BanglaTown. This is what people called the north Detroit neighborhood where a mix of artists, African-Americans, Bangladeshis, Ukrainians and Polish, live and set up their businesses. They heard about the city’s cheap homes and snapped up one for their own.

According to April data from the Detroit Association of Realtors, the average property price in the city dropped to $11,533. Market analysts attributed the drastic decline in average home price in the area to the growing number of abandoned and vacant homes on REO property listing.

Before the massive layoffs at General Motors and other corporations in the state, Detroit has already the lowest home value in the whole of Michigan.

Investment adviser Mike Shedlock said that those artists living in BanglaTown are doing the city a great deal of help by stabilizing neighborhoods that are falling into deterioration.

Most of the houses in BanglaTown were vandalized and stripped to the bone. But this did not deter some artists who took the risks, bought houses on REO property listing and renovated them to make them livable.

Take for example the case of an artist couple who bid on a property for $100. This couple rehabilitated the 1920s brick property and installed energy-savings materials such as LED lights, solar panels, high-end insulated windows and recycled wood.

The couple also plans to install a security system with steel doors and hurricane-proof windows and experiment with using a car battery to power an air-conditioning unit.

Meanwhile, Michigan will offer $25,000 to individuals who purchase a property in the city, provided that they pay about 1 percent of the total amount and make it their primary residence. Under the program, speculators and landlords are not eligible.

Michigan State Housing Development Authority director Mary Townley said that the funds are part of the $263 million money allocated to various states under the Housing and Economic Recovery Act of 2008. The grant is intended to encourage buyers buy deteriorating houses on REO property listing and to help them bring these homes up to code.

A report released by Brookings Institution showed that Detroit is one of the U.S. cities with the lowest economic performance, ranking among the worst in terms of average wages and unemployment, had high foreclosure rates and low market value homes.

Artists Buy Cheap Houses on REO Property Listing is a post from: Foreclosure Homes Investing

In Tarrant County, there are about 1,000 foreclosed homes available for sale. While these are priced at very attractive bargain prices, exercise caution because Texas does not require disclosures in real estate sales. Oftentimes though, list prices are lower than tax appraisal values and most mortgage lenders accept purchase offers below their listing prices.

If you plan to take advantage of the bargain prices of foreclosed homes in Tarrant County, do your own research and learn about home inspection and repair costing. David O’Brien Jr., head of home counseling nonprofit Housing Opportunities in Fort Worth, said the phrase buyer beware is a fitting advice to prospective buyers of foreclosed homes.

The case of Tom Viola, founder of Abode Property Inspections, is a good illustration for lessons in buying foreclosed homes. Viola bought one unit among foreclosed homes in Hurst in 2008. The house was offered by the bank at $241,000, but was sold to Viola at his offer of $225,000. The bank also paid for the closing costs.

Being a home inspector, Viola expected that he was going to spend some more for repairs on the foreclosed house before it becomes saleable. He advises buyers of bargain foreclosed homes to expect a lot of damages, a lot of defective equipment and appliances and vandalized parts of the homes.

Viola said most foreclosed homes offered for sale are less than ten years old, but many of these units have air conditioners that have been ripped and walls that have lots of holes. Also, most foreclosed homes have been unoccupied for many months, causing deterioration.

Viola advises prospective buyers to hire professional home inspectors. Home inspection does not cost much, in comparison to the benefits gained by the buyer. It varies from only $200 to a high of $500.

Viola recommends home inspectors who work full-time in home inspection, who are licensed by the state and who is a member of either the National Association of Home Inspectors or the American Society of Home Inspectors.

In addition, O’Brien advises potential buyers of foreclosed homes to attend home buyer education sessions offered by Housing Opportunities under Neighborhood Stabilization Program in Fort Worth. The city’s home buying initiative provides down payment aid to eligible first-time home buyers who plan to buy foreclosed homes in certain areas of the city.

