The foreclosure rescue bill is poised to take off. By it both borrowers facing foreclosures and banks riddled with foreclosure related losses would benefit. Both the parties are supporting the bill for the general welfare. If all goes well than the bill will sail through the Senate on Friday 25th July. There are bumps ahead with some alterations required. The White House has been threatening to veto if certain major changes are not rewritten. But it seems that the preliminary hurdles have been crossed and the package is running on the proper tracks. The Senate has broadly supported it. This shows the general interest of the lawmakers belonging to both parties. Uppermost on their minds has been the welfare of the foreclosure victims. It must not be overlooked however that this is the election year and the economic weather right across the country is grim.

The main point of the bill will allow the Federal Housing Administration to support up to $300 billion of new loans that will be made to borrowers at risk from foreclosures. The new loans will have easier more affordable terms. The rate will be fixed for longer period. The lenders on their part will have to waive large chunks of the principal and thus avoid costly foreclosures.

Barney Frank (Democrat) chairperson of Financial Services Committee is one of the main architects of the bills. He commented that a number of leaders of the House are seeking some important revisions. These differences will be ironed out within the week. The week will be one of intense parleying at Capitol Hill against the background of Bush agreeing to sign the bill or not.

The FHA will be modernized and given a shake up. This has been a long-standing demand. A new regulator will be set up and there will be more strict control on Fannie Mae and Freddie Mac. The latter two are government-sponsored giants. The bill will also sanction $14.5 billion in relief from housing taxes. New buyers who would be purchasing properties for the first time will be getting a credit for $8,000.

The Democrats in the Congress are disunited over some important points of the package relating to limits on loans to be supported by FHA, amongst other things. Difference of opinion surrounds Freddie Mac and Fannie Mae also. The Senate wants to limit them to $625,000 but some, including the Speaker Nancy Pelosi want to cap it at $730,000.
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Sub-primes are no longer the main reasons for foreclosures. Today the main culprit is the rapid decline in real estate prices.

The foreclosure epidemic of North County is rapidly spreading not because of sub-prime so much as because of many other factors that have led to a fall in the real estate market.

Oceanside and east Escondido were two of the worst affected regions. During the past three months the numbers have gone down. But foreclosures have marched into the adjacent areas of San Marcos and Carlsbad where the numbers are growing. Experts say that today the problem is not so much the risk factor as the decline in property prices that is triggering off foreclosures. It has become a vicious circle – price decline is leading to more foreclosures and more foreclosures are leading to further price decline. Sean O’Toole of ForeclosureRadar that tracks foreclosures commented’ “It’s like a toilet bowl effect.”

According to the findings of a study conducted by the Boston Federal Reserve, house owners who lost over 20% of the value of their houses are 14 times more susceptible to be cursed by foreclosure, than a typical borrower. In sharp contract sub-prime borrowers are six times more likely to succumb to foreclosures than prime borrowers.

According to ForeclosureRadar north Oceanside saw a drop in foreclosures during the last three months, but San Marcos foreclosures increased by 28% during the same three months. The problem is also growing in Vista and Carlsbad affecting the higher priced houses.

Ward Hanigan of Innovest, an investment firm of San Diego opines that this trend will continue till 2010. His company is biding its time for the foreclosure weather to change. The signal will be when banks will be selling properties in a wholesale manner with two or three being sold at one go. As yet that liquidation mind set has not begun, he commented.

New default numbers are declining. The default notice is the first step in the judicial process of foreclosure. In North County foreclosure proceedings have been finalized on 30% of the foreclosed units. Bank owned properties make up above 40% of the foreclosed units. It indicates that sub-prime lenders have been successfully been able to work out many loans satisfactorily without going into foreclosure. Another pointer to the domination of price being the main factor in foreclosures is the negative equity of the properties in question.

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The Federal Bank of Boston and The New England Patriots Charitable Foundation will be hosting a foreclosure prevention workshop at Gillette Stadium. No fees will be charged. It will be held on Tuesday 12th August. Starting from 1 pm it will continue till 8 pm. The workshop will be a great opportunity for foreclosure victims to directly meet their lenders to avoid foreclosure evictions.

The chairperson and CEO of The Kraft Group, Robert Kraft said that many events are hosted in Gillette Stadium but this one is “especially meaningful.” The foreclosure situation in New England is grim.There is hope that this event will help the issues to be resolved. The Kraft Group expressed its satisfaction at being able to “provide Gillette Stadium as the venue.”

It is an acknowledged fact that solving the foreclosure problem is not easy either for borrowers or for lenders said the president and CEO of the Federal Bank of Boston, Eric Rosengren. Gillette Stadium with its welcoming atmosphere and international standard facilities is the ideal place for holding such a crucial workshop. It will create the right ambience for talks of such weight. He was optimistic that this happening “held in this setting, can make a difference.”

