest rates will shuttle mostly between 5 to 7 %, but as a precaution people should assess all the possibilities prior to investing.

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It has been seen that about 46.9 percent of the properties that got sold in August were facing foreclosure on them. This prompted the median home price throughout the state go down to $301,000 from 35.3 percent in August. The housing crisis had badly hit the foreclosed homes of the inland regions. According to president of a Prudential California Realty, Rich Cosner, the reduction in home prices has attracted a large number of buyers in the region. Spokesman Andrew LePage has said, “It’s the counties that have these large pockets of distressed properties where prices have plummeted”.

There has been about 31.8 percent decrease in the median home price in the San Francisco Bay Area in August as compared to the figure last year during the same month. It dropped from $655,000 to $447,000. Last month, about 7,232 condos and new and resale homes got sold in the county area comprising of nine counties in total. This shows a decrease of 0.9 percent from what it was in the month of August of 2007.

Sen. Barbara Boxer, D-California has said that the state got only about 11 percent extra on the available $130 million for negotiating between the distressed homeowners and the lenders. This is quite low in comparison to the number of California foreclosure that accounts for over a quarter of the US foreclosure filings from January to July, 2008. The funds for it got authorization in July as a component of the housing bill.

Boxer in a letter to the fund distributing agency’s administrator wrote “The communities hardest bit by the foreclosure crisis deserve our priority attention,” The increase in the number of foreclosures in California has led many to raise their voice against the federal government saying that the distressed homeowners are not getting the required help to get away with the real estate mortgage crisis.

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A ray of hope seems to be there for the real estate market of US. Although the rate of foreclosure homes have gone up in the month of August, but there is an indication of stabilization in the US housing market. The Fannie Mae and Freddie Mac bailout by the government is supposedly going to strengthen the value of homes. It has been observed that about 656,545 properties or 8.6 of every 1,000 homes in US have been repossessed by the lenders since January, 2008. In the month of August, nearly 102,000 homeowners have fallen into a foreclosure situation. This is almost an increase of 6.0% from the figure in July and 80.0% as compared to the previous year.

It is assumed that nearly 1 million properties will be taken over by the lenders by the end of 2008. About 1.45 million homeowners have confronted with a pre-foreclosure action on their home by the lenders since the beginning of 2008. This is quite alarming as it is almost twice the figure of 2007. Since July this year, the pre-foreclosure activity has somewhat slowed down. However, over half of the pre-foreclosure and lender repossession has taken place in Florida, Arizona, and California. These three states together with Nevada have been heavily hit by the real estate mortgage crisis of US.

Mortgage Bankers Association has reported that nearly 9.0% of the homeowners in US with mortgages were either in a foreclosure situation or behind in their payments at the close of the second quarter. It has been said that California and Florida has been the driving force behind this increasing numbers. The bailout of Fannie Mae and Freddie Mac is expected to have a positive effect. It is hoped that there will be a drop in the borrowing costs. This will provide a support to the secondary market’s demand for mortgage-backed securities and will be a source of money for the lenders.

A decrease in the borrowing costs will make it feasible for the buyers to buy an already-foreclosed home. There has been a major fall in the employment level that has made several economists to assume that there will be further foreclosure problems. According to the Labor Department, a loss of about 84,000 jobs has taken place for nonfarm payrolls in the month of August. The rate of unemployment has rose from 5.7% to 6.1% in August.

The Northeast and Midwest have faced much lesser foreclosures and pre-foreclosures this year as compared to 2007. The Southeast region has the highest number of pre-foreclosure activity going on, with 477,177 or 27.5 filings per 1,000 homes. On the other hand the Southwest region has the highest number of foreclosure activities, with 348,019, or 12.7 filings per 1,000 homes.

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Banks began to take back the property that was bought with borrowed money since the money was not being paid back as formally agreed earlier. The prices of homes sold in the first quarter have also declined in record numbers. Some of the states in USA which include California, Nevada, Florida and Michigan have exhibited the greatest decline in prices of homes.

According to the Mortgage Bankers Association (MBA), mortgage application volume also declined which has resulted into decline of home prices. People living in most of the states in USA have become homeless and the problem lies in the crisis of the economy. The trend of falling prices of homes also affects the banks and other financial organizations. They have to face a huge amount of loss and the situation is becoming worse day by day.