Inspect Foreclosed Homes Before Buying is a post from: Foreclosure Homes Investing

In King County, Washington, 37-year-old Rock Harrison was one of almost 40 people who gathered just outside a strip mall in the area for a public auction of homes included in the county’s foreclosure listings. Harrison is new to auctions but had himself pre-qualified for the auction of a McMansion house in Auburn, which was priced at $470,450 in 2004 and was being auctioned at a starting price of $267,000. Several newcomers have participated because they saw that the house was vacant and satisfactorily maintained. The bidding quickly jumped to $320,000 at which point Harrison dropped out. The property was sold at the final price of $371,000, still much below its 2004 price.

Rick Sharga, a top executive of foreclosure tracking firm RealtyTrac, said the demographics of residential foreclosure listings and auctions have been changing. Foreclosure listings have been in the housing market ever since, but nowhere near the level of foreclosure listings nowadays which have instigated about 60 percent of homebuyers to look for foreclosure properties when looking for a house to buy.

RealtyTrac has predicted that up to three million homes will be included in foreclosure listings by the end of 2009 if no intervention is implemented on a national level. The tracking firm monitors pre foreclosure sales or short sales, trustee’s sales or public auctions by counties and sales of real-estate owned properties.

Sharga also said that the sale of repo homes to third parties has declined, increasing the proportion of foreclosure properties being acquired back by mortgage banks. In California, only 3.6 percent of nearly 250,000 properties in foreclosure listings were sold at trustee auction sales to third parties.

New York City investor Duane Harden is advising auction newcomers to do research on foreclosure listings before the properties are auctioned. They should also know state rules on foreclosure auctions. In New York, the winning bidder must immediately pay ten percent of the bid and complete the payment within 30 or 45 days. In Washington State, the bidder must pay immediately the full winning price with a cashier’s check or cash.

Sharga and other foreclosure auction specialists are advising newcomers to study foreclosures and the real estate auction process before actively participating in foreclosure auctions. They said that although many have earned profits from foreclosure auctions, there are a lot more who have lost their money in bidding for properties that turned out to be lemons.

More Newcomers to Auctions of Homes in Foreclosure Listings is a post from: Foreclosure Homes Investing

Banks, mortgage lenders or any individual for that matter could find out who holds the mortgage on the repossessed home, who owns the property, liens on the home and the homeowners associations’ (HOA) rules and regulations covering the property.

Any pertinent information about the foreclosed property can be learned from public records. However, despite the availability of public records on a certain property at the Clerk and Recorder’s Office, majority of the people who are interested to learn about the property failed to do so because of lack of time.

An alternative is to hire title companies. Title companies can do the checking of records for you. Usually, a title company has its own computer system that is designed to gather and provide information about a particular foreclosed property.

A title company has a foreclosure department tasked to check public records on foreclosed homes upon request of banks or lenders.

Foreclosure does not only affect homeowners but also lenders, may they be first or second. Just like homeowners who will lose their properties, lenders are also entitled to receive a notice of foreclosure.

Now, why should a notice be sent to the lender who holds a second mortgage loan on the property? For example, you applied for a loan to purchase your home in 2004. In 2006, you decided to get a second mortgage loan on your property because you needed money. The first lender does not know that you applied and received a second loan.

When the first mortgage lender takes back the property, the second mortgage lender will immediately lose his trust deed on your debt.

That is why most lenders hire title companies to know all information on the public record after their deed of trust was recorded.

What Homeowners Should Know About Foreclosure and Title Companies is a post from: Foreclosure Homes Investing

Since 2004, Donovan has led New York City’s affordable housing program. The city is known for its high-priced real estate distressed properties.

As city housing commissioner, Donovan has been responsible in implementing Mayor Michael Bloomberg’s plan to develop nearly 165,000 affordable housing units for city residents who cannot afford to pay rents and mortgages and are in some stage of foreclosure.

The issue of affordable housing has tormented city officials. The city’s home ownership rate was 33 percent lower than the 67 percent nationwide, making it the US city with the lowest homeownership rate.

Even after the increased in the number of distressed properties, a single-bedroom apartment in the city can be rented for as high as $3,000 monthly or sell for about $1 million or higher.

