Foreclosure Roundup

There were a number of submissions to the Foreclosure Central roundup. I can only assume that most people were tied up with taxes, as very few of the submissions had anything at all to do with foreclosure.

The most insightful blog author regarding foreclosure was Andrea Dickson at Wise Bread. In her article "How to Avoid Foreclosure" she gives homeowners who might be facing foreclosure some real tools and steps to follow.

I also like that Andrea touches on the community impact of foreclosures, stating "At least 4 properties (all rentals, all owned by the same person) on my street alone are being auctioned off within the next month, and that kind of activity is going to affect my property values..." Scary stuff.

Each state's foreclosure process is somewhat different. To see an overview of each state's foreclosure process, go to Foreclosure Basics - By State.

Meanwhile, as more investors shift from residential to the more stable commercial side, Craig S. Higdon at Investment Property Insider explains some basics with Commercial Real Estate Credit, and urges potential investors to "Weigh your risks carefully"

Subprime mortgages and foreclosure statistics continue to dominate real estate-related news stories.

Nationwide, CNN Money shows that foreclosures are up 7% from March to February of 2007, a whopping 47% increase from last year at this time.

For the third straight month, Nevada leads the nation in foreclosures. Las Vegas has the second-highest foreclosure rate among cities monitored by RealtyTrac. The article reports that "Nevada reported 4,738 foreclosure filings, more than triple the number in March 2006. Its foreclosure rate showed 1 filing for every 183 households, more than four times the national rate of 1 per 775 households"

More bad news for Florida. RealtyTrac says that Florida ranks second in the nation for foreclosures with an increase of 33% from February to March of 2007.

The San Francisco Chronicle reports Foreclosures, default notices hit 10-year high. "The number of California homeowners who defaulted on their mortgage payments jumped to its highest level in almost 10 years, exacerbated by slowing home sales and adjustable-mortgage resets."

But Washington State's real estate market remains strong. The Seattle Times shows Foreclosures in state fall, bucking national trend, while the Atlanta Business Chronicle points to a bounce in that state's foreclosure rates as well.

Financial Services Chariman Barney Frank is calling for a quick pass of legislation that would set national protections for all mortgage borrowers and clearer disclosure statements.

Thankfully, not everyone is jumping on the bandwagon for a legislative bailout. The Cincinnati Enquirer reports Go slow on foreclosures, Congress told. "Federal regulators and mortgage lenders this morning warned congressional lawmakers against moving too aggressively to regulate the mortgage industry in response to a soaring number of home foreclosures."

Senator Chris Dodd was one of the earliest and most vocal proponents of legislating the nation out of the subprime debacle. Today it seems he has made a quick about-face. He is quoted as saying "I'm not overly anxious to legislate," he said. "We think there may be enough laws on the books."

Fannie Mae and Freddie Mac are developing new types of loans to help distressed borrowers with high-risk mortgages, including a possible 40-year mortgage.

Blog Carnival "Foreclosure Central" #1

This month the news has been packed with doomsday talk about subprime loans, mortgage fraud, and market correction. It seemed like a logical time to start a "Foreclosure Central" blog carnival.

The reality is, foreclosure rates have been steadily rising over the past six months. Many Americans are looking to the originators of these loans for their culpability. After talking to a few mortgage brokers I know, I do understand their origination thoughts.

Historically, lenders counted on the fact that home ownership is the cornerstone of the American Dream. They knew that the vast majority of us would subsist off of pancakes and ramen noodles for years on end to make the note each month. I know many white-collar professionals in southern California who have been doing just that.

Unfortunately, a number unscrupulous lenders preyed on this fact and "helpfully" refinanced people into notes they could never meet five years later. The broker got his hefty commission and called it a day. Some people who hold these notes did so to meet the demands of a life crisis. Others did it because they didn't read the fine print and thought they were getting a deal (in which case, I think they should refrain from signing any other contracts in the future).

