A recent survey says that nearly 8.8 % of the mortgages are nearing foreclosure because the payments are long overdue. Since 1979, this has been the highest rate, a total loan of 4.8 millions. This huge number of foreclosures is not easy to avoid, that too with the help of only three banks.

A program called Hope Now, sponsored federally, fixes the rate of interest for five years, thus helping some borrowers. However they must be debtors who pay their installments regularly and if their property is not to be foreclosed.

Usually, the owners want the interests to be fixed at an affordable rate but this is difficult with most of the banks. The community development financial institutions, are trying their best to provide this help to them. In Milwaukee, the bank named Legacy, provided loans to some distressed people, whom they selected over the net. The people this bank caters to are primarily ones, who are unable to pay the loans after they have been reset. Legacy Bank has plans of fixing the rate of interest for 15 to 30 years. This bank at present asks for just 2% interest.

A Chicago based financer called the Shore Bank, has provided 90 loans so far. It aims at providing the owners about 510 more loans to help people retain their property, by the end of this year. The community as a whole can support the cause of the bank by investing in the bank online.

The increase in foreclosure will gradually lead to several problems. The major problem is the reduction in the tax levied on properties. The empty houses could well become the den of anti social activities. To solve this problem the bank is going to use two reputed non- profit organizations, for buying, selling and financing house owners facing foreclosure.

With the steady rise in inflation the investors will gradually realize a reduction in their capital invested, thus dampening their enthusiasm. The noble attempt of the banks, some feel, may not bear fruit always.

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Jackie Harvey is one of the many realtors twiddling her toes waiting for customers. Till 4 pm nobody had knocked on the doors of her office in Arbor Lane. It had been the same yesterday. On her shop shelves was a Spanish style house. There are quite a few others as she waits for footfalls. The foreclosure crisis has hit her in a bad way. “We’re starving,” she moans struggling with an unemployment compensation.

Victorville and other exurbs like it is the core of the foreclosure crisis in America. Only a year ago it was ranked the second fastest growing city after New Orleans with a surge of 9.5% from July 2006 to 2007. Recently foreclosures have doubled with the price of new houses going down by a whopping 43%.

The exurbs were fast growing new areas on the fringes of the jumbo cities. For these it will be no easy task to get back on the rails as easily as the other traditional suburban and urban centres. The latter have experience about downturns. This makes many who are optimistic that Victorville will pull through. Hans Johnson of Public Policy Institute of California comments, “Places like Victorville that are on the edge of growth have seen boom and busts before.” It will recover he adds.

Victorville was a vacation spot in the desert in the 1920’s. The clean desert air attracted Hollywood residents. It was a natural halting place for those driving through California. Here there was an air force and a flight training school that brought jobs and people. When the base was vacated the city fell into bad days. About 10,000 jobs vanished. These were troubled times and the local economy began to totter. Not to take things lying down the city fathers turned to developing the air base anew. It soon created new jobs and gave the push.

This time too the city might surface from the foreclosure crisis. There are indications that the number of house owned by the banks is decreasing. In Southern California about 41% of the houses that went up for sale in July were repossessed by the banks. It indicates that buyers are snapping up bank discount deals.

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Cody said that when the people moved out of the foreclosed houses they left behind a pile of mess. On the front patio there were box springs, a forgotten office chair on the lawn and broken light fixtures. Even the trees were not spared with decorations of trash and the gardens were covered with stale stinking garbage. Repeated such experiences made Cody team up with her neighbours in an attempt to clean up the rubbish themselves. Travis Aitken was a co-sufferer with Cody. He said that the neighbours would go and clear the garbage, pluck the weeds and chop down whatever they could. The weed had grown 4’ in at least one foreclosed abandoned house

The City of Phoenix’s Neighborhood Services Departments are concerned with these fallouts from foreclosures. Stacking of rubbish in front of the house and overgrown gardens go against the rules of the municipality. The snag is that the department cannot take action and send an inspector until and unless someone complains. When the inspector sees any violation of code then the complaint will be sent to the owner of the house. The latter would be given a short two weeks to mend matters. If they failed then fines would be slapped on them ranging from $200 to $20,000. The penalty depends on the seriousness of the code violation. The same rule applies to bank owned properties.

Cody is also seeking the help of her Home Owner’s Association (HOAA). This is because she contributes $42 per month to it. ABC tried but failed to get in touch with HOA regarding the problem of 16 Roeser Place. Cody is especially concerned because of the children that live here. There are quite a number of them. She wants them to grow up in a nice clean environment that is safe. Cody bemoans that many of the houses are empty and few people are moving in. The neglected yards and garden are getting out of control. It is infecting everyone. People are avoiding taking walks so as not to be confronted with such signs of decay and rot.