Supporters of Donavan cited that out of nearly 17,000 homeowners who have availed of the city’s affordable housing program, only 5 have faced foreclosures.

Executive director of the city chapter of Habitat for Humanities, Josh Lockwood said that Donovan has prioritized homeownership by providing financial literacy education and home ownership education to low-income buyers.

Donovan is credited for finding innovative ways to fund the city’s affordable housing program, such as using philanthropic and public funds to supplement private money and coordinating with non-profit group and developers to build houses for different income levels.

Enterprise Community Partners Chief Executive Officer Dooris Koo credited Donovan for reducing the effect of the increasing number of foreclosed homes by counseling, securing funding for loan modifications and identifying neighborhoods in the city with high rate of homeownership.

Donovan, who holds masters degrees in architecture and public administration, filed a leave as housing commissioner of New York City to campaign for President-elect Obama. To return the favor, Obama nominated him as HUD secretary.

HUD Nominee Donovan Expected to Lead the Obama Administration’s Foreclosure Prevention Campaign is a post from: Foreclosure Homes Investing

You do not have to deal with them to keep your home. Many government agencies and nonprofit organizations have launched services designed to help you avoid foreclosure for free. You do not even have to leave your house at first. You just visit the web sites of the following organizations to help you decide what to do. And then make the calls.

The first recommended web site is the federal Department of Housing and Urban Development’s site www.hud.gov. The site offers lots of information about foreclosure and programs aimed at helping homeowners like you. It has sections such as Guide to Avoiding Foreclosure, At Your Service, Important Links and HUD news. You can find links to local offices, free housing counselors employed by HUD and other helpful sites.

At the HUD site, you can also read details about the HOPE for Homeowners Program and resources offered by EconomicRecovery.gov program. The site offers contact numbers and has a Spanish language version.

The second site you need to visit is www.naca.com, the web site of the Neighborhood Assistance Corporation of America (NACA). It is a nonprofit community organization and counseling agency certified by HUD. It has been recognized across the U.S. for reducing loan rates to enable distressed homeowners to make their monthly payments. Best of all, NACA’s services are free.

There is one more you need to see: the web site of Hope Now, a nonprofit 501(c)(3) Christian association which was formed by loan servicers, investors, counseling agents and other mortgage professionals that provide foreclosure assistance for free. The site has a free hotline.

The foreclosure crisis has brought about the rise of unscrupulous people taking advantage of homeowners at the most vulnerable time of their lives. So be careful.

Foreclosure Advice Is Free. Why Pay? is a post from: Foreclosure Homes Investing

Colander says that the best strategy would be a scheme that would achieve the goals of all stakeholders in the housing market. The scheme should help homeowners save their homes, should help mortgage lenders save their investments, should help communities maintain healthy social structures and should contribute significantly to the stabilization of the housing market.

Colander’s scheme is named Trickle-Up Plan. It aims to help homeowners distressed by foreclosures, help mortgage banks reduce their foreclosure inventories and stimulate buying in the housing market.

The key element in Colander’s plan is the use of foreclosure vouchers. The government would allot foreclosure vouchers to taxpayers according to income levels, with the lowest earners receiving the biggest voucher amounts and with people in certain high income levels excluded from the scheme.

The vouchers are foreclosure vouchers and therefore can only be used in two ways: to buy foreclosed properties or to pay mortgage loans to save homes from foreclosure.

For recipients who cannot use the vouchers because they are not facing foreclosures or are not interested in buying distressed properties, they can sell their vouchers on the secondary market at a discount. The discounted vouchers would attract investors to the foreclosed housing market, creating housing demand, restoring home prices and ultimately contributing to the nation’s economic recovery.

Colander asserted that his Trickle-Up Plan relies on a strategy that helps the common man first so that big business can be helped eventually rather than on a strategy that helps big business first so that the common man can eventually be helped.

