Foreclosure Epidemic Reaching More Expensive Homes

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Een bank heeft de keuze tussen $200.000 verliezen of $140.000 en kiest
voor de dure optie.

Waarom? Omdat ze de lening hebben doorverkocht, in een complexe
samengestelde vorm. Als ze de lening aanpassen, moeten ze alle eigenaren
van de delen van de lening om goedkeuring vragen.
Dat zien ze kennelijk niet zitten. Het is echter ook heel goed mogelijk
dat ze gewoonweg niet weten wie de eigenaren zijn.

Dan blijf ik echter zitten met de vraag, wat ze doen met de maandelijkse
aflossingen die ze wél ontvangen. Hoe kunnen ze die betaling dan
doorsluizen naar de eigenaren van de lening?

Groet / Cees

http://www.usnews.com/money/blogs/the-home-front/2009/10/16/foreclosure-epidemic-reaching-more-expensive-homes.html

Bank of America - Reduce Mortgage Principals

Our home value has declined from $390,000 to around $250,000 or less,
since we purchased it from Country Wide Mortgage three years ago. They
offered us a “no money down”, “interest only for ten years” mortgage. We
found that hard to pass up.

We stopped making our mortgage payment in February 09. BA has offered to
refinance the loan, but not reduce the principal. We have rejected that
offer. Our agreement offers us the option of foreclosure, which fully
releases us from the loan. That’s the deal BA/Country Wide made and we
fully intend to take that option. We are not paying $390,000 for a
$250,000, house.

For BA that is a $140,000 loss, plus lost interest, foreclosure costs,
real estate listing fees, house repair, etc. That is pushing a $200,000+
loss. We can easily qualify for a $250,000 loan and we would prefer to
stay in the house if BA would reduce the principal to the current value.
However, they apparently prefer to take the additional $60,000+ loss. Is
this a wise move for BA stockholders? I think not.


Foreclosure Epidemic Reaching More Expensive Homes
By Luke Mullins

Posted: October 16, 2009

A recent report by a congressional oversight panel highlighted the
changing nature of the housing crisis by suggesting that the Obama
administration's sweeping anti-foreclosure initiative might not be suited
to address the mortgage delinquency epidemic as it exists today. The
initial portion of the foreclosure mess was triggered in large part by
over-leveraged borrowers who got in over their heads with resetting
mortgage products and homes they couldn't really afford. But today, as the
unemployment rate heads for 10 percent, a growing number of borrowers with
good credit are heading into foreclosure after losing their jobs. However,
the Obama administration's housing rescue "was not designed to address
foreclosures caused by unemployment, which now appears to be a central
cause of nonpayment," the panel said in the October 9 report. "The
foreclosure crisis has moved beyond subprime mortgages and into the prime
mortgage market. It increasingly appears that [the Obama administration's
housing rescue] is targeted at the housing crisis as it existed six months
ago, rather than as it exists right now."

[Check out Obama's Loan Modification Plan: 7 Things You Need to Know]

Last week, real estate company Zillow released some figures that further
demonstrate the troubling evolution of the housing crisis, as an
increasing number of upper-tier homes are now heading into foreclosure. At
the peak of the real estate market back in 2006, homes in the top third of
the property value spectrum made up just 16 percent of foreclosures
nationwide, Zillow says. But by July of this year, this most expensive
segment of the market accounted for 30 percent of home foreclosures. "That
means that top-tier homes make up almost twice the proportion of
foreclosures as they did just three years ago," Zillow Chief Economist
Stan Humphries said in a statement accompanying the data.

[See Why Obama's Housing Rescue Hasn't Prevented Record Foreclosures]

Meanwhile, home foreclosures at the lower end of the market are trending
in just the opposite direction. Properties in the bottom third of the home
value spectrum represented 55 percent of all foreclosures in 2006, but
just 35 percent in July. Humphries believes the trend reflects a
significant change in the types of mortgages that are going bad these
days. "High delinquency rates in Prime, Alt-A and Option ARM mortgage
products and declining cure rates (the rate at which borrowers resolve
their delinquency status) are resulting in many more foreclosures among
borrowers outside of the sub-prime mortgage market (and in higher priced
segments of the market)," he said.

While subprime borrowers are still a factor in the current foreclosure
epidemic, it's becoming increasingly apparent that the labor market is the
driving force behind the mortgage crisis we face today. Mounting job
losses are turning once-well qualified buyers of high-priced homes into
foreclosure victims.

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