An up-to-date centralized reporting mechanism on foreclosure properties and loan modifications across the U.S. will be created if a proposal to require the mortgage industry to make updated foreclosure reports is enacted.

The proposal to track foreclosed homes reliably is included in the House bankruptcy bill which is set to be discussed in the Senate.

A recent report from the Congressional Oversight Panel, headed by Elizabeth Warren, pointed out the lack of reliable data on foreclosures, such as number of foreclosure properties, causes of foreclosures and the results of foreclosure mitigation programs. The report highlights the failure of housing and federal banking agencies to collect and analyze foreclosure data despite the fact that the country is now 2 years into the housing crisis.

Representative Brad Miller, who introduced the foreclosure data gathering provision together with fellow Democratic Representative Elijah Cummings, said he has been campaigning for the tracking of foreclosure properties for over a year. But the mortgage industry has been blocking his efforts to call for accurate reports on foreclosure properties.

Miller also said he is starting to doubt the foreclosure numbers released by the Mortgage Bankers Association and other trade groups because they do not want government help in data gathering.

Another economist concerned about the state of foreclosure data gathering is Dean Baker, who is working with the Center for Economic and Policy Research. He said the banks prefer the status quo — lack of reliable data on foreclosure properties — because they do not like to show how troubled they really are.

Miller reiterated that reliable data on foreclosure properties and loan modifications are needed so Congress would know the number of foreclosure properties, the number of modifications, details on the modifications and the re-default rates.

Representative Cummings wonders why many homeowners whose loans have been modified are re-defaulting. According to one report, roughly half of those modified loans had their amounts increased instead of having them reduced.

The media has been relying on foreclosure tracking firm RealtyTrac, which releases its report on foreclosure properties monthly. Analysts point out that RealtyTrac monitors foreclosure filings based on court records and excludes other important information on the loans. They also said that RealtyTrac’s tracking method overstates figures on foreclosure properties because it counts foreclosure filings when there can be more than one filing on a certain property.

Homeowners who applied for refinancing to avoid turning their properties into repo homes accounted for almost 78.5 percent of the total number of mortgage applications.

For the period covered, mortgage applications jumped by 32.2 percent to 1,159, with majority of applicants distressed homeowners who are trying to save their properties from becoming repo homes.

The volume of homeowners who applied for refinancing is expected to somehow reduce the growing number of repo homes in the country.

Foreclosure monitoring firm RealtyTrac’s U.S. Foreclosure Market Report for January 2009 showed that repo homes filings increased by 18 percent to 274,399 from the same month last year. The data also showed that one in every 466 homeowners received a repo homes filing in January.

Meanwhile, interest rates on mortgage loans declined after the U.S. Federal Reserve said that it would purchase Treasury securities and increase the amount of mortgage securities that it plans to buy.

The purchasing plans of the Federal Reserve are part of the department’s effort to lower mortgage rates to boost borrowings, reduce foreclosure rate and strengthen and stabilize the housing market.

According to associate vice president of MBA’s economic forecasting, Orawin Velz, the interest rate decline became a refinance incentive for distressed homeowners who want to save their properties from being added on the growing list of repo homes.

The MBA data showed that the cost of borrowing on a 30-year fixed mortgage is estimated to be 4.63 percent, a decline of 0.26 percent from a week before March 20. Furthermore, the interest rate dropped below last year’s level of 5.74 percent.

On the other hand, the excitement generated by low interest rates on refinancing did not transcend to loans to purchase homes.

The MBA index for seasonally adjusted purchases increased 4.2 percent to 267.8. However, the seasonally adjusted index was 33.7 below its percentage of 403.7 the previous year.

Meanwhile, some mortgage servicers have hired additional staff to handle the volume of refinance applications they received from homeowners who want to avoid foreclosures.

The index of MBA’s seasonally adjusted refinancing applications increased to 41.5 percent to 6,363.2. Index figures jumped by 49.5 percent from its previous year number of 4,255.2.

The 30-year fixed-rate mortgage loans averaged 5.9 percent, a dropped from 6.04 of the previous week. This marked a decline of below 6 percent nationwide since last October.

The rate decrease came about after the U.S. Federal Reserve announced its plan to buy at least $600 billion owed or guaranteed debts by the government-sponsored enterprises, Federal National Mortgage Association or Fannie Mae, Federal Home Loan Mortgage Corp. of Freddie Mac and Government National Mortgage Association or Ginnie Mae.