The rate of foreclosure of homes is higher in states like California and Florida while the Michigan and Ohio are the two states which have faced fewer rates of homes going to foreclosure. Americans have exhibited record rate of decline in home values as well as in the stock market. Considerable amount of damage caused in the stock market and in the economy of the nation. The overall disaster in the US market has damaged the economy, therefore affecting the banks and other financial organizations.

The prices of homes have fallen in 43 states including California and Nevada which faced huge losses with home prices. Due to such conditions, homes have become less valuable assets for the people of America as the nominal decline in home prices affected the economy nationwide.

Hence people are seeking help and call the foreclosure Help Line to take advice on how to save their houses. Various preventive steps have been taken to help the struggling homeowners. In order to offer prevention, mortgage servicers, the borrowers and the companies that manage the loans have taken steps together to fix up the rates of loans.

However to overcome this situation borrowers are coming up with various re-payment plans to the lenders, which might be going to improve the scenario in near future if implemented properly.

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The decline in home prices has been a much discussed topic in recent times. In metropolitan areas the effect of this fall is being felt acutely in neighbourhoods dominated by low income families or minorities. Areas in the outer suburbs have also been hard hit.

The situation is being attributed to the high number of loans given when the housing market peaked in these areas. Many of these loans were given without sound financial basis. As a result defaulters are aplenty and foreclosures have become the order of the day.

According to Rick Sharga, Vice President, Irvine California Realty Track, first time buyers investing in overvalued real estate on the basis of risky loans have contributed significantly to the situation.

Real estate specialist and researcher Stan Humpheries of Zillow.com opines that the housing boom was largely dependant on land on the fringes of urban areas and hence it is these areas that are now feeling the ill effects of foreclosure intensively. According to him, many people prefer living close to the core of an urban area as this implies shorter commuting time and greater access to amenities. Thus housing in the suburbs holds value better, ensuring that builders concentrate much of their efforts on the perimeters of urban areas when trying to increase housing supply.

A study conducted by Impresa of Portland, Oregon points out that the distance of a neighbourhood from a city’s downtown area and the decline in home prices is interlinked. Called “Driven to the Brink” and conducted for the CEOs of the Cities Group, the study has found that as the price of gas crossed the $2 per gallon mark, home price gains began slowing down. According to Joe Cortright, an economist with Impresa, the study found that the further away from downtown a locality was situated the greater was the decline. This was true of metro areas across the country , with cities as different as Portland, Chicago, Tampa, Florida and Pittsburg, Pennsylvania all showing a consistent pattern.

The study further underlines that some economically weaker areas have high foreclosure rates because mortgage brokers have shown a tendency to give greater loans in neighbourhoods that were previously ignored. This is a reflection of the current global trend of investment based on the income from mortgages.

Congress is planning to remedy the situation, says the study, by encouraging state and city governments to buy foreclosed real estate in economically backward areas. It hopes that this will bring down the number of vacant properties and more units will become available at affordable prices.

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A private financial conference held in London last week saw bankers from the USA airing their views on the present housing and mortgage situation. Some of the top executives of American banks presented their forecasts and offered the audience a perspective into the inside world of real estate forecasts. On the whole the bankers were optimistic about the situation.

The hardest hit state so far has been California, which has seen a spew of foreclosures and dropping prices of real estate. According to Kerry Killinger, CEO, Washington Mutual the last month has seen a slight improvement in the state. His company is closely monitoring the situation as this may be an indication that the downslide in real estate is finally evening out.

Chief financial officer, Wells Fargo, Howard Atkins believes that lower rates of mortgage coupled with affordable housing and capital infused banks can together help the market recover within the year. Quoted in the American Banker newspaper, Atkins’ views promise a brighter future for the hard hit real estate market.

The latest federal pricing data however does not reflect this upbeat mood. The Office of Federal Housing Enterprise Oversight is the agency responsible for tracking home values on behalf of the federal government. Issued last week, its quarterly report cites a 4.4 percent decline between January and March 2008 in California. This makes the predictions of improved conditions by the bankers all the more significant in the second quarter.