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In recent years the number of foreclosed units has more than doubled according to the local branch of ABC. Half of these foreclosures focus on landlords as well as on investors. This is having a negative impact on those Chicago residents who are tenants. When the landlord loses the house to foreclosure, the hapless renter has to move out. This more often than not leads to loss of security deposits and the uprooting of children from schools and familiar surroundings. Pets too badly suffer.

Justin Kling says that the landlords too are one of the worst victims of foreclosure. He is one of the founders of Chicago’s premiere apartment locating service. His argument is that many landlords are facing foreclosures because the tenants are not paying rent regularly. Moreover it has not been possible to evict these defaulting renters. For the landlords one lapse in mortgage payment will bring the wolf of foreclosure to the door.

Apartment Savvy interacts positively with many Chicago landlords and managers of property. It pitches forward to bring about a harmonious working relationship between the landlords and tenants. The method is pre-screening prospective tenants and then bonding firm ties with the landlords so as to skirt unpleasant situations – that invariably wind up with foreclosures being the winners. Apartment Savvy has its own website - www.apartmentsavvy.com.

Apartment Savvy of Chicago was founded in 2004. It has its headquarter in North Clark. Without incurring any cost the tenants can avail of their services to find accommodation suitable for them. It is a stress-free search for the customer.

With foreclosures knocking at every door, sparing none, each organization has its mite to offer to check the foreclosure tide. Apartment Savvy understands the plight of the landlord facing foreclosure. If rents are not paid how will the landlord battle foreclosure? On the other hand there are landlords who dupe people into tenancy without letting out that the house is foreclosed or about to be. Some pose as landlords in vacant houses, pocket the security money and two months rent before vanishing into thin air.

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The ForeclosuresWl.com showed nearly 14,300 foreclosure filings this year in Wisconsin. Robert Jenson, President of ForeclosuresWl.com said the number of foreclosure had been built up over the past three years. He further stated that Wisconsin on an average registered 11,687 foreclosure filings each year from 2003 to 2005 which went up to 16,473 in 2006 and 20,995 in 2007.If the pace of the foreclosure filings remained the same the state would end up at 25,000 foreclosure filings at the end of the year. Jenson anticipated little respite in the soaring foreclosure rates in 2008 and expected real estate market trends to improve only after 2010.

Milwaukee County continued to post the highest number of foreclosure filings in the state with 3,565 foreclosure filings in July 2008 alone, marking an increase of 28% over the figures of July 2007. Dane County foreclosures increased 54% and in July alone, 710 foreclosures had been filed in the county.

The blitz of foreclosure filings wreaked havoc throughout south central Wisconsin during the month of July 2008. An 89% rise was found in Sauk County with 198 filings compared to 105 during the same period last year; Jefferson County recorded 71% more than last year with 185 foreclosure filings this year compared to 108 last year; Columbia County filed for 183 foreclosure this year while it was 128 in 2007, an increase by 43%; Green County filed 91 foreclosure to 67foreclosure filings last year and Dodge County had 236foreclosure filings during this year compared to 174 filings of last year. Both the Counties foreclosure filings had increased by 36%. Rock County foreclosure filings were up by 27% with 501 cases of foreclosure filings this year and 395 foreclosures filed last year.

Jenson remarked that the mortgage crisis related to the adjustable-rate and the sub-prime lending policy was mainly responsible for the up swing in foreclosure filing trend.

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From this drama few lessons can be learnt. The failure of the bank highlights the fact that foreclosures hurt everyone – not merely the borrowers. Similarly helping to stall it benefits all and not merely those who had no share in stoking the fires of the housing boom. Many customers who lost on deposits that were not insured did so not because of their own faults but because of a national foreclosure crisis that slipped out of control.

The foreclosure crisis has cut into government budgets at all levels. The cities as well as the counties and states are desperately looking for ways and means to raise funds. By stopping further foreclosures the economy will get a chance to stabilize and more bank failures will be averted. Thus the fate of the man next door is linked with the fate of all.

The failure of IndyMac gives out a warning to lenders that they must change with the times and modify loans speedily if they do not want to face a similar fate. Sheila Bair, chairperson of FDIC repeatedly stressed that a modified loan is worth much more than a foreclosed one. But not all lenders are waking up to the warning signals.

IndyMac primarily failed because it could not get capital although it badly needed the same. Loans had been given to people with questionable credit scores and no income proof. When such borrowers failed to meet mortgage dues, the bank ran out of funds. This would not have happened if IndyMac had not forged ahead with foreclosures but worked out realistic loan modification schemes with the borrowers. This is exactly what FDIC is now doing. The bank will now be assured of a steady stream of income through modifications and short sales. In the wake of the housing bill passed by the Congress this lesson is invaluable. The bill relies on the voluntary efforts of the lenders for it to be successful.

