Not Ready To Take A Loss
The Herald News reports from Illinois. “The foreclosure crisis has hit home for the Triezenbergs of Manhattan Township. Mark and Tia Triezenberg and their five young children, including one with severe disabilities due to autism, must leave their home by Aug. 29. Mark, who ran his own home-building business from 1999 to 2008, is looking for a rental unit. The couple took out a mortgage on their 4,500-square-foot, five-bedroom home with Lincoln-Way. The mortgage was sold off to another company. The Triezenbergs also took out a home equity loan on the house through Lincoln-Way so Mark could buy 10 lots for his business. The two loans totaled $825,000.”
“‘They approached us when we were doing good,’ Tia said. ‘Then when things got tough, they pushed us aside and said we’re on our own.’”
“‘This is like Pearl Harbor,’ Mark said during an interview at a Mokena restaurant. ‘Only a few people saw this coming.’”
The Detroit News in Michigan. “Southeastern Michigan set a foreclosure record for the first half of the year — 47,563 foreclosures, a 35 percent jump from the first half of 2009. Teresa Blundell wasn’t one of them — but just barely. It took the 55-year-old Lapeer woman nearly a year to get her mortgage modified to a lower payment. In the meantime, she was kicked out of a federal loan assistance program, her lender trashed her credit, and she was one week away from foreclosure without even knowing it. Five years ago, her home had been valued at $175,000. But that fell to $75,000 when the real estate bubble burst, making a new loan out of the question.”
“It’s a success story that’s rare under loan modification programs. Many homeowners who don’t get a federally backed no-fee modification get more expensive modifications from lenders, often with added fees. And, as Barry Zigas, director of housing policy for the Consumer Federation of America, points out, homeowners with no income can’t pay any loan, no matter how generously it’s restructured. ‘The program isn’t very helpful to people who can no longer afford their mortgage,’ Zigas says. ‘More than two-thirds of the applications for HAMP list loss or lack of income as the primary reason for requesting the modification.’”
“For homeowners who do get a modification, the hope is that changes to their loans will give them breathing room until home prices recover and they can refinance or sell. Blundell says that’s her goal. Her interest rate will start gradually moving up again in five years. ‘I’m hoping that people can actually afford to buy a house again,’ she says. ‘That’s my plan.’”
WEWS 5 in Ohio. “Fifty percent of Cleveland mortgages are underwater according to Cuyahoga County Treasurer Jim Rokakis. ‘In the Gulf of Cuyahoga County you can’t clean up the foreclosure mess until we cap the gusher of foreclosures. There’s no BP in sight trying to lower a cap on this gusher. It flows freely,’ Rokakis explained.”
“Rokakis heads to Washington Tuesday and hopes to talk with Obama Administration officials about potential solutions, so homeowners don’t just walk away from their mortgage. He believes the treasury needs to start an incentive program to force mandatory principal reductions. This would reduce loans to their current values, instead of having a $150,000 mortgage on a house valued at $100,000.”
“Rokakis would like the second component of that program to give bankruptcy judges the authority to reduce primary residential properties to their current value. It would be a cost to taxpayers, but Rokakis feels we’re already footing the bill for these programs on the back end.”
“‘The taxpayer will pay just as they paid for TARP, just as they paid for the bank bailout. But when mortgages go bad and at record numbers, eventually those properties come back at a much lower number and banks reflect those losses. We’re going to pay for those anyway. The difference is if we accept the loss now, we can save what’s left of the equity and more importantly we’ll save neighborhoods,’ Rokakis said.”
The Akron Beacon Journal in Ohio. “Government and community leaders call abandoned homes a scourge on neighborhoods, saying they destroy areas and drag down property values. But without a comprehensive list detailing how many there are, and where they are, it’s difficult to know the true impact and to address the problem. To that end, the Summit County Fiscal Office is asking county residents for help. People can log on to a Web site and anonymously report suspected abandoned homes.”
“It’s unclear how many properties are abandoned in Summit County, although officials worry that the number is high because the region has been hit hard with mortgage foreclosures. A survey last year of a two-mile area in East Akron turned up 523 vacant properties.”