Behind the workshop is the support of New England’s elected officials. Some of them are Governor Deval Patrick, Mayor Thomas M. Menino and U.S. Rep. Barney Frank amongst others. Governor Patrick commented that this was a great opportunity for lenders and borrowers to meet in a mood of faith and trust to work hard at finding a solution forthe raging foreclosure problem.

Mayor Menino added that in Boston they were continuing to make efforts to give as much real assistance as feasible to those who were at risk from foreclosures. Simultaneously they were working for recovering the health of the localities that had been blighted by empty foreclosed houses.

The borrowers were asked to be prepared and bring all their documents as regards income, expenses and loans together with mortgage papers to the workshop for the talks. These would come of use while discussing with a housing and or credit counselor. A special number has been set up for the convenience of the participants. Borrowers could call and leave behind their particulars like name and address as well as any relevant question after giving a callback number. They could expect a return call within 24 hours.

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Reports coming in from Ohio show that the tenants are the silent victims of the foreclosure crisis. Their voices remain unheard. The income of the ordinary people is also going down because of the foreclosure tornado.

With more and more people being evicted from their houses the demand for rented accommodation has gone up. A recent survey shows that tenants now occupy 30% of all the residential properties. Another reading shows that the income of Ohioans is going down. Tenants have few legal rights and are at the mercy of unscrupulous landlords as well as scammers.

In Cuyahoga County foreclosure filings are rising according to the findings of Policy Matters Ohio. The study is mainly concentrated in Cuyahoga County. It is a non-profit body without any party affiliations delving in economic research. Residential foreclosures increased by 8% from 2007. The number of foreclosed houses occupied by tenants also increased but at a higher rate than the previous category. Renters occupied 30% of the residential properties that were posted in 2007.

Tenants comprise of over a third of the population of Cuyahoga County. They suffer the same trauma as the owners occupying houses but with less focus and fewer avenues of redress or escape. They are not considered to be part of the foreclosure process.

Most of the families are hardly given any decent time before being asked to vacate. To shift suddenly they have to incur significant expenses. It dramatically changes their lifestyle. They usually lose their security deposits and have to pay higher rents for the next shelter and suffer the attendant costs of shifting and storage. For the average family it calculates to $2,500. A rough estimate is that tenants have suffered in all, losses amounting to $10 million.

Over 35% of the foreclosure postings of Cleveland counting to 2,586 and East Cleveland counting to 175 are related to rented houses. Most of the houses in the inner-ring suburbs suffered considerable rise in tenanted foreclosure listings. Report from Cleveland Housing Court show that number of houses being foreclosed having tenants have doubled.

The report suggests enacting of laws for the protection of renters at the state and federal level. Proper and timely notice should be made compulsory. Loans (with no or negligible interest) should be made available for renters to be able to shift and set up home again. The banks should focus on incentives rather than evictions.

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Statistical evidence shows that over half of all Black borrowers who refinance in 2006 were made to swallow sub-prime mortgages. Latino borrowers faced a similar situation. Together they will suffer a loss ranging from $164 billion to $213 billion in the surging tide of foreclosures that have been wrecking havoc since that time.

Each family has a tragic tale to tell – individual and personal that is far more damaging than figures and numbers. The agony cannot be gauged by statistics alone.
A staggering number of people were sold sub-prime loans.

One woman whose literacy level did not permit her to understand the nitty-gritty of mortgage ins and outs. An agent sold her a string of refinancing loans that summed up to more than $100,000. Now the house she bought in the 70’s is going to be lost.

The unethical brokers sniffed out people who for generations never had the chance to build up a good credit record. They were told that a godsend chance had come for them to turn their equity to advantage. Some people are skeptical about the high talk of banks and lenders. But many others tended to trust them and the image they represent. They believed that the lending institutions have the best interests of the borrowers uppermost in their minds. It is this trust betrayed of the Hispanic and Afro-American neighbourhoods that the lenders betrayed.

Many who rose to the bait are now in the foreclosure net. They continue to have a guilty feeling of having done something wrong. This negative bent of mind is very important to the lender community because it prevents the victims from retaliating.
The foreclosure victims are traumatized into inaction.

To Afro-Americans the equity on the house is a very important thing – it is part of real wealth. There is no denying that a huge wealth gap exists between the black and while Americans. The lenders steered the minorities into high-risk loans in a very subtle way with the Judases among the Blacks who captured their prey in Black churches and meets.

Although the Afro-Americans and Hispanics will absorb about half the economic loss due to foreclosures they are definitely not half of all those who borrowed. The Black borrowers ranging from all economic levels were two to three times more likely to be saddled with sub-prime loans than the Whites.

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