California’s declining real estate prices are not reflected throughout the country, however. Of the 292 metropolitan areas surveyed by the report, 56 percent have actually shown an appreciation in real estate values in the last year. Topping the list is Houma-Bayou, Louisiana with a 11.2 percent gain, closely followed by Grand Junction, Colorado at 9.1 percent. Wenatchee, Washington (up by 8.1 percent), Austin, Texas (up by 7.7 percent) and Billings, Montana (up by 7.1 percent) also find places at the top of the list. State wise, real estate in Wyoming appreciated by 6.3 percent, in Utah by 5.6 percent, in Montana by 4.9 percent and in Texas by 4.7 percent.

These figures once again highlight the fact that real estate is a highly localized asset. Fluctuations in value in different states do not necessarily affect prices everywhere. Thus on the one hand there are states like California and Florida which experienced highs of 25 percent increases at one time and have hit rock bottom more recently. On the other hand, there are those states that have plodded along on a steady keel, experiencing neither extreme.

“Slow and steady” seems to be the mantra of the future.

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The counselling agencies all across the United States offer that it never is a sensible option to walk out on the face of your foreclosed property without exploring other possibilities.

Though walking out can feel like the gut level functional thing to do, practical real estate dealers and property counsellors often have better things to suggest. Martin Eichner, who is the director of the HUD program, states that the Project Sentinel that took place in Sunnyvalle, repeatedly tried to give across the point that walking out was quite a foolish option. In fact, without having explored all other viable choices, it is a terrible mistake to do!

Once you walk out you really cannot turn back and so it is important that homeowners follow through other recourses to the law before doing the ultimatum. Of course, when nothing works out one can always walk out later.

The director of HUD implores homeowners that even when they are knee-deep in water, they should try to explore every other option that the property counselling suggests. Negotiating whatever is possible is the key to hold on to one’s property. A short sale or deed out of a bigger property can even save the entire project and help tide over the foreclosure. Nevertheless, the worst thing is to have a property gone down on foreclosure as it goes onto one’s credit report and leaves a stab of black mark that would not go off you for years to come.

Financial experts like Jim Cramer or the “mad man of Wall Street”, however stresses that walking out makes the only viable and economic sense after everything. Therefore, why waste so much of money and time over something that does not make sense at all when you can walk out and are done with it as soon as you find out it will not work out for you! When mortgage rates increase with your earnings dropping, when are you really going to catch up?

According to Cramer, “When houses drop below 20% in value…it’s better to walk away, even if you are wealthy….” This poignancy from Cramer makes you look into the issue that you do not want to lose your credit card or your car for the sake of holding onto a property when you know it looks like a sad face or a heavy scale down your shoulder. When your house is fungible, it is a smart thing to save time, money and energy to walk out. Else, one goes through the most stressful situation in one’s life!

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Move aims at aiding high cost funding in real estate and prevents foreclosures by investors. All those who always wanted to invest in real estate or were contemplating foreclosures, now have some great news to cheer about. The economic stimulus plan initiated by the government has many provisions to tackle the current slack in the housing market and avert the mortgage crisis. It provides many measures in order to ease and aid mortgage loans and reduce cost especially in high-cost housing markets.

For a start, the plan proposes the removal of the cap on the loan amount which can be purchased by these government funded enterprises – Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM) insurable by the Federal Housing Administration (FHA). There is also a change on the cap limit (now increased to $725,000) on these FHA loans; this limit serves as a protection to lenders against any loan defaulters.

These enterprises currently have a provision to guarantee a loan of up to $417,000 in the secondary loans’ market. However, this amount has been increased to $625,000 for a ONE year period as an initiative for buyers to get mortgage loans and /or refinancing. This move surely would aid those buyers interested in investing in real estate in high-value areas like California.

With the existing situation (cap of $417,000) where there is no assured secondary market for loans, lenders assume higher risk in loaning huge amounts to investors in real estate. This in turn allows them to charge a higher rate of interest payable by the borrower – which means that loans are hard to come by and investors heavily opting for foreclosures.

The increase in this cap limit focuses on an assured secondary market thus making it easier for lenders by a reduced level of risk and making it easier for buyers to borrow at lower interest rates for investing in real estate.

