It appears that HUD is trying to pilot a FHA Foreclosure Prevention but as simple as it appears, why has it taken so long?

The Department of Housing and Urban Development is starting a pilot program in Detroit to purchase Federal Housing Administration single family loans from lenders after all loss mitigation options have been exhausted and foreclosure is the next step.

“Under this program, we will create means for lenders or investors to sell their non-performing mortgages before foreclosure to HUD and a joint venture partner who will be responsible for servicing the loan and helping families stay in their homes,” HUD Secretary Steve Preston said.

HUD expects to purchase the FHA loans at a “significant discount” so the joint venture partner can modify the loans and make it more affordable for the homeowners.

Foreclosure filings declined 3% in June but were still 51% higher than the level recorded a year earlier, according to RealtyTrac.

The company’s U.S. Foreclosure Market Report indicates that foreclosure of 252,363 filings that consist of default notices, auction sale notices, and bank repossessions, were reported in June.

“June was the second straight month with more than a quarter million properties nationwide receiving foreclosure filings,” said James J. Saccacio, RealtyTrac’s chief executive officer.

“Foreclosure activity slipped 3% lower from the previous month, but the year over year increase of more than 50% indicates we have not yet reached the top of this foreclosure cycle”.

Bank repossessions continued to increase much faster than default notices or auction notices in June, he said.

The company reported that Nevada, California, and Arizona again recorded the highest foreclosure rates in June.

A new reports says that homes in the Inland Empire are most likely to lose value.

Massachusetts has some new tools to fight the foreclosure crisis. Twenty million, to be exact.

The state has just activated a 20 million dollar loan fund for community groups to buy foreclosed homes before they become neighborhood wrecking eyesores and worse.

Foreclosures are devastating both for individual homeowners and their families and also to communities.

The 20 million dollar fund will provide loans of 250 thousand to a million dollars to community groups.
That’s expected to buy 250 to 500 foreclosed homes and apartments, with the Boston, Brockton, Chelsea, Lawrence, New Bedford, Springfield, and Worcester areas.

Notably, it doesn’t use any state money. 17 million comes from private lenders in the Massachusetts housing investment corporation, 2 million from the Boston foundation, and 1 million from the Hyams foundation in Chelsea.

New foreclosure filings rose 4% in April and were nearly 65% higher than the level recorded a year earlier, according to RealtyTrac.

The company’s U.S. Foreclosure Market Report indicates that foreclosure filings, default notices, auction sale notices, and bank repossessions were reported on 243,353 properties in April.

"The total number of U.S. properties with foreclosure activity in April was the highest monthly total we’ve seen since we began issuing the report in January 2005," said James J. Saccacio, RealtyTrac’s chief executive officer. "Although only about 2% of households nationwide are in foreclosure, these properties contribute to already-bloated inventories of homes for sale and put downward pressure on home values."

The company noted California, Florida, and Ohio recorded the highest foreclosure rates in April.

Florida Home Resales Drop

Sales of existing single family homes in Florida totaled 8,106 in November, a decrease of 30% from the level recorded a year earlier, according to the Florida Association of Realtors.

The median sales price of homes sold in November declined to $215,800, down 10% from $239,800 in November 2006, FAR reported.

Among the state’s larger markets, resales decreased 35% in the Orlando metropolitan statistical area and 59% in the Miami MSA, while median resale prices fell to $239,000 in Orlando, down 9% from $263,600 a year earlier, and to $359,300 in Miami, down 4% from $372,400 a year earlier, the trade group said.

House Panel OKs Bankruptcy Bill

The House Judiciary Committee approved a narrowly targeted bankruptcy bill by a 17-15 vote 12/12/2007 that would give subprime and nontraditional mortgage borrowers facing foreclosure one last chance to get their mortgage restructured so they could stay in their homes.

Only homeowners who have received a foreclosure notice could seek a Chapter 13 restructuring under a compromise worked out between committee Democrats and Rep. Steve Chabot, R-Ohio.

Under the bill, bankruptcy judges could waive prepayment penalties and reduce the mortgage amount to the fair market value and reduce the interest rate to a conventional rate plus a risk premium.

This restructuring would be limited to both subprime mortgages and nontraditional mortgages originated from 2000 through the date of enactment of the legislation.

The Mortgage Bankers Association and the American Bankers Association oppose the bill.

Panel Slates Mark up of Bankruptcy Compromise

After several failed attempts, the House Judiciary Committee is slated to mark up a bankruptcy bill on Wednesday that would allow homeowners filing for Chapter 13 relief to get their mortgages restructured.

Committee Democrats have agreed to several changes to the bankruptcy bill (H.R. 3609) to secure the support of Rep. Steve Chabot, R-Ohio.

As originally introduced by Reps. Brad Miller, D-N.C., and Linda Sanchez, D-Calif, H.R. 3609 would allow bankruptcy judges to reduce interest rates and the principal amount of a mortgage, which mortgage industry groups and several committee Republicans warned would scare off mortgage investors and damage the secondary market.

Under the proposed changes, the bill would cover both subprime mortgages and nontraditional mortgages that were originated after Jan. 1, 2000 up to the date of enactment of the legislation. The compromise also includes new criteria for homeowners who could qualify for bankruptcy relief.

Dow Tumbles After Rate Cut. The Federal Reserve cut its key interest rate again for the third time in three months. But the anti-recession measure got a cold reception from Wall Street. Anthony Mason reports.