It is no surprise that Nevada, Florida, Michigan, California and Colorado are at the top of list of states with the highest foreclosure rates in 2007. I was interested to see how us here in New Jersey stacked up:
New Jersey
Households in some stage of foreclosure in 2007: .902%
2007 foreclosure filings: 53,652
Percent change from 2006: 34.06%
Percent change from 2005: 52.75%
Many homeowners are feeling the double pinch of being unable to make their monthly payment obligations. Many people refinanced their homes and used the appreciated equity to pay off high credit card balances. Unfortunately after the cards were paid off, many people charged up large balances again. What happened next? Refinance the house again and pay off the cards. Now, with the market in the toilet, their homes and their cards are maxed out and they are unable to make either payment.
See this report from the Associated Press about the sharp increase in unpaid credit card bills.
Home sales have fallen throughout most of the country, but real estate agent commissions appear to be holding steady at just over 5%.
The total amount of commissions paid to agents and brokers dropped this year as home sales tumbled. Agents are expected to collect $55 billion in commissions this year, compared to about $65 billion in 2006, $68 billion in 2005 and $61 billion in 2004.
Americans paid $19 billion more in commissions in 2007 than in 2000 largely because of the surge in home prices during the boom. But Realtors aren't celebrating. The number of agents ballooned during the boom when business was plentiful. These days, listings often linger for months.
Over at AllFinancialMatters JLP is discussing a recent Wall Street Journal article about the higher rate of people falling behind on their car loans.
If you are a homeowner who is falling behind on your home and your car, let your car go. Stop making payments, let it get repossessed, and throw all of that car payment money towards keeping your home out of foreclosure. Often times we see homeowners who are about to lose thier house making sure they keep their $500+ car payment current.
Its better to deal with a deficiency from a repossessed car then it is to deal with a foreclosure.
The latest government bail out proposal reminds me a bit of Seinfeld. It is expected that the President will announce that the government has struck deals with some of the larger lending institutions where they will freeze the teaser rates *on some* of their subprime mortgage loans. Not everyone with an ARM that is about to rest will have their low introductory rate frozen for the next 5 years though.
If you are able to make your current teaser payment, and will also be able to make your adjusted payment - No Freeze For You
If you are unable to make your current teaser payment, and you will not be able to make your adjusted payment - No Freeze For You
Only those who can make their current teaser payment and will be unable to make their new adjusted payment will be eligible to have their payment frozen for the next 5 years.
Step to the left.
New Jersey announced a new foreclosure prevention effort to help thousands of the state's borrowers who facing foreclosure.
In addition to counseling and financial help to owners, a new task force has been created which will study and find solutions to troubled mortgages. There will also be a $433 million mortgage refinancing bailout.
There are close to 8,000 New Jersey borrowers with subprime mortgages that went into foreclosure in 2007 and there are another 11,000 who are close to three months behind.
With the way the market is going, builders are slashing prices of their existing inventory and offering incentives unheard of months ago.
For homeowners who jumped in at the height of the boom, the discounts aren't so good. In Quayside Court, a quiet cul-de-sac in Huntington, many residents who bought last year suddenly own homes worth a whole lot less--making it hard for anyone who has to refinance, sell, or borrow against the equity.
BusinessWeek story
We Can Help! We have programs to help stop foreclosure regardless of your situation.
This Saturday, the New York Times had an article about foreclosure auctions which explained that there are not as many bargains at these sales as one would think. Even with the record number of foreclosures happening across the country, homes in foreclosure only represent 2% of all mortgages.
Many people believe that with all of these homes going into foreclosure that it is easy to find bargains at the sheriff sale. I can tell you from experience, it is not. I have seen many inexperienced first-time buyers, or novice investors, attend sheriff sales and either pay too much for the property because they didn't do their research before hand to know what the property was actually worth, learn what repairs the place needed or they just got caught up in the excitement of bidding (what is an extra 1, 2, 5 10 thousand+? - I am still getting it at a steal!)