This specifically helps those wanting to invest in high-cost areas and promotes real estate development and sales in slack markets. For example, according to Bankrate.com, the existing interest rate difference between loans within the cap limit and those exceeding the cap limit was more than 1 percent on Thursday – 6.39 percent versus 5.30 percent; which means that on a $500,000 mortgage, this difference is about $350/month.

Richard DeKaser, chief economist for National City Corp. indicated that it was about time that such a change was initiated as many analysts agreed that loans exceeding cap limits were hard to avail due to lender flight (situation where lenders refuse to lend funds).

Lawrence Yun, chief economist for the National Association of Realtors said “This will have a big, immediate impact, especially in California where sales have been down most significantly,”. The 1 percent drop is a huge factor, in California, it could create a mini-boom”.

Analysts like Merrill Lynch indicated dire forecasts for housing markets in the next two years; however with this initiation of the Stimulus Plan things seem to look a lot brighter.

An analyst with Weiss Research also welcomed the move stating that this could bring a change in the real estate investor psychology as they are hoping for a price fall. Lawrence Yun also says that with the current situation, there is the existence of a pent up demand for investing in real estate and with this new provision coming in place, buyers who have not yet made up their mind now can definitely vouch for investing.

This move initiated by the Congress and Bush’s administration would bring in changes like a boom in the home sales market, making it easier for buyers to avail mortgage loans and refinancing, thus reducing the rate of foreclosures and also reducing the lead time –from property developers putting up houses for sale to the sale conversion by buyers.

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Agnes Mouser of Texas is a 65-year-old widow, who got a $10,000 tax due bill after foreclosure on her loan to settle credit-card debt.

First foreclosure, and then the series of monetary problems associated with it, are increasing day by day all over the country. For instance, the burden of tax comes as a complimentary package along with foreclosure. It is very likely for the owner of a foreclosed property to fall into a tax trap without realizing it. Only good negotiation skills or bankruptcy can save the owner from this tax trap.

The system works something like this. First, the unpaid tax amount keeps on multiplying on mortgage payments you default on. Secondly, if the owner opts for selling the house at a lesser value than the actual debt amount owed, and the lender excuses this difference, then the owner becomes liable to pay the outstanding tax on the difference amount that he or she owes.

The Internal Revenue Service’s (I.R.S) policy considers excused debt of all types as an income for the owner. This excused income falls under the tax bracket even if the owner has no tangible property or asset to show for it. Only in cases of bankruptcy does the I.R.S. cancel the debt. In such cases, the onus to prove their insolvency lies solely on the owner.

During the boom in the real estate market, some of the lenders and brokers deliberately encouraged people to take more loan amounts than they could afford. Therefore, if the lawyer of the house owner proves that the process of the loan agreement was faulty, then I.R.S does not treat the forgiven amount as an income. Many people have been able to reduce their tax burden in such cases.

The “Center for Responsible Lending” in Durham, N.C. projects about 21 percent failure in home loans extended during 2005 and 2006. All of these loans will probably turn out into foreclosure. These loans were nothing but sub-prime loans given to people with weak credit profile. The value of many of the houses on which loans were taken is generally lower than the owed amount since the down payments were very low.

The owners can also negotiate lower payments with the I.R.S. However, the outcome is not favorable for everyone since the I.R.S. ultimately decides the tax amount to be paid.

Actually, the truth is that the legalese of the tax paper is very difficult for a non-professional to understand. Therefore, it is always advisable to consult a tax advisor in this kind of situation, or it can end up causing some one a lot of grief.

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There are about 4210 families staying in the country-club community area, and the ratio of foreclosure is approximately 1 for every 41 households since the last seven months. Real estate agents are acquiring foreclosure properties from everywhere i.e. Victor Valley, Mountain resort communities and so on. The number is increasing irrespective of the value of the house.

The crisis in the sub-prime market is making lenders cautious about making any such deals again in the future. Now lenders are finding very difficult to trust anyone with such heavy debt amounts. Besides, it can cause great psychological trauma to the house owners. Those who cannot afford to pay the money vacate the house, and this leads to a deep pervading sense of loss and helplessness. It has a great devastating effect on the neighborhood as well. People don’t like to leave in an ambience which is surrounded by empty houses with a big “resale” sign in front of them. Plus the effect on the cleanliness of the area is an added pressure. Real estate agents are paying Homeowner’s Association (HOA) in Spring Valley Lake to keep the surroundings of the empty houses clean so that it does not have a negative effect on the property values.

The board of directors of the HOA has put the responsibility of cleaning the neighborhood either on the banks or on the real estate agents. And therefore, they are paying for the staff’s wages to the HOA. The amount budgeted for this by HOA is around $15,100. This also includes fees paid to court for allowing them to enter the premises of these homes. $40100 is budgeted for any losses incurred due to unpaid wages. These efforts have been taken up by the HOA to demonstrate to the residing people their concerns about the impact on property values.

There are many cases in the Spring Valley where the owners have bought the house thinking that they can pay the mortgage from their annual income, but unfortunately, the reality turns out to be something else and their properties are foreclosed.

Property agents believe that the situation in the market will continue like this for two to three years more in the Spring valley Lake area. The piled up stock of real estate inventory has become so high that property dealers will take almost three years to square it off. This is possible only if they do not include any more foreclosed homes in the list, which continues to grow with each passing month.

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Real estate has its fan following in the political segment too. Currently there was much hype about the links of Democrat John Edward, Presidential contender with links with foreclosure-filing firms. He is a topic of discussion among foreclosure critics. His associations with the sub-prime lending arms of Fortress Investment Group have provoked critics to raise their agony against him.

In May, the Federal Election Commission released their report notifying Mr. Edwards’s vocation in Fortress. Mr. Edward joined Fortress in the second half of 2005 as an employee. At that time, the firm’s own unit “Green Tree Servicing LLC” had already filed a foreclosure suit against Katrina victims. During his course of service in the firm, Fortress got hold of Nationstar Mortgage LLC. In 2006, he left the firm after receiving his due remuneration. While departing, he invested one-half of his earned amount in Fortress funds. Now, Fortress counts Mr. Edward among the top class of their political contributors. They have also deposited huge amount of money into his political campaign.

Well, this is not the first time when Mr. Edward is engaged in this discussion for his links with foreclosure filing companies .Before this, soon after Katrina hit in May, Green Tree’s letter reached an old lady asking her to either pay the mortgage amount, or else see her house getting foreclosed. This letter was sent when most of the mortgage firms in the business where opting for an alternative of a house payment holiday for the sufferers of the storm.

Mr. Edward, unhappy with what was happening, for obvious reasons, said that he was unaware about the foreclosure suits filed by Green Tree. He said he was talking to the people at Fortress, and that the matter would get sorted out soon. He also added that he had no idea about the links of Fortress with sub-prime mortgage units. He joined the private equity firm with an intention of learning finance. His profile was to supply information about the economic behavior of the U.S. and the foreign nations. He said that the diverse nature of the firm made it very difficult for him to understand their operations.

Apart from Mr. Edward, Republican Mitt Romney is also in the list of people having their links with sub-prime mortgage companies. Mitt Romney’s association with Bain Capital, a private equity firm, is also a hot topic nowadays. Bain Capital has filed many foreclosure suits and thereof forced people to leave their houses.

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Today, the face of the New York Stock Exchange (NYSE) has changed. Though this might be a temporary change, but one can see the close relation of the sub-prime tension and worry to the NYSE, which hit a low of 9087.75 this Friday. Foreclosures and sub-prime data play a vital role in and give instant reactions in the U.S. stock markets.

The current foreclosure crisis has caused a major downfall in the real estate sector. Slow construction movements along with the sluggish pace of regional factories are some of the major implications of foreclosure. And its direct effect is seen in construction of new homes.

A report on regional factories by Philadelphia Federal Reserve Bank, gives an idea about the recent depression on Wall Street. The downfall in construction activities was at its highest in July 2007 in the U.S., and the slow pace in factory works was seen higher in the Mid-Atlantic region in August 2007.

In July, housing activity slowed to its worst by falling 6.09 percent. Permits to build houses, and future construction signs have also gone under the surface. In July, the fall in building permits was 2.79 percent, the lowest since October ’96. In the south, the condition was worse as construction in new housing dropped by 10.9 percent. But in the Midwest, housing starts showed some improvements. West and North-east also showed decline in housing starts. Earlier this July, house starts were down by 21 percent and new permits by 22.5 percent.

In August the business activities were worst than expected. The Index showed 0.0 whereas the expected figure was 9.0. In July, the situation was slightly better as the Index was at 9.2. Dow Jones saw a decline in its average by 2.66 percent before the day ended when this news came out.

The Labor Department data assured a steady job market in spite of the rise in the number of U.S. workers signing up for jobless benefits. Last week the number was 322100. Economist were, before the weekly report (August 11 report), actually expecting declines in the claims for jobless benefits to 312999 from the previous week i.e. 315999.

A variation in weekly data is ordinary. For economists, a weekly increase in the jobless claims is not something to be worried about. But they still believe in scrutinizing this activity closely because the four weeks moving average data can give us a true picture of the economy.

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The situation in Dallas County is getting worse day by day. The houses which were once occupied by happy families now have the tag of resale / foreclosure posted on them. The foreclosure tragedy is spreading its wings all over the county of Dallas. Around 16500 houses comprising a massive locality are under the gloom of foreclosure.

Banks occupying large portions of the locality, even if it is just one house in the area, affects the whole neighborhood harshly. On just a single block of Desoto there are around seven to eight foreclosures. This scene has made the neighbors whose houses are safe restless, because of the constant insecurity surrounding them all the time.

The rising dues of the homes in the area put the integrity of a neighboring owner at stake. It also affects the realty value of the neighborhood dramatically. Those who can afford make a shift. The rest of the people, who cannot move, find it very difficult to avoid or to see houses being taken away from their owners, many of them your neighbors.

Three years ago, in 2004, the situation was still under control though it was far from okay. In Places like Desoto, Duncanville, Garland, Irving, Mesquite, and Cedar Hill there were 561 cases of foreclosures in the month of August alone. But in August 2007, there are 863 cases of foreclosure in similar cities.

These vacant foreclosed houses make the neighborhood unappealing. The area deteriorates when there is junk mail, broken fences, unattended gardens etc. In such cases, homeowner’s associations have to take the responsibility of cleaning up the neighborhood. But the point is – how to keep the homeowners association going? City managers have to provide them with incentives to do so. Currently, they are made to pay twice, first to develop the general locality i.e. parking area, gardens, entry gate etc., and then again to keep the foreclosed area clean.

There are still some families who come to stay in areas which are hit badly by foreclosures. It’s a tradeoff that they take. They believe that their invested money will add up to their profits in spite of the empty foreclosed houses surrounding them. Plus they are assertive that the financial crisis leading to foreclosures will end soon. Otherwise, people will not be left with any other option, because if people keep on running from foreclosure, then eventually there will be no place left to live.

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A real picture of foreclosure mortgage can be seen in Stockton. There are at least five homes for sale from which about two to three houses have been reclaimed by the lender. Specifically, Clark Fork Circle’s northern side is the area where the mortgage tension is at its peak level.

Stockton was once considered as a favorite destination for real estate. But now, as per the estimates of RealtyTrac, it is rated as the place with the highest foreclosure rate compared to any city in the country. Earlier, having a house in Stockton was more easy and affordable than to have one in South Bay. However, the scenario has changed a lot in the last two years. Thousands of people are now facing mortgage issues.

People from other regions located themselves in Stockton searching for reasonable homes. As a result, the area became well populated, and expanded a lot. The location of Stockton was also another contributing factor. It is about 90 to 91 miles east of the silicon city i.e. San Francisco.

Even now, an average house for a family can be bought for $355,000. The main reason for increasing foreclosures in this area is sub-prime lending. Many current deals were supported by sub-prime loans. Lenders provided complete loans with minimal down payments to the homeowner, but the sudden increment in the interest rate later on affected many of these deals.

Many nonprofit organizations are currently working on this issue. They are asking lenders to freeze these foreclosures. They are also extending credit to low salaried families. Senior citizens and immigrants are affected most by the lenders actions.

