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Posts Tagged ‘Housing Crisis’

Massive Effort by J.P. Morgan to Save Mortgages

J.P. Morgan Chase & Co. launched an ambitious plan Friday to modify the terms of $70 billion in mortgages for borrowers who are behind on their payments or soon could be.

The move by the New York bank will cover as many as 400,000 borrowers. They’ll be moved into loans carrying lower interest rates, smaller principal amounts and other more-affordable terms.

Only Half a Bailout

A week into the big bailout, banks are beginning to charge each other less for loans and companies are finding it easier to borrow short term. The Dow has been up and down, but so far this week, it is back above 9,000.

So has the worst passed? Probably not.

The unfortunate reality is that as long as millions of Americans continue to default on their mortgages and housing prices continue to slide, banks will continue to suffer big losses. Unless something is done quickly to help American homeowners avoid foreclosure and stay in their homes, those losses could swamp the bailout effort by exceeding the sums being spent to rescue the banks.

Despite the danger posed by foreclosures — to the bailout, homeowners, taxpayers and the economy — the Bush administration and Congress are still depending on banks and other participants in the mortgage industry to voluntarily modify troubled loans, say, by giving borrowers more time to pay or by reducing interest rates.

Mandatory modifications, bankruptcy, lawsuits — no one likes them, but they are tough tools for a tough problem. The bailout has dealt with only half of the problem: the credit freeze. Unless the government deals as aggressively with foreclosures, the system will likely face the abyss again.

90 Year Old Ohio Woman Attempts Suicide as Sheriffs Attempt to Evict Her

CINCINNATI (Reuters) – A 90-year-old Ohio woman, facing eviction from the home she has lived in for 38 years, shot and wounded herself this week, becoming a grim symbol of the U.S. home mortgage crisis.

Addie Polk was found lying on the floor of her home with what appeared to be a self-inflicted gunshot wound to her shoulder when police came to the home on Wednesday to serve an eviction notice, Akron police spokesman Lt. Rick Edwards said on Friday.

Home foreclosure rates are at record highs in the United States, in many cases because buyers with adjustable interest rates could not keep up with sharp increases in monthly payments. The foreclosure crisis has sparked a wider housing market downturn and is at the heart of the U.S. financial crisis.

Mortgage Giants Fannie Mae and Freddie Mac to be Placed Under Federal Control

The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives, and use government funds to prop them up, government officials told the two companies yesterday, according to sources familiar with the conversations.

This is an ominous sign of the fragile state of the U.S. Mortgage Industry and housing markets. Many Americans are simply walking away from their homes after being unable to sell or refinance due to the current credit crunch and falling home values.

Many homeowners with adjustable rate mortgages are simply choosing to walk away and start over. It doesn’t seem to make much sense to try and save a depreciating asset while monthly payments and interest rates rise to unreasonable levels.

Housing Prices Are Falling With No End in Sight

Does it Make Financial Sense to Try and Save Your Home?

These days many homeowners are justifiably very nervous about their homes.

Mortgage pillars Fannie Mae and Freddie Mac are on the verge of financial meltdown and Federal Bailout.

Transportation, energy, food costs, and unemployment are rising.

More people out of work is going to put even more pressure on people being able to pay their mortgages. That will lead to lead to more foreclosures, and More People Walking Away From Their Homes!

Many experts believe housing prices are not even close to reaching their bottom, including Alan Greenspan Former Federal Reserve Chairman.

While it is a gut wrenching decision, sometimes the best thing to do is walk away and start over.

Mortgage Giants Stocks Plunge on News of Federal Bailout

NEW YORK (CNNMoney.com) — Shares of mortgage finance giants Fannie Mae and Freddie Mac, suffering their worst day since a mid-July free fall, plunged Monday to their lowest points in nearly two decades.

Foreclosures Increase 55% and Home Values Continue Fall

12.7% of U.S. Homeowners Will Be Forced Out of Their Homes!

Aug. 14 (Bloomberg) — Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent as falling prices made it harder to sell or refinance.

“It’s getting worse,” Rick Sharga, RealtyTrac’s executive vice president for marketing, said in an interview. “The number of properties that have been foreclosed on by the banks and still haven’t sold is the highest we’ve ever seen.”

California led with the most total filings, followed by Florida, Ohio, Arizona, Michigan, Texas, Georgia, Nevada, Illinois and New York.

U.S. home prices fell 15.8 percent in May, the most since at least 2001, according to the S&P/Case-Shiller home-price index. One-third of home sellers in the second quarter lost money, Zillow.com, a Seattle-based provider of home valuations, reported this week.

Foreclosures could put 8.4 percent of total U.S. homeowners, or 12.7 percent of homeowners with mortgages, out of their homes, according to New York-based analysts at Credit Suisse. About 53 percent of subprime borrowers, those with poor or incomplete credit histories, will have negative equity in their homes this year, and that percentage will rise to 63 percent next year, the analysts said in an April 23 report.