The Federal Reserve aimed to reduce home mortgage rates by lowering borrowing costs of these three government-backed mortgage issuers. It is expected that borrowers who want to avoid foreclosure would take advantage of reduced interest rates. However, most homeowners who decide to refinance will have a difficult time qualifying because they either have mortgage arrears or low credit scores.

Mortgage broker Jeff Lazerson said that borrowers who want to avoid foreclosure want to exit from adjustable-rate mortgages which are scheduled to readjust to higher rates in 2009. He adds that for owners of distressed properties to qualify for low interest rates, they must have a good credit score.

Homeowners who can provide a 25 percent down payment and have credit score of equal to or more than 740 can avail of a 30-year fixed-rate loan for a maximum of $417,000 at 5.25 percent interest rate. Those who could provide a 20 percent down payment and have a 720 credit score may avail of a 5.375 percent interest rate on a 30-year fixed-rate loan.

California Credit Union League economist Terrin Griffiths pointed out that the housing market’s condition would continue to be bleak and foreclosures would still be on the rise because homeowners still need money for down payment and some borrowers are hesitant on buying in an unstable market.

Now the crisis has blown out of proportion as fallouts from risky mortgages multiplied in number and foreclosures occurred left and right across the nation. The crisis on foreclosures, like a viral disease, quickly spread to other countries and other lending which quickly placed a freeze on credit. Huge losses piled up for banks and financial institutions who owned these mortgages that drastic actions were needed to be done.

Facing a financial crisis comparable to the 1930s, officials cut key interest rates in a bid to save the economy last September 2007. Foreclosures continue to increase since then with no letting up. The federal government has made unprecedented moves to save the financial market by providing loans to banks, swap mortgages for Treasury securities and investing on other financial companies. Federal reserves were also used to assist investment firms and bailout insurance giant AIG.

Several sectors have criticized the government for these actions, fearing risks for taxpayer’s money and enticing financial companies to take further risks with the hope of a bail out plan from the government.

Other sectors have lambasted the government for focusing on banks but not doing any concrete actions in providing direct financial support to homeowners in danger of foreclosures. A clamor for a mortgage bail-out plan is pushed from all sides to help families in distress and prevent foreclosures.

A year after the initial containment moves from the government, the financial conditions continued to deteriorate. Unless more drastic and effective actions are put in place, the meltdown will continue to spread and put more families in jeopardy.

Aside from this figure, about 2.1 million are also over the edge — that is basically fueling trouble if the time comes that financial crisis hit.

Negative equity, the technical term for this trend, leaves homeowners at risk to foreclosure. Reason behind is the borrower has a nil home equity to use when financial crisis hits. They cannot turn to refinancing or home equity loan to recover their mortgage payments.

On the other hand, there are also cases of underwater homeowners who manage to pay
their bills. These are those who have high income to pay their monthly dues.

Nevada, among other states, has the highest number of underwater borrowers. 48 percent of homeowners in the state have a negative equity. This percentage is almost 50 percent higher than Arizona that has 29.2 percent. Other states are Florida at 29.2 percent and California at 27.4 percent.

Bubble markets, as what these states are called, have fallen home prices as a result of economic crisis and rampant job losses. The situation is very crucial that even if you put a down payment of as much as 20 percent, it still isn’t a good chance. This trend can also be found in the area commonly known as rust belt regions where Michigan has the highest number of negative equity homeowners at 39 percent. Second to it is Ohio at 22 percent.

More so, another issue that makes the situation more crucial is the great influx of immigration. A lot of people that just came in these states owe more in their mortgages than the actual worth of their home. They was not able to build more equity of which they can turn in to when crisis strike.

Meanwhile, states that have the least number of underwater homeowners are New York at 4.4 percent, Hawaii at 5.6 percent, Pennsylvania at 5.7 percent and Montana at 6.9 percent.

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.

Senator John Ensign and Senator Maria Cantwell have proposed an amendment that will basically extend energy tax credits for another year. If approved, it will cost the government $19 billion. Because there are no plans of cutting expenditure or increasing taxes, the said amendment will cause problems for the approval of the housing rescue bill.

Democrats believe that the energy proposal is actually a move by the Republicans to block the housing bill, which has received criticisms from the opposition. Even the White House has been vocal on its disapproval. For the mortgage rescue bill opponents, the said law will only serve to protect those irresponsible lenders and borrowers.