Not only Stockton, but also other cities of California like Modesto and Merced are among the top cities for foreclosure filings. All of them were predominantly made up of agricultural land earlier. RealtyTrac findings rank California at number three in foreclosure mortgages. The other top places are occupied by Nevada and Colorado. DataQuick, another real estate tracking company, confirmed that the foreclosure crisis was hitting the state the worst in the last two decades. There have been 54,100 cases of delinquent loans in the state between May and August of this year.

Short sales, as the relief, are extended to homeowners by some of the brokers in Stockton. Short sales means the homeowner can pay back a bulk of the amount to the lender, if not the entire amount. But how many homeowners this will save is a big question since there are thousands of people affected by the foreclosure crisis countrywide.

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The concern and chaos in the real estate mortgage market in the U.S, due to the rising rate of foreclosures, can be seen among the high-end income group home buyers as well, as rates of jumbo loans are also being affected along with the rates of sub-prime loans.

The falling rates of the treasury bonds – the lowest in the last 10 years – have increased rates on jumbo loans. American Home Mortgage Investment, which is the 10^th largest mortgage provider in the country, has surrendered itself to the turmoil that is taking place in the mortgage sector and has filed for protection from creditors and declared itself devoid of funds.

The situation is reaching alarming proportions in the U.S. Aegis Mortgage Corp. in Houston is finding it very difficult to manage, and has recently fired 60% of their staff. Another company, Luminent Mortgage Capital Inc. in San Francisco had to delay its dividends to pay back creditors recently.

Lenders have downsized the number of people to whom sub-prime loans are given. They have even raised the rates on jumbo loans given to people with good credit records. The limit of $416,999 for loans extended for purchase and guarantee has been exceeded, and this is what has caused lenders to take this decision.

Jumbo loans share 16 percent of the entire loan market and are common in places like New Jersey, California, New York City, Chicago, Washington D.C. and other areas with high value of real estate. Initially, an average rate that the lenders were giving was 7.1 percent. From last week the rate has increased to 7.35 percent. In the middle of May the rate was just 6.49 percent.

The implication of this move will be seen mainly in the prices of homes generally bought by people of the middle-income group segment. Even the families who can afford big down payments are finding it very difficult to go in for property purchasing.

Investors buy mortgages as a security device, but now they are taking a very cautious approach due to the current fragile sub-prime loan market situation. This in turn has made lenders apprehensive in issuing mortgages.

Fear of rising foreclosures has made the investors very careful and they are now not willing to invest in any real estate loans which are not guaranteed. Therefore, the only option that the lender has is to hold the loan for the time being or extend it only to those who actually qualify for it and meet all the requirements.

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People from all across the country are affected by foreclosure. Starting from the homeowner who is about to lose his home, to the guy interested in investing in a foreclosed house, it seems foreclosure is a major topic of discussion in real estate, and the only person who looks like he’s having a good time is an agent.

Agents consciously take up the foreclosures project to gain revenues. Bargaining power is less in foreclosed properties. Presently, not many discounts are available as these homes are priced competitively by banks. Also, agents don’t love to make deals with clients who underestimate the monetary value of a property.

Still there are people who get lucky and manage to find themselves a good bargain, though the drawback of such deals are that there is always some repair work that needs to be done such as fixing of the garbage disposal behind the house, or mending the fence and so on. Though, for a good bargain, people don’t mind doing repairs.

Foreclosure proceedings begin only after the owner has not paid the mortgage payments for three consecutive months. In the meantime, the owner can look for possible viable options to save the house. One possible option for escaping foreclosure is a “Forbearance Agreement”. This agreement provisionally lessens the mortgage payment. In this, after the foreclosure filing, the owner has 90 days in hand to make the default payment. If he does not do so, the bank files notice-of-trustee sale. Still, if the payment is not done within the next 21 days, a sale date is scheduled.

The bidding amount generally includes the owed amount along with fees and penalties. In case of a ‘no sale’, the property is owned by the bank and the lender is free to either sell it or seek an auction house. Agents typically want to work with lenders and not with banks, as the former tend to act faster when taking decisions, as compared to the latter who responds relatively slower.

Though not all agents are able to handle foreclosure dealings, at the end it’s the money that matters. People always invest in someone else’s adversity. Though foreclosure gives the negative approach to the society and is growing at an alarming rate, there are people who are earning their bread and butter from it, and doing a good job at that.

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