Middlebury Economist’s Scheme for Foreclosure Prevention is a post from: Foreclosure Homes Investing

Unveiling of the Proposed Plan

The plan, which was announced on Tuesday, stated that Fannie Mae and Freddie Mac will alter the terms of their overdue mortgages. The alteration will require borrowers to use 38% of their income for mortgage payments. The government believes that such a program will help US citizens avoid foreclosures.

Under the proposed plan, the alteration will also involve extending mortgage maturities to a maximum of 40 years. Offering of lower interest rates and cancelling principal payments are also being considered.

In a statement, Federal Housing Finance Agency Director James Lockhart said that foreclosures have gravely affected a lot of families. He also said that the increasing number of foreclosure homes has also put its mark on the housing market. FHFA believes that it is time for the government to put a stop to the problem.

Details of the Proposed Mortgage Modifications

The initial plans have delineated the borrowers who can benefit from the assistance. Borrowers who live on the mortgaged properties and have a loan value of at least 90% will be made eligible for the alteration of terms.

Borrowers who are nearing foreclosures must contact their lenders or servicer to check if they qualify for the alteration. They must also be willing to rework their mortgages.

Under the said program, the qualified borrowers will be tasked to solely shoulder the principal amount they have borrowed. They will also be provided with the option to defer part of the payment for the principal amount.

To encourage the participation of mortgage services, the government proposes to pay them a fee of $800 for modified mortgages.

Government Announced Plans to Quell Foreclosures is a post from: Foreclosure Homes Investing

NFDM is a non-profit agency approved by the US Department of Housing and Urban Development. It provides really helpful solutions for homeowners for the tools and expertise of their foreclosure prevention counselors on staff can be trusted. It even provides solutions for homeowners who do not want Short Sales.

With its highly trained foreclosure prevention counselors, NFDM has come up with several resolution options to modify loan terms:

• Loan Modification: Yes, you can pay your loan, but do not have the cash to make your mortgage account current? Your lender could actually offer to change some of the mortgage terms in your original housing loan to allow you to pay your mortgage dues more easily.
• Partial Claim: Got insurance for your mortgage? This may qualify you for an interest-free loan that would bring your account current. This delays for several years the repayment of your loan.
• Reinstatement: Don’t worry. Your lender could always discuss with you about the acceptance of the settlement of your total owed amount by a certain date. More often, this is combined with the Special Forbearance option.
• Special Forbearance: Got a hiring bonus, an investment, an insurance settlement, or even a tax refund? If money that will bring your account current will come to you in the future, then this option can work well with your Reinstatement option. Your lender may agree in the reduction and suspension of your payments for a short period of time.
• Repayment Plan: You may get back to your usual monthly payments, with that portion of your previous due payments every month while you get all fixed up.

The NWFA-NFDM Team-Up is a post from: Foreclosure Homes Investing

Usually, a foreclosure process will involve the following steps:

1. Missed Payment – expect your lender or a collection agency to call after 15 days. In addition to your monthly mortgage due, you will now have to pay a penalty fee. After 30 days, the collection letters will come and the calls will continue unless you speak with your lender.
2. Default – after 60 days, you will be notified via a letter that your mortgage loan is in default. You will be asked to pay the outstanding amount due in order to update your account. Most likely, you will be charged with late fees.
3. Foreclosure filing – if you were not able to update your account by paying three months or 90 days worth of mortgage payments, a foreclosure lawyer will contact you and you will be informed of the foreclosure filing. After the filing, you will have 20 days to provide a response. During this time, you may receive offers from foreclosure rescue companies or even foreclosure counselors. If you need help, you may avail of such services. Just make sure that you deal with a reliable and reputable company.
4. Summary Judgment Hearing – one or two months after the foreclosure filing, you will receive a notice for the court hearing date.
5. Auction– 45 days after the court hearing, your home will be auctioned off by the local county sheriff.
6. Eviction – one or two days after your home was sold in a foreclosure auction, you will have to leave your home.

Bear in mind that you will be able to stop foreclosure anytime until the very last step. For this reason, you should make sure that you explore all options available.

Foreclosure Process Timeline is a post from: Foreclosure Homes Investing