Brooklyn was clobbered by foreclosures in 2008, with more than 5,000 of its housing units becoming foreclosure homes and about the same number of families evicted from their abodes.

Now, the number of foreclosures homes is expected to increase as the joblessness rate in the area has surpassed the 9 percent level. What exacerbates the problem is that many troubled homeowners are too afraid or too embarrassed to ask around for help.

To help distressed families and reduce foreclosures in Brooklyn, Congressman Edolphus Towns organized a foreclosure prevention session at Pratt Institute.

Towns focused first on the two Brooklyn neighborhoods with large numbers of foreclosures homes – Bedford-Stuyvesant and Fort Greene. Both of these neighborhoods are in the tenth congressional district represented by Towns.

Towns, chairperson of the New York House Committee on Oversight and Government Reform, said that the government needs to reach out to troubled homeowners and guide them to the right resources so they can avoid foreclosure.

If distressed homeowners are allowed to be taken advantage of by fake foreclosure prevention enterprises, their homes will ultimately become foreclosures homes, devastating families and neighborhoods.

Charles Hynes, district attorney of New York city, also spoke to homeowners at the session. He told participants that his newly created Mortgage Fraud Unit will take calls from homeowners who want to check if their paid foreclosure prevention counselors are legitimate or if they have been victimized by bogus loan consultants.

Hynes reiterated that fraudulent foreclosure counselors prey on homeowners who have low credit scores and weak employment histories. He added that these predatory individuals make promises that they can save houses from becoming foreclosures homes for a fee.

According to Hynes, the most commonly used tricks are lease buybacks, home equity stripping and sale of freely available information.

Rhonda Lewis, president of the Bridge Street Development Corporation, also added that Brooklyn is among the areas in New York with the biggest number of foreclosures homes. She said her organization is working to reduce the area’s foreclosure rate.

Among the participants in the workshop were JPMorgan Chase, the Pratt Community Council, Chicago Partners, Brooklyn Legal Services Corporation and Brooklyn Bar Association Volunteer Lawyers Project. At the workshop, speakers also explained the steps of loan modification and HUD-accredited counselors and mortgage loan specialists advised homeowners.

Homeowners determined to save their homes from becoming foreclosures homes are advised to call the office of Congressman Town and the offices of the Bridge Street Development and Pratt Area Community Council.

Foster children in Watsonville benefited from the wave of forclosures homes when the nonprofit Court Appointed Special Advocates (CASA), which has been helping them, was able to afford the price of one of the forclosures homes in the area.

Due to the dropping prices of forclosures homes, CASA was able to buy a foreclosed property measuring 3,500 square feet along Freedom Boulevard across Callahan Park.

The large foreclosure home would become a large shelter for the foster children who have been cramped in an office space of a former hospital building.

Nancy Sherrod, executive director of CASA, said the large home would accommodate around 180 foster children served by the nonprofit every year. CASA has been wishing for a larger space for the children for many years. The volunteers helping the children would surely be excited by the prospect of a brighter future for foster children in the area.

CASA’s dream of a large space was fulfilled ironically by the foreclosure crisis. The large number of forclosures homes has pushed down prices to affordable levels. As foster children increased in number during the economic downturn, the prices of forclosures homes also decreased.

When Sherrod saw the property in 2007, it was being sold at $829,000. She also thought the seller would not accept a discounted offer because the property is near the courthouse.

But as the number of forclosures homes increased and the prices of foreclosures decreased, Sherrod felt she can request for a discount. She began campaigning to raise a $1.15 million budget and offered to the seller a purchase price of $585,000.

The owner rejected Sherrod’s offer, but Sherrod sustained CASA’s fundraising campaign. As the fund drive was pursued, major benefactors came on board, including the Borina Foundation, which provided $250,000, and Mary Solari, who donated $300,000.

CASA’s board members, staff members and other supporters also made pledges to help. CASA vice president Leola Lapides, a retired lawyer, said she is proud to belong to a community which is concerned about the welfare of children and does something concrete for them.

When CASA finally won the house in an auction with a $395,000 bid, every CASA supporter felt joy. Considering rezoning costs and back taxes, the total cost of acquiring the property would be about $430,000, which is still a bargain price compared to the original price of $829,000.

In a twist of fate and American sense of community and charity, the foster children got their dream from forclosures homes.

According to California-based RealtyTrac, the number of high-end houses nationwide valued at over $729,750 and hit with foreclosure filings in this year’s first 10-week period increased by 127 percent, compared to the same period in 2008. The amount of $729,750 is the lower limit of what are called jumbo loans in many affluent areas.

For homes appraised at $417,000 or lower, the increase in foreclosure filings was 72 percent. For all types of homes, the increase in foreclosures was 78 percent.

In addition, the share of houses valued at over $729,750 which are in foreclosure in this year’s first 10 weeks climbed to 2.83 percent, an increase from the 2.21-percent share in last year’s first ten weeks. The share of houses in foreclosure appraised at $417,000 or lower declined to 87 percent, compared to 89.7 percent level in last year’s first 10-week period.

David Adamo, CEO of Connecticut-based Luxury Mortgage Corp., said that owners of high-end homes, just like owners of smaller homes, planned to refinance to sustain payments and then sell later at a profit. Their plans however collapsed when the flood of foreclosed homes began and the market for high-end houses slumped.

Jumbo mortgage loans were not guaranteed by Freddie Mac and Fannie Mae because company policies limited them to only houses appraised $417,000 and below. The number of jumbo loans declined to 4 percent of all mortgage loans in last year’s fourth quarter.

According to a report from Bloomberg, defaults on subprime loans and the number of lower-priced foreclosed homes started to rise in 2007, reaching to high levels that caused nearly $1.4 trillion in write-downs and losses by mortgage securities packagers and lenders.

Tennessee-based FTN Financial said nearly $500 billion jumbo mortgages have been packaged as bonds. Losses on these jumbo mortgages have increased to 10 percent due to increasing defaults and jumbo-priced foreclosed homes, according to JPMorgan analysts.

The measure is expected to be an integral part of the Homeowner Affordability and Stability Plan of President Barack Obama.

The Bishop-supported bill will focus on providing ways to address foreclosure homes problem and boost the availability of mortgage credit by allowing bankruptcy judges to modify loans for distressed homeowners who filed for bankruptcy protection.

The measure is expected to boost mortgage refinancing to stop foreclosure homes increase by giving flexibility on loan modifications, reducing fees and providing incentives to mortgage lenders who choose to refinance instead of adding to the growing list of foreclosure homes.

According to the Mortgage Bankers Association’s (MBA) National Delinquency Report, mortgage delinquencies and filings for foreclosure homes posted an 11 percent increase during the fourth quarter of 2008.

The number of mortgage loans at least one month behind in payments but not yet in the foreclosure process jumped by 8 percent, representing a 13 percent increase from the previous quarter.

The MBA data also showed that the number of foreclosure homes increased by 3.3 percent during the fourth quarter of 2008, representing a 1.26 percent jump from the previous year.

Meanwhile, data from Bishop’s office showed that housing prices declined 18 percent during the fourth quarter of 2008 and over 14 million troubled homeowners owe more mortgages than the fair market value of their distressed properties.

Bishop said that stabilizing and strengthening the housing industry is crucial to the recovery of the U.S. economy. He pointed out that homes in foreclosure reduced the value of neighboring properties by almost 9 percent and every American will suffer if house prices will continue its rapid decline.

He added that the bill does not require spending federal money to be able to help thousands of distressed homeowners who are facing the threat of losing their homes to foreclosure.

The Homeowner Affordability and Stability Plan includes measures to reduce mortgage payments for an estimated 9 million struggling homeowners and expand the role of Federal Home Loan Mortgage Corp. and Federal National Mortgage Association in stopping foreclosures.

President Obama’s foreclosure plan, which was set at $75 billion, will be funded with $20 billion from Freddie Mac and Fannie Mae in order to conserve the $350 billion given to the Obama administration for financial bailout in January. This $350 billion was part of the $700 billion Troubled Asset Relief Program (TARP) approved by Congress during George Bush’s administration. Obama and his advisers plan to use only $50 billion of the $350 billion to reduce foreclosure homes. They are setting aside the rest of the money for other programs to rehabilitate the economy, such as increase in bank capitalization, creation of an investment fund to acquire foreclosure homes and other bad assets from banks and stimulation of business and consumer lending.