The Plain Dealer in Ohio. “New foreclosure filings in Cuyahoga County rose more than 12 percent during the first six months of this year, with the suburbs continuing to feel the brunt of the increases. ‘We’re seeing increasingly more folks coming from the Westlakes and the Beachwoods,’ said Mark Seifert, Empowering and Strengthening Ohio’s People’s executive director. ‘By and large we don’t see bad loans anymore. These are good traditional loans. . . it’s unemployment that’s killing people.’”
“Euclid had the highest number of suburban filings during the first six months of the year — 420, a nearly 18 percent increase from the same time last year. But the city said a good number of filings have not been taken to judgement and sheriff’s sales.”
“‘The banks are sitting on them,’ said Marty Castelletti, the city’s manager of neighborhood development and chairman of its foreclosure prevention committee. ‘Banks seem to be trying to control their inventory by not letting too many foreclosures happen too fast so they track them better and dispose of them better.’”
The Grand Forks Herald in Minnesota. “It’s a buyer’s market short of buyers for lakeside cabins and vacation homes in northern Minnesota. A few years ago, many believed that every lake front property in the Land of 10,000 Lakes was going to sell fast, and prices climbed at double-digit rates. Now, some shorelines in northern Minnesota are dotted with ‘for sale’ and bank foreclosure signs.”
“It’s part of a growing trend: According to the National Association of Realtors, one of every 10 vacation homes nationally is in foreclosure, the highest rate in five years.”
“Greg Anselmo is a broker for Edge of the Wilderness Realty in Itasca County. He said counting lots, cabins and vacation homes, there are about 300 to 500 pieces of property available. ‘We’ve got 1,000 lakes in this county, and we’ve got a shortage of buyers, that’s for sure, and I don’t know how to change that,’ Anselmo said.”
“With buyers seeing a lake home as more of a want than a need, Anselmo said Realtors are putting in a lot of time evaluating property. ‘If it’s 35 percent off the high point from 2006, that’s probably where it should be,’ Anselmo said. ‘Buyers are pretty sharp and not going to overpay on the high side. If they see value in it, they’re making offers.’”
“In the Brainerd Lakes area, Realtors say banks are involved in about two of every five sales of waterfront property, which has helped push prices down, especially on the high end. Mark Kuhnley, Edina Realty, recently told the St. Paul Pioneer Press a lake home in the Brainerd Lakes area listed at $1.7 million two years ago is on the market at $999,000. Another home at $1.8 million three years ago is now $1.3 million. Kuhnley said there are 80 properties at more than $1 million on the market.”
“As for the sellers of lakefront property, some are willing to take a hit, some are willing to wait it out, and there are others not ready to take a loss. Anselmo likens the market to mutual funds and commodities. ‘It’s supply and demand,’ he said. ‘There’s a supply of homes, but people that normally had the money just aren’t in a position to demand a lake home.’”
Fox 11 in Wisconsin. “One in every 113 homes in Wisconsin is in foreclosure, and it’s hitting people right here in Northeast Wisconsin. For Dawn Gervais, home is where the heart is. And as her home slips into foreclosure, her heart is breaking. Three years ago, Gervais bought a house on Green Bay’s west side. With her husband, and four kids, she was living the American dream. But she fell behind on a few payments and now that dream is becoming a nightmare.”
“‘I have to come up with the current then and then you have the back payments,’ said Gervais. ‘I took on a second job trying to make things work, and it just seems like it’s not working.’”
“Gervais’ home is up for the sheriff’s auction in August, and she’s not alone. Brown County foreclosures are scattered all over the area. But inside the sheriff’s department, the walls are riddled with hundreds of foreclosure properties. ‘I would say we’ve got another good two years of more of the same…This is just the tip of the iceberg,’ said Realtor Yang Kong.”
“Kong works with distressed homeowners on short sales, which is trying to sell a home before it falls into foreclosure. ‘I think everybody’s one paycheck away from not making that mortgage payment. I don’t see a lot of people with big reserves,’ said Kong.”
“Gervais’ husband was let go of his job, leaving her struggling to make ends meet and feeling like they never will. But getting foreclosed on isn’t just about losing her home. ‘I’ll be admitting to failure, and looking like I can’t handle life,’ said Gervais.”
