Foreclosure Crisis Heating Up Again: Experts Predict Negative Equity Could Make Things Worse

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!” Find Trusted Vendors, eg, Foreclosure Lawyers, Mortgage Consultants, Cleaning Co’s, Etc.

The foreclosure crisis started in earnest in 2007; that’s five years it has drug on and on and on. And, every time it seems like there’s some light at the end of the tunnel, another thing happens that prevents the housing recovery from getting under way.

The latest stumbling block is the negative equity situation, ie underwater homeowners. This was predicted – and discussed – right here on this blog over two years ago. In the post, Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012, we stated:

Home Foreclosure: Why the Average Joe Is in Deep Doo Doo

According to the article, Foreclosure crisis phase 2: The negative equity dilemma:

“In the next 12 months it’s going to be tragic – most people are just starting to fall behind now … According to the Center for Responsible Lending, a nonprofit research and policy group, as many as 9 million homeowners could go into foreclosure between 2009 and 2012.”

Many middle-class homeowners are accustomed to being able “tap their home for equity” (eg, take out a home equity loan/line of credit) when things get tough or they need extra cash to send the kids to college, pay for a new roof, or pay for an unexpected illness not covered by insurance, for example. 

That option is gone.

Now all of this is coming to pass. In the article, Negative Equity Problem Could Make Foreclosure Crisis Even Worse, summed it up, stating:

. . . things could get a lot worse thanks to the gigantic negative equity problem, which has pushed many homeowners to the brink of foreclosure and put immense pressure on household finances.

For the time being, the vast majority of those 12 million or so Americans with underwater mortgages continue to make their monthly payments, but the longer the housing market and economy stay stuck in the mud, the more likely it is they could run into trouble.

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With more foreclosures on the way, foreclosure clean up is an excellent business to start. Get your foreclosure cleanup “Business in a Box” and start this lucrative business right now for 40% Off! Click the box to learn how.

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The Obvious Solution that Lenders are STILL Resisting that Could Go a Long Way Towards Solving the Foreclosure Crisis

Lenders need to get their collective heads out of their a**es and start working with homeowners (ie, cut principal balances), especially now that the “stigma” of foreclosure has disappeared for many.

Many homeowners are simply tired of living in financial limbo. They want to get on with their financial lives. And for many, this means needing to know if they’re going to ge to keep their homes (ie, get an affordable payment), or file bankrupcty/face foreclosure and move on.

We discussed why voluntary foreclosure is not only an option — it’s becoming a more attractive option for many homeowners the longer the foreclosure crisis drags on. And, if lenders don’t start playing (fair) ball, they’re going to be the ones left holding the bag.

Ironically though, it’ll more than likely be taxpayers who’ll bail them out.

Related Posts

Foreclosure Crisis to Drag on for Another 9 Years?

Timeline For Foreclosure In All 50 States  

Home Foreclosure: The New Credit Standards to Qualify for a Mortgage Brought on by the Crisis

“Cash for Keys” Can Help if You Have a House in Foreclosure & Can’t Afford to Move

Home Foreclosure News: Why Home Prices May Be Depressed for Some Years to Come & What It Means for the Average Homeowner

Some Banks are Purposely NOT Foreclosing on Homeowners in Default: Here’s Why

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs.

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Copyright © 2012 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author

Home Foreclosure News of the Day: Foreclosures Surging, Fines Levied for Illegal Military Foreclosures, and the Effects of Shadow Inventory

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!” Find Trusted Vendors, eg, Foreclosure Lawyers, Mortgage Consultants, Cleaning Co’s, Etc.

Foreclosures surge in first half of 2012

Foreclosure activity increased in the first six months of 2012 in 125 of the nation’s 212 metropolitan areas with a population of 200,000 or more, according to the latest data from market researcher RealtyTrac. Despite the increases from the second half of 2011, 129 of the metro areas still posted year-over-year decreases in foreclosure activity.

Read the full article on the 2012 surge in foreclosures.

Related Posts on This Subject

Home Foreclosure News of the Day: Is the Housing Crisis Finally Coming to an End? The Answer May Surprise You

More Foreclosures Likely to Happen This Year — and Why That’s Actually a Good Thing

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Summer is in full swing! And, there’s plenty of foreclosure cleanup (and RE-related) jobs out there. Get your foreclosure cleanup “Business in a Box” and start this lucrative business right now for 40% Off! Click the box to learn how.