The two mortgage corporations are themselves financially troubled, so the federal government with provide each of them with increased line of credit to $200 billion. This stabilization effort is one of the features of Obama’s program to stop the rising number of foreclosure homes.

The rest of the money for Obama’s $75-billion plan will be provided by the U.S. Department of Housing and Urban Development. This part will be used to finance counseling programs for borrowers who are also paying other types of debts, using up more than 50 percent of their monthly income for debt payments.

According to former Federal Reserve Governor Lyle Gramley, the tactic of using money from federal agencies to fund the program of reducing foreclosure homes is forward-looking. This will conserve the bailout fund for the stabilization of the financial sector, as Congress is not likely to add more to the funding already allocated.

Details of Obama’s program for foreclosure homes have not yet changed. The plan will still support interest rates so that monthly payments would be reduced. The cash incentives for mortgage lenders and balance reduction incentives for borrowers still remain. For each loan modification that a lender completes according to Obama’s guidelines, the lender would receive a cash incentive of $1,000. The lender would also receive an additional incentive of $1,000 for every year for up to three years if the borrower stays current with monthly payments. Likewise every borrower who keeps up with monthly payments will receive an incentive of up to $1,000 per year of updated account.

With the promise of higher income, mother and daughter moved to a new apartment. This time, they did not have to share the apartment with anyone. But after a few days in their new place, Celestee received a letter from a real estate agency. It was a message informing her that the building she and her daughter are staying in is considered to be one of the foreclosure properties that the agency have.

Celestee seeked the help of her brother, Al Young, who is the vice president of a mortgage lender company in Los Angeles. With the help of her brother’s friend, the siblings were informed that Celestee’s landlord was served with the foreclosure papers two days before Celestee have signed the lease contract.

Celestee still tried to find ways to look for an apartment even if she does not have extra earnings. In May, she received a postcard from Re/Max United, the agency that is handling foreclosed homes in the area, telling her that she should vacate the house A.S.A.P. since the house is now bank owned.

Afraid that she and her daughter might be transferred to a shelter, she consulted with a housing court. She initially planned to request for an extension of her tenure. It is in this time that she learned of Children’s Aid Society. Seeing that her weekly income of $135 and monthly Social Security payment of $850 that her daughter receives from her disabled father, the organization knew that the Tates can barely make ends meet.

The organization took steps to help Celestee out of the problems of foreclosure homes. They moved the Tates to a new apartment, shouldered the $1,000 broker’s fee, $1,000 for the first monthly rent and $1,000 security deposit. The agency also pays the minimum $351.50 electricity bill payment.

Now that they are in a better situation, the Tates are actually thankful with the foreclosure problem that came in their way.

The counties of King and Snohomish had 1,839 foreclosed homes in October, an increase of 144% from September and an increase of 212% from October 2007. These increases are in contrast to the counties’ figures in September, when the counties had a 13-percent drop in foreclosures compared to September 2007.

RealtyTrac’s spokesman Daren Blomquist explained however that Seattle’s September figures could have discrepancies because of differences in foreclosure filing dates and RealtyTrac’s data entry dates.

The state of Washington had a total of 4,278 foreclosures in October, an increase of 119% from September and 95% from October 2007. With one foreclosure in every 631 households, Washington is 17th in a list of top foreclosure states in terms of foreclosure- household ratios. Nationwide, one home in every 452 households was foreclosed in October.

The state with the highest foreclosure rate is Nevada, with one foreclosure in every 74 households. It has held the highest monthly rate since January 2007. Its city of Las Vegas is also the highest in foreclosure rate among megacities, with one home in every 62 households being foreclosed.

Aside from Las Vegas, the other metropolitan areas with the highest foreclosure rates are the Florida cities of Cape Coral-Fort Myers, Miami, Fort Lauderdale and Orlando and the California cities of Stockton, Merced, Riverside-San Bernardino and Modesto.