Senator Ensign was also criticized for pushing the energy proposal considering that his state, Nevada, possess the highest foreclosure rate in the nation. At present, there is one foreclosure filing for every 98 households in Las Vegas and home prices have dropped by almost 30 percent statewide.

Time is also another issue since there is the July Fourth recess and the August recess, which lasts for an entire month. according to Senator Harry Reid, Senate Majority Floor Leader, he will do everything he can to ensure that the housing bill is completed as soon as possible, even if it means sacrificing their vacation.

With no clear end in sight, the American public is worried about the likelihood that home prices will decline further and more distressed homeowners will lose their homes to foreclosure. The federal government should set aside politics for once and focus on finding a long-term solution to the mortgage crisis at the soonest possible time.

Because of this higher-than-average foreclosure rate, state officials, together with a non-profit organization, have decided to investigate the developer, CasAlegria. It was reported that the said developer charged a high interest rate to first time buyers in exchange for some compromise on requirements such as good credit rating and even Social Security Number.

Such incentives naturally attracted home buyers even with the high interest rate. Unfortunately for most who dreamt of buying a happy home, the mortgage terms were simply too much to handle. Their credit rating did not improve even after paying for a couple of years, which made refinancing difficult. In the end, they could not afford to pay the monthly mortgage dues and end up facing foreclosure. In most cases, the repossessed homes end up being sold by CasAlegria once more, after purchasing it from the foreclosure auction block.

The Houston-based real estate developer, on the other hand, defended itself by stating that financial difficulties and mismanagements should not be blamed on them. Also, they are not obligated to report to the credit bureau regarding on-time payments, which would have improved the borrower’s credit score.

In an effort to seek help for their mortgage problems, the local homeowners turned to ACORN, a non-profit organization. The said organization was formed to stop predatory lending practices. In this case, ACORN is hoping that they could push CasAlegria to lower their mortgage interest rates as well as report the payment history of each of their borrower to the credit bureaus.

Nationwide, foreclosure filings soared by almost 50 percent last May compared to last year, as more and more families struggle to keep up with their mortgage payments. It certainly did not help that consumer debt is on the rise as well as fuel and basic commodities prices.

Understand Florida foreclosure rate.

As a buyer, you will need to know the main difference between these two in order to realize your chances of getting a mortgage for the purchase of one of these Miami bank foreclosures.

Mortgage Pre-Qualification

When you speak of getting pre-qualified for a loan, you should understand that it is a process where you would need to contact a lender, who will, in return, ask you specific information regarding your financial status. In most cases, it will include details you’re your current address, social security number and annual income. The lender might even ask your permission to obtain a credit report. Once all the information is obtained, the lender will then send you a letter informing you of how much mortgage loan you are qualified for. Remember that this letter comes with many disclaimers including one that states that you will still be subject to a formal application procedure.

Mortgage Pre-Approval

On the other hand, getting pre-approved would involve the standard underwriting process employed by lenders. This includes verification of income, cash reserves, employment, credit history and other qualifying ratios. You should understand that even though you were pre-qualified, you might not get pre-approved. In most instances, the information that you have relayed verbally during pre-qualification might cause problems during the mortgage approval process.

It would be recommended that you get pre-approved first before you make an offer for any of these Miami FL foreclosures. Once this is accomplished, you can now make a shortlist of amazing foreclosed properties. Of course, it would help if you have Miami foreclosure listings to guide you in your search.

Although the many housing loan products might make you confused, you should first know that there are actually more basic and simple mortgages that you can consider especially if you are looking to own a home in pre-foreclosure stage.

• Assumption of an Existing Housing Loan – instead of taking out a new loan, you can always choose to assume the existing mortgage on the property. Aside from saving you the trouble of getting pre-approved and being charged for administrative fees, this option might allow you to enjoy a much lower interest rate compared to the present market rate. You should just make sure that the mortgage is transferable and the difference between the original and current home value is covered.
• Seller Financing – there are several reasons why you should consider this mortgage option. You might have poor credit which will make it difficult for you to get approved for a loan or you might want to enjoy the benefit of not having to pay mortgage insurance. Either way, you must remember that this mortgage deal can only be enjoyed for a couple of years and of course, subject to seller’s approval.

Whatever mortgage option you choose, it is important for you to learn how to negotiate some of the mortgage details. Depending on your current financial standing, you can actually adjust the length of the loan term and the interest rates. Contrary to what most people believe, you can choose a 15-year instead of a 30-year loan term or pay points to lower interest rate. There are online mortgage calculators that you can utilize to determine your payment capability.