Still others willingly and knowingly committed mortgage fraud. And now we're all up in arms over this fact, as it makes the "soft landing" that much further out of reach.

But while the inevitable foreclosure boom follows the home ownership boom, a lot of good people will get caught in the undercurrent. This is really unfortunate, and I know we're all pulling for the folks who face some serious belt-tightening in the coming months.

For the benefit of home owners, investors, and real estate professionals, here is what the blogosphere would like for you to know about foreclosure:

FORECLOSURE CENTRAL #1

TOP HONORS

Silicon Valley Blogger gets the (very subjective) First Place award for the article "6 Ways 6 Ways To Protect Yourself From Different Types Of Mortgage Fraud". The articles at http://thedigeratilife.com are always well written, and this one is no exception.

This is a great article for consumers, who can protect themselves from becoming unwitting co-conspirators in any number of fraudulent schemes. The article walks us through the different types of fraud and includes some great links on identifying and reporting mortgage fraud and abusive lending.


FOR CONSUMERS

Michael Emilio Rodriguez offers the article "8 Steps to Getting Your Finances in Order for a Mortgage. It's a good primer for first-time homeowners, particularly since those 100% loans seem to be going the way of the dodo.

I would add one piece to Michael's checklist. Since many homeowners will be paying more to own a home than they are paying in rent, start paying that higher amount now while you're planning to buy. Take the excess and put it into your house fund. Not only is this a way to cushion your savings for the home purchase, but you will acclimate to paying the higher amount now, rather than after close of sale.


Michael Cook writes in with "Influence Real Estate Appraisals: How an appraiser values your home can increase your property's worth". If you're selling your home this season, Michael offers some solid pointers on getting the most out of your appraisal.


Alvaro wants homeowners to know that foreclosures are difficult and emotional situations, and shares some exercises and tips for better stress management. Certainly, if you are facing foreclosure, you will want to check out the article "Stress Management Workshop for International Women's Day".


FOR INVESTORS AND REAL ESTATE PROFESSIONALS

Walt offers a great reminder that "If You Want To Be Great, Money Should Not Be The Motivation". This is a wonderful reality check to the myriad "get rich quick" schemes in the world, and is certainly not limited to real estate.

Walt's piece underscores the reality that, in this life, we are all going to stumble and sometimes fall. Some days, the only reward is the work itself. Setting out with the intention of "getting rich" is akin to "getting famous." If you don't have some degree of passion for the endless work load, it's not going to pan out.


I was excited to see Craig S. Higdon join this carnival. As a 14-year veteran of commercial real estate lending, Higdon is uniquely qualified to speak to the investment side of real estate. Everyone should read his article "Commercial Real Estate Loan Myth Debunked!"

Goodness knows we like debunking myths around here, so Craig's article is a great addition to the carnival. As commercial real estate has remained strong in contrast to the residential market, I imagine he's had more and more people showing up in his office to do some similarly creative financing for commercial properties. If you're shifting into the commercial side, get thyself to Craig S. Higdon's website now.


THE LIGHTER SIDE

We get to wrap this up with a bit of a chuckle, thanks to the BiggerPockets.com Real Estate Investing Community. Check out "A Few (really crappy) Real Estate Domains You Could have Had". My personal favorite is www.thishousewilldrainyourwallet.com


A big thank you to everyone who contributed to Foreclosure Central #1. This will be an ongoing carnival for a little while, with deadlines on the 1st and 15th of each month.

If you would like to contribute to the next Foreclosure Central blog carnival, please use this Submission Form.

Call For Carnival Submissions"Foreclosure Central"

Unfortunately, we've had a significant amount of request for foreclosure information. With that in mind, we are opening the floor to submissions from homeowners, investors, and real estate/mortgage professionals to share what they know on this topic.

This will be an ongoing carnival, with submission deadlines at midnight (Eastern) on the first and fifteenth of each month.

Sumbit your Foreclosure article here.

Thank you in advance for your participation. We look forward to seeing your foreclosure information submissions!