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Shery Sellars is one of the many ready to bid for a good house to build a home in. That’s right – Shery is not interested in buying and selling but wants to set up a home in a house. Here eyes are on a house on Tall Tree Road. Brookfield is the right locality for her because it is close to the house of her parents. Shery is a single mother struggling with two children – a teenager and and a toddler. The elder daughter and parents came with her to the foreclosure auction. Shery is anxious to get out of her rented quarters. She had inspected the house of her choice. Although it was small with a shabby exterior it looked structurally sound.

Mark Bennett is another regular participant at Tuesday foreclosure auctions hanging around from 10 am to 4 pm. There was no surety about when the house of choice would come up on the rolls. Participants dare not take even a lunch break. Both Sellars and Bennet feel that the style of bidding at the court auctions could be improved upon. The major complaint was that the property was sold in the courthouse entailing people to stand outside in the searing heat. The foreclosure auction is literally held on the steps of the courthouse! The scene is chaotic with nobody to give proper guidance. Everything is by word of mouth.

Gwen Pate is the clerk in the county office. She says that people repeatedly ask for information but she too is in the dark. She says, “I don’t have information to give them.”

After a long hot wait of three hours the foreclosed property that Sellar’s was interested in came up for bidding. First the legal description of the property was read out and then the it was announced that the bidding was to start from $66,020.18. Sellars became hesitant and confused. She was not prepared for this big a sum. Her father came forward bidding one penny more than the announced figure. But the lawyer said, “the lender has authorized me to enter a competitive bid of $82,526.” That was the end of the matter.

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It seemed that the foreclosure devil was walking the land. Undoubtedly, the Americans were experiencing the worst-ever housing crisis since the Great Depression, where millions were abandoning their homes due to foreclosure and the numbers were likely to grow if no step was taken to halt the foreclosure march. The rising foreclosure rate, stunting housing prices and eroding the quality of life of the people adversely affected the surrounding neighborhood.

The lending pattern was a pre-conceived net whereby prospective borrowers were lured by unscrupulous mortgage companies into accepting adjustable-rate mortgage loans that reset itself after the introductory offer period was over. The borrowers mainly belonged to the low-income or middle-income group who were unable to reset their earnings with the increase in interest rate and defaulted on their payments.

The scenario was definitely agonizing for families who have no other option but face foreclosure filings. It was optimistic to think that if prices of houses began to rise then there was a possibility that borrowers would avail of a refinance on their mortgage to get a new ‘teaser’ rate and heave a sigh of relief for another year or two.

Despairingly, the prices of houses were on a downhill trend, blocking the way of refinance and conversely, for house owners, to make payments at unaffordable high rates of interest. Already in harness with the foreclosure issue the house owners had to deal with another offshoot of foreclosure -the negative equity, which meant that the market value of their property was less than the value of their mortgage. Adding worries to woes were the inflation and unemployment problems that held the foreclosure crisis in a vicious circle.

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Compliance Technologies that is a consultancy firm dealing with lending industry, scrutinized about 1.9 million sub-prime loans that started in 2006. That year witnessed the height of sub-prime activity. According to its findings approximately 56% of the sub-prime loans went to non-Hispanic Whites. The borrowers were affluent with an annual income much higher than those of their neighbours. They took 39% of the loans that ended up in the tragedy of foreclosures. It was a surprising conclusion commented Maurice Jourdain-Earl of Compliance Technologies.

Nevertheless the non-Hispanic Whites and the Afro-Americans took the lion’s share of the loans. In 2006 the Whites made up 71% of the borrowers and of these 56% contracted sub-prime loans in that year. The Blacks took 10% of the total loans but took 19% of the sub-prime category. The Hispanics took 14% of the loans but they took 20% of the sub-prime loans.

A hot debate rages about the reason for these discrepancies. Some of the lenders argued that the minorities were less credit worthy than their White counterparts. Those advocating for the minorities accused the lenders and their henchmen of targeting the people on racial basis. Jourdain-Earl did not comment on this issue. A minority owns his company.

Specialists are at a loss as to how all the demographic groups kept pace with the sub-prime loans that ended in foreclosures. Lenders have all the facts and figures but they are reluctant to come out in the open with these. There is no doubt that the sub-prime loan rates were higher by three points than the prime loans and these were peddled to the non-white weaker sections. With such concentrations it is inevitable that these pockets will fare worse than the predominantly White neighbourhoods.

As yet the results are a mixture. Minority areas like Nassau County have seen foreclosures skyrocket although other similar places like Harlem has remained fairly steady. According to RealtyTrac during the first six months of this year foreclosure postings are only slightