Houses lost to foreclosure are breeding trouble, adding neighbors to the growing ranks of victims.

Stagnant swimming pools spawn mosquitoes, which can carry the potentially deadly West Nile virus. Empty homes lure squatters and vandals who break windows and spray graffiti. And brown lawns and dead vegetation are creating eyesores in previously well-tended neighborhoods, bringing down everyone’s values.As foreclosures accelerate, local officials will need to act quickly to prevent a domino effect. If the foreclosure trend continues on its current pace, experts warn, communities will need to act decisively to avoid blight.
What can city officials do? They can order pools to be fenced and houses secured against trespassers – that is, if they can find the bank that owns the house. Often times, it’s the neighbors who have to pitch in, on their own to mow lawns, water, pour chemicals in swimming pools to kill mosquitoes and spray over graffiti.Other problems harder to solve are when vagrants and squatters move into these abandoned homes. There have been instances of squatters changing locks, turning on electricity and cable TV and moving in new furniture. If they know what they are doing, it can take 6 months or more to force them out – legally.Often times, when police show up, the squatters will produce leases. At this point, it’s tough to prove whether the lease is valid and the police just give up because after all, evictions are a civil matter. Sometimes, the easiest way to get squatters to leave is to just give them a couple thousand dollars to avoid the court costs of going through an eviction.
If your own payments have recently increased or will increase, the best thing you can do is to try to refinance to a lower payment. There are still many lenders who are willing to help you refinance – despite the tightened lending standards you’ve been reading about.

(View new payment options on {!custom address}, based on your home value by getting multiple quotes in one place)

In a report out yesterday, August 27, home prices have dropped for 12 consecutive months, a new record. Sales also fell in July, according to the National Association of Realtors.

One analyst, Joel Naroff, said alot of homeowners are in denial about what their homes or condos are worth. “Either they don’t think they have to drop their price or they don’t think that they have to drop the price nearly as much as they really do to clear the market. We should be seeing, in some markets, 30 and 40 percent declines in prices,” Naroff said.

ONLINE VALUE: See the value of your home online based on county tax records and other home values in your area.

In past decades, families used the equity in their homes as a sort of piggy bank, borrowing money against their house and increasing their spending with the extra cash. With slumping home prices, that financial cushion has disappeared for many families.

There are still lenders willing to refinance and you should check if you can stop payment increases by refinancing your home or condo. These are the lenders who welcome your business.

For the first time since statistics began in the 1950’s, nationwide home prices are expected to fall this year, with further price falls in 2008 and 2009.

This is bad news for the 2/3’s of Americans who own their own homes, but good news for the 1/3 of Americans who are renters and might benefit if it costs less to buy a home.

In past decades, families used the equity in their homes as a sort of piggy bank, borrowing money against their house and increasing their spending with the extra cash. With slumping home prices, that financial cushion has disappeared for many families.

One analyst, Global Insight, expects prices to fall 10% in inflation-adjusted terms between this year and 2009. In some states, such as California, prices are expected to fall 20% after taking inflation into account.

You can see the 1-year moving average of your homes price by plugging in your street address and zip code on the main page of this website.

You can also benefit by refinancing your home now (get cash out), before lending standards tighten further and/or before your home value falls further.

If your equity dries up, your home won’t appraise for the refinancing you are looking for and you will remain locked in your current high payments.

Freddie Mac, reported yesterday that 30-year, fixed-rates averaged 6.52%, the lowest since May.

This provides a dose of hope for home owners locked in to payments they can’t afford which have already or will soon adjust sharply upwards.

Rates on 15-year fixed-rates, a popular choice for refinancing, averaged 6.18% this week. The 5-year adjustable rate was 6.34% and the 1-year adjustable rate was 5.6%.

There are still lenders who are willing to refinance distressed homeowners and experts recommend getting several quotes and then choosing the best rate.

August 23, 2007 - Even in strong housing markets like New York City (where foreclosures were up 22% in July), foreclosures are up dramatically. Nationally, according to Realty Trac, an online marketplace for foreclosed properties, foreclosures were up 93% from last July. Five states; California, Florida, Michigan, Ohio and Nevada accounted for more than half the nation’s total foreclosure filings, said RealtyTrac.

As unfortunate as it is, someone else’s pain can be your gain. The bargain hunters are going to pick up some steals during the next several months. Even the corporations are getting in on the bargains. Bank of America just invested $2 billion in Countrywide, the nation’s largest lender.

What should you do during this time of uncertainty?

1. If you are looking to buy a house, check the listings of recent foreclosures - and then pick up a bargain. Enter the zip code you are looking for and then choose from over 1 million distressed or foreclosed properties.

2. If you are a homeowner, you can prevent your own foreclosure by reducing your monthy payment. This can be done by refinancing your home or condo from one of the banks that are still providing this service. These lenders can still refinance your payments - even if your credit is not perfect.

Good news today from Washington Mutual (WaMu). WaMu plans to expand it’s lending to borrowers with less than perfect credit.

While Countrywide and Capital One are cutting back on loans to people with less than perfect credit or people who can document their income, the nation’s number 3 lender, WaMu is stepping into the void and expanding their lending/refinancing to these people.Because WaMu can keep these loans in their investment portfolio (not have to sell them to Wall Street investment firms), they can continue making these loans without regard to Wall Street sentiment. WaMu chairman, Kerry Killinger, said that refinancing and new loans can now be made on highly profitable terms because so few other lenders are making them.

These lenders are actively looking for new business, even for customers with less than perfect credit.

Mortgage Payment Q & A

Q. My mortgage is with Countrywide (or another lender in trouble). If they go bankrupt, as some have suggested, do I have to continue making payments?
A. Unfortunately, even if your lender goes out of business, you must continue payments. It’s been common for lenders to sell loans to other banks or Wall Street firms for years. The only thing that might change is the address you mail your payments to. If you don’t make payments, whoever bought your loan will be able to foreclose.

Q. I recently applied to refinance. I heard that lenders won’t touch anybody with less than perfect credit and alot of equity. Is that true?

(more…)

Loan Types - 1)Option ARM or 2) Interest Only ARM

While most of the mortgage problems so far have focused on the huge losses flowing from subprime home loans, the option ARMs and interest-only ARMs held by more creditworthy borrowers loom as another calamity in the making.

(View new payment options on, based on your home value by getting multiple quotes in one place)

Did you sign up for one of these without knowing? Almost 40% of people have these dangerous loans.
What’s an Option ARM? - A low, introductory teaser rate that lets you defer interest payments to later years (your loan balance is actually increasing every month).
What’s an Interest Only ARM? - You pay only enough each month to cover the interest. The loan balance never goes down.

Why are these loans dangerous and why do almost 40% of people have them, often without knowing?

These loans were fine when property values were skyrocketing. With property prices nationwide rapidly deflating, more and more people are “upside down” on their loan, meaning they owe much more than their house or condo is worth. This gives homeowners no incentive to keep paying on a valueless property - they walk away and property values fall further (a vicious cycle).

ONLINE VALUE: See the value of your home online based on county tax records and other home values in your area. (1 year moving value)

There are still lenders willing to refinance and you can check if you can stop payment increases by refinancing your home or condo. There are still lenders who welcome your business.
View new payment options, based on your home value by getting multiple quotes in one place.

The available pool of mortgage money is shrinking and homeowners are finding it harder to buy a home or refinance their homes at an interest rate they can afford. Often times, 1% can make the difference in being able to afford your payments and foreclosure. This is why it is more important than ever to shop around for the best rate and when you find it, lock it in ASAP.Just this month, the majority of lenders have eliminated 100% financing and programs that require no verification of income or assets. The minimum credit score to qualify has also been raised. Over 70 lenders have gotten out of the business altogether while others have simply gone bankrupt.What is unprecedented is the speed of the change in the availability of loans. Just a month ago, about 90% of loans were approved. Now the figure is closer to 50%. Tomorrow, it could be down to 25%, or back up to 90%. Nobody knows.

The good news is that these lenders are still competing for your business and offering you, as the experts suggest, multiple quotes from different banks and allowing you to find the best rate.

With lenders dropping like flies (about 70 lenders stopped doing business in the past 6 months), you have got to move fast if you want to refinance or buy a home.

Even borrowers with the best credit are getting wildly fluctuating rates.Example: On the same day, Countrywide was offering a fixed rate for 6.75% while Bank of America was offering the same loan for 7.875%. By the next day, Bank of America was lower. The chaos is forcing homeowners looking to refinance to look for new strategies.

According to BankRate.com, it’s more important now than ever to shop around with many lenders for your best rate. In one day, loans were being offered from between 6.40% to 8.10%. The difference: $576 per month on a normal 30 year fixed rate loan.

It also important to get an approval, a rate lock and an estimate of closing costs ASAP, and in writing. With lenders folding left and right, unless it is in writing, you are taking a big chance your loan will not be there when you are ready to close escrow.

The good news is that these lenders are still competing for your business and offering you, as the experts suggest, multiple quotes from different banks and allowing you to find the best rate.