Copyright Violation Notice: If you’re reading this entire post (snippets are fine) on any blog other than ForeclosureBusinessNews.com, it is stolen content. Scraping content (eg, using software to illegally copy and paste copyrighted content from websites and blogs) is becoming a common practice which affects every site owner. So if you see this content someplace else, please take a quick moment to send an email to [info]at[ForeclosureBusinessNews.com] (remove brackets, of course) so that we can take the appropriate action. Thank you in advance for your help.
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Capital One To Pay Millions After Being Charged With Improper Military Foreclosures

The government says Capital One wrongfully foreclosed on some homes and improperly repossessed some cars. In addition, the government says the bank obtained wrongful court judgments against some service members and improperly denied interest rate relief on some credit card and car loans. . . . In a settlement Capital One will pay $7 million in damages . . .

Read the rest of this article on Capital One Military Foreclosure settlement.

Related Posts on This Subject

Home Foreclosure News of Note for Veterans / Military Members

Home Foreclosure News of the Day: Bank of America to Pay $20 Million for Illegally Foreclosing on Military Homeowners

Help for Veterans and Military Families on How to Prevent Foreclosure

Home Foreclosure News: Rhode Island Votes to Squash Foreclosures for Active-Duty Military Personnel (& Other Help for Soldiers Trying to Stop Foreclosure)

Foreclosures: Wave of Shadow Inventory Forced onto Market Could Cause another Housing Meltdown

If this wave of foreclosures (shadown inventory) is released into local markets without concern for their impact on home values, many of our local real estate markets could be threatened.  Thus, the long-awaited recovery, so critical to restoring value and equity back to our real estate economy and American homeowners, could saddle several major markets with foreclosures for years. 

Read the rest of this story on how shadow inventory could affect the housing recovery.

Related Posts on This Subject

Understanding the Robosigning Mortgage Settlement Offer: 8 Key Things Every Homeowner Facing Foreclosure Should Know

Home Foreclosure News of the Day: Some States Not Using Foreclosure Settlement Monies to Help Struggling Homeowners

White House Wants to Convert Foreclosed Homes to Rentals: The Consequences of Doing So (Hint: It Ain’t Good)

What the Foreclosure Settlement & More Short Sales Mean for Homeowners Facing Foreclosure

The OTHER Foreclosure Settlement: You May Be Eligible to Be Paid TWICE – Even If You Didn’t Lose Your Home to Foreclosure

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs. Always look under the “Recent Posts” heading to find the latest job listings.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright ©2012 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Foreclosure Cleaning, Construction & Commercial Supply Contracting/Job Leads for 7/26/2012

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!” Find Trusted Vendors, eg, Foreclosure Lawyers, Mortgage Consultants, Cleaning Co’s, Etc.

FYI: See this post for some helpful info Advice on Bidding for Foreclosure Cleaning and Other Lite Commercial/ Landscaping / Construction Type Jobs.

Home Inspectors Needed (Atlanta, GA): Property management company seeking independent contractors to complete cosmetic home inspections. Responsibilities include, but are not limited to: doing a walk-thru home inspection (each room); taking photos of each room; preparing and submitting detailed inspection reports main office via email; etc. Pay: $100 per home inspected; can do several in one day. Get full details on this property preservation job.

Cosmetic Home Inspectors Needed (Brentwood, CA): Property management company seeking independent contractors to complete cosmetic home inspections. Responsibilities include, but are not limited to: doing a walk-thru home inspection (each room); testing light switches, toilets, showers and sinks; providing accurate, detailed pictures of each room; properly completing and submitting inspection reports ; etc. Pay: $100 per home inspected. Get full details on this property preservation job.

FYI, learn How to Pass a Property Preservation Quiz for Foreclosure Cleanup Subcontracting Work and land more foreclosure cleaning/property preservation jobs!

Want to know more? Learn why property preservation companies are excellent places to look for foreclosure cleanup jobs.

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Summer is in full swing and as these job listings prove, there are plenty of foreclosure cleanup (and RE-related) jobs out there. Get your foreclosure cleanup “Business in a Box” and start this lucrative business right now for 40% Off! Click the box to learn how.

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Here Are More Related Posts that Can Help You Learn the Industry & Get More Foreclosure Cleaning-Type Jobs

Want to Know Where to Find Foreclosure Cleanup Clients For Your Business? Look No Further than This . . .

Advice on How to Bid on Janitorial and Commercial Cleaning Jobs

Foreclosure Cleanup Jobs: New Biz Owner Lands 10 Jobs from Property Preservation Company

Foreclosure Cleaning Jobs: Why Landlords Are Fertile Marketing Ground for Foreclosure Cleanup Businesses

Foreclosure Cleaning: How to Get Non-Foreclosure Cleaning Jobs

Foreclosure Cleanup: Many Cities Allocating Gov’t Funds to Cleaning Foreclosed Properties

FAQs About Cleaning Foreclosures a Living

Foreclosure Cleaning Business: Why You Should Never Discuss Rates or Prices Over the Phone

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs. Always look under the “Recent Posts” heading to find the latest job listings.

Foreclosure Advice on Bank Walkaways: Has Your Lender Abandoned Your Home Loan? 5 Signs They May Have

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!” Find Trusted Vendors, eg, Foreclosure Lawyers, Mortgage Consultants, Cleaning Co’s, Etc.

Many homeowners are in limbo these days because even though they haven’t paid their mortgage for months, their lender has yet to foreclose. We’ve discussed this on a number of occasions – over a few years — here on this blog, ie:

Foreclosure Advice: What to Do When You’ve Stopped Making Mortgage Payments, But the Bank Won’t/Hasn’t Foreclosed

Home Foreclosures: Why So Many Homeowners are In Limbo When Trying to Refinance or Modify Their Home Loans Now

Foreclosure Advice: “My Debt Has Been Discharged in Bankruptcy but My Lender Hasn’t Foreclosed? Do I Still Have to Pay HO Insurance, Property Taxes, HOA Fees, Etc.?”

Nowadays, we have more insight.

What Is a Bank Walkaway?

Many banks are simply abandoning many properties instead of foreclosing on them. It’s what’s called a bank walkaway, of which the official definition is:

A bank walkaway is a decision by a mortgage lender (a bank) to not foreclose on a defaulted mortgage (when the borrower has ceased to make the payments), or to not complete foreclosure proceedings (to “walk away” from the mortgage). These are sometimes referred to as abandoned foreclosures or stalled foreclosures, though this latter term is also used more broadly when the foreclosure process has stalled for other reasons.

Why Banks Walk Away from Certain Properties Instead of Foreclosing

If you’re thinking, “Why would a bank walk away from a property,” the answer is simple economics. In most cases, it’s because the costs of foreclosing – which includes everything from legal fees to ongoing maintenance— often exceed the value of the property.

And, this is what can present major problems for homeowners. Why? Because many think that once their lender initiates foreclosure, then it’s time for them to skedaddle. But hold on, that’s usually not the case, especially today. As we discussed in a recent post here, unless and until your lender officially forecloses, the best course of action is to stay put because as the record of owner of the property, YOU are still responsible for the upkeep of the property. You can be fined for everything from HOA fees, to city fines for an unkempt property.

Take the case of homeowner Jeannette Smith, a Cleveland Heights resident. Her lender initiated the foreclosure process – to the point of it being put up for auction on the courthouse steps. But, her property wound up being a “bank walkaway.” Following is what eventually happened to her.

Jeannette faced foreclosure several years ago and left her property at the point of Sheriff’s sale. In doing so, she found alternative housing and signed a two-year lease agreement. Shortly thereafter, she found out that her mortgage servicer ultimately withdrew its foreclosure action. Jeanette was unable to break her newly-signed lease and was left with a vacant property, and was cited and charged by the City of Cleveland Heights for the cost of maintenance.

This unfortunately all-too-common story illustrates why it’s important to stay put – unless and until the foreclosure process is complete.

Now that we’ve discussed some background on bank walkaways, let’s discuss some signs of it.

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Summer is Here! And, what better time to start a foreclosure cleanup business! Get your foreclosure cleanup “Business in a Box” and start this lucrative business right now for 40% Off! Click the box to learn how.

Copyright Violation Notice: If you’re reading this entire post (snippets are fine) on any blog other than ForeclosureBusinessNews.com, it is stolen content. Scraping content (eg, using software to illegally copy and paste copyrighted content from websites and blogs) is becoming a common practice which affects every site owner. So if you see this content someplace else, please take a quick moment to send an email to [info]at[ForeclosureBusinessNews.com] (remove brackets, of course) so that we can take the appropriate action. Thank you in advance for your help.
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5 Signs Your Bank May Have Walked Away from Your Home

1. Have Property Taxes Been Paid? Usually, after a homeowner stops paying the mortgage and other fees associated with homeownership (eg, property taxes, HOA fees, homeowners insurance), the lender will step up to the plate and pay these.