Some foreclosure-laden states, such as California, had attained some reductions in their foreclosure rates in October after implementing foreclosure suspensions. But RealtyTrac’s chief executive James J. Saccacio called these suspension measures as mere delaying strategies. The temporary decrease in rates, he said, could even hide the real seriousness of the foreclosure problem. He called for more integration of foreclosure solutions that include meaningful loan modifications.

But looking at the number of sold properties, mostly foreclosure homes; it seems to be the best time to buy a foreclosed house. On the other hand, this spike in sales cannot be just the basis of whether or not to buy a repossessed property at this point in time. Here are a few things a prospective buyer can do.

Perfect Timing

Falling home prices does not mean it is the perfect season to buy into bargain. While there are far better chances to get a good deal when a lot of homes are for sale due to foreclosure, there is also a positive note on what is called “stocking the market”.

Perfect timing does not necessarily mean you would need to wait for that best buy but taking into consideration all other factors. Aspects such as finances- whether or not you can pay the house years from now- and the property itself- the vicinity and the neighborhood – are quite important.

Go Out and Research

This does not mean going house after house, asking what the neighborhood is and inquiring about the best bargain in the vicinity.

There are possible resources that can help you decide. Websites like Zillow and Trulia can help you know more about the latest trends in home sales. Where to find the best bargain and how to pulse the market like what it will be like few years from now as the housing market continues to be wobbly.

Check Your Pocket

Line up your finances. So that when you already find that perfect house, you can already move in. There are more documents now that lenders would require of you like information about your capacity to pay and your assets and liabilities.

Once you have completed your financial paperwork, scout out lenders who offer more competitive rates.

No one can absolutely tell when to make that big move. But if you make your own legwork and research, you might as well come up with a more rational decision. Because in then end; you cannot blame the market but only yourself.

Despite this forecast in foreclosures and the continuing rise in unemployment, the bank is making headway in helping 400,000 more customers pay their loan amortizations through its efforts in modifying loans. This restructuring program includes extensions on loans, reduction in principals, and principal tolerance or forbearance, which should not be mistaken for forgiveness.

In spite of all these efforts, foreclosure homes would still result from some of these loans. There is still a limitation as to what modification on the mortgage could be done which could benefit both bank and client. Imminent foreclosures are more probable for mortgages which are delinquent for 2 to 3 months.

Another impediment in the success of these programs is the difficulty some bankers face in trying to communicate their efforts to customers. Clients, who are delinquent in their mortgage payments, have the natural tendency to ignore bankers. Most fear these calls are demands for forced payments. JPMorgan Chase alone made 125 million calls but only six million actually got through.

Included in this program of trying to reach customers are JPMorgan Chase’s efforts in remodeling their branches to have more customer appeal, particularly branches of newly acquired Washington Mutual Inc. or WaMu. JPMorgan Chase bailed out WaMu, when this Seattle thrift bank collapsed due to this recent dilemma in mortgages and foreclosures.

Weak deposits and tremendous outflows led to this bank’s quick demise. JPMorgan finally put a halt to this negative flow and has started to focus on making WaMu profitable once more. Part of this is to grow the bank’s customer base through an increase in checking accounts and offerings of credit cards and other innovative products.

A 76% increase in sales of home since January this year has been reported by the realtors of the Greater Tampa Association. RealtyTrac, which is based out of California, has released a report which says that Foreclosure Homes in Tampa has gone up two times during the same period.

Deborah Farmer, who works for the Association of Realtors’, sees Tampa Bay as a very good market. She sees growing influx of people who want to buy homes in Tampa.

Bill Sanchez, another counselor who is working with people in various stages of foreclosures works for a non-profit organization, Tampa Bay Community Development Corporation, says he is getting to see people who have mortgages that are good. According to him things are getting worse and the worst period is yet to come. Jobs have been lost and people are having their homes reduced he adds.

With some much contradictory information floating around one can’t help but think they’re stuck in the middle of things. Morgan Barfield, a south Tampa resident, spent $80,000 on getting his home renovated, and he feels he’s one of them. He says that it’s not the receiving of offers that is a problem, there are plenty coming to him, the prices he’s been offered is what he has a problem coming to terms with. He’s received offers that are one third the value of what the property’s worth.

The one piece of statistic that people across can see eye to eye on is the prices of properties continuing to fall. Since January this year prices have fallen eight percent.