The pitfalls of buying at the sheriff sale is not reserved to people looking to buy a home for their family to live in. Novice investors lured by the prospect of making a large profit also fall victim at the sale. From the NYT article:
Many investors have a real estate or construction background. Others sign up for classes. After taking a seminar in buying foreclosures, Todd Vela, a salesman for a nutritional supplement wholesaler, bought two houses nearing foreclosure last fall not far from his home in Grand Rapids, Mich. He said he paid about $20,000 for a dilapidated four-bedroom house in a neighborhood where other properties are worth triple that. He said the house needs $25,000 in repairs, including a new roof and new kitchen, and he hopes a contractor will buy it as-is for about $40,000, though he would take less. On the second home — an 1,800-square-foot four-bedroom — he paid about $60,000 and made $5,000 in cosmetic improvements. He hopes to sell it for about $90,000. Even though Mr. Vela has not been able to sell either house, he remains upbeat about buying foreclosed properties and intends to resume shopping once he sells one of his investments.“I’ve been good on picking up properties, but I haven’t been good on an exit strategy,” said Mr. Vela, who paid cash. “I’ve had to hold them longer than I originally liked. That’s O.K. That’s part of the game. It’s affected my holding times but not my profit.”
The current real estate market is unstable and extremely volatile. An increasing number of people that we work with are investors who got into the market at the top and are either at risk of losing their investment property in foreclosure, or are bleeding money each and every month.
If you are a homeowner or investor that wants to sell your home or investment property contact us today.
Tags: 
"investment property" : 
rental : 
sheriff sale : 
auction
Facing foreclosure is an event that puts an unbelievable amount of stress on homeowners. Before you do something like Ms. Christman is accused of, stop, take a deep breath and honestly look at your options. Before you spend $2.81 and find a book of matches, call 888-611-0914 or fill out this form.
Gaines Twp.- Kent County Deputies have arrested the homeowner for the September 1st fire at 6825 Deer Cove Drive.
Cheryl Marie Christman, 38, was arrested and is being lodged in the Kent County Jail for intentionally setting fire to her home. Fire investigators believe that Christman was attempting to collect insurance money because the home was going to be foreclosed four days later.
Christman was arraigned this afternoon for the arson charges. Bail was set at $20,000. Her preliminary court date is set for Oct. 1st at 2 p.m. reported by WZZM13
Tags: 
foreclosure : 
fire
Sorry about the lack of posting as of late but we have been really busy working on a few purchases. In one matter we are working with an owner facing a foreclosure sale in the next week. The house in question needs some work and owner is about $15,000 behind in payments, penalties and interest. We are bringing those current and giving them some cash so they can move on with their life. Time is of the essence here so most of our time has been spent dealing with the mortgage lender, and inspectors and contractors.
Posting will resume at a more frequent pace soon - In the meantime, take a look at this post by The Consumerist which gives some of the deceptive advertising language lenders have used and borrowers should watch out for.
Tags:
mortgage : 
new jersey : 
sorry (for not posting)
At least 8,000 of the 143,898 New Jersey borrowers who opted for subprime mortgages went into foreclosure in the first half of this year.
Of the 15,426 first-time foreclosures filed in New Jersey in the first six months of this year, 53 percent involve borrowers with adjustable rate mortgages. Nationally, the figure is 37 percent for the same period.
Black and Hispanic borrowers, who hold 41 percent of subprime loans, have been hardest hit.
A 2005 Freddie Mac survey found 61 percent of delinquent borrowers did not know there are workout options, and significant percentages of those borrowers did not return lender phone calls out of embarrassment or a lack of faith that anything can be done to help them.
The Federal Housing Administration will provide information on home ownership, mortgages and dealing with lenders on Sept. 29, from 9:30 a.m. to 2 p.m., at Essex County College, 303 University Ave., Newark. People can register by calling 1-800-CALLFHA.