If the lender hasn’t paid property taxes – especially for 2 years or more – this is a sign that they may have walked away from the property.

2. Is the Lender Paying for Insurance on the Property? Same reasoning as above applies. Learn lender-imposed insurance on properties in foreclosure.

3. Is the Property Being Maintained? Once a homeowner who’s facing foreclosure leaves their home, the lender will usually step in and maintain it via property preservation companies.

As an aside, this is one reason lenders LIKE for homeowners to stay put – even when they’re not paying the mortgage. It costs to maintain empty properties, but if the homeowner stays put, then lenders don’t have to spend money to maintain the properties. Also – because the home is occupied, lenders don’t have to worry about crime/vandalism of an “abandoned” property.

4. Has the Foreclosure Process Been Started? In a normal real estate market, once a homeowner misses a couple of mortgage payments, they’re usually served with foreclosure papers. Not so today. It can take lenders months – or years! – to get around to doing so. If you stopped paying your mortgage months (or years ago) and you still haven’t been served with foreclosure papers, then there might be aslight chance that your lender has walked away from your property.

This is one of the weakest signs that your bank has walked away from your property by the way, as it’s taking lenders a few years in many cases to get around to even starting the foreclosure process.

5. How Long Ago Was the Foreclosure Process Initiated? Piggybacking on the last point, in many cases, even when a lender initiates the foreclosure process, many of them don’t complete it. Why? As explained in the New York Times article, Banks Starting to Walk Away on Foreclosures:

Oftentimes when the foreclosure [process] starts out, it’s a viable property . . . [but] the soft housing market and the vandalism that often occurs when a house sits empty are the two main factors influencing the mortgage holders’ decisions to walk away, said Larry Rothenberg, a lawyer for Weltman, Weinberg & Reis, one of the larger creditors’ rights firms in the country.

Again, simple economics.

It’s difficult to find a lot of hard and fast data on bank walkaways, as many lenders do it “quietly,” as one article put it. But, if all of the above factors relate to your property, your lender may have abandoned any interest in your property.

It’s highly unlikely that lenders are walking away from properties in good condition in decent neighborhoods. So don’t get your hopes up if this applies to you.

How to Buy a Bank Walkaway Property

If you’re interested in purchasing a bank walkaway property, be prepared to do some digging and be patient. Real estate laws vary from state to state, in and many cases, from county to county – especially when it comes to purchasing foreclosed properties (eg, tax sales, bank walkaways, short sales, etc.).

Following is the response an attorney gave to a homeowner who asked about acquiring the abandoned property next to his home.

You would need to talk to the tax assessor to seek to acquire the tax deed before sale, it is up to them to allow you to buy the tax deed and acquire the house. But if you do so, then the bank still has a lien and you take the house subject to that lien and the bank can redeem or then come back and subsequently seek to sue you for the balance on the lien. The other option is that you can contact the bank and negotiate the purchase with them and then you would have to pay off the taxes as well. 

Following is more insight into how to proceed with lenders who won’t foreclose. And, here’s an interesting series on what happens when a bank won’t officially foreclose (even after initiating foreclosure proceedings). It provides real insight into the frustration many homeowners facing foreclosure have with lenders these days.

Hope you’ve found this info on bank walkaways helpful. If so, please share it on your social media outlet of choice using the Share bar at the end of the very end of this post, or the one at the very beginning of it.

Related Posts

How to Stop Home Foreclosure For Over 2 Years Without Making Payments: Do it Yourself for Free — Here’s How

Foreclosure News: Homeowner Hasn’t Made Mortgage Payment in 8 Years, Is Still in His Home & There’s Nothing His Lender Can Do About It

Home Foreclosure News: Woman Successfully Stops Bank from Foreclosing for Over 25 Years; She Hasn’t Made a Mortgage Payment Since 1985

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

Timeline For Foreclosure In All 50 States  

Buying Foreclosures Cheap — for as Little as $500 — Is REALLY Possible! Here’s Proof

Cleveland Foreclosures: City Giving Land Away — The Reality of Foreclosure and What It’s Going to Take to Stop the Crisis from Getting Worse

Do I Still Have to Pay Taxes After a Foreclosure? The Answer Might Surprise You

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs. Always look under the “Recent Posts” heading to find the latest job listings.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright ©2012 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author. Legal Disclaimer: The information dispensed on this blog is not to be taken as legal advice; it is for general purposes only. Please consult a qualified attorney — in your jurisdiction — before taking any action based on the information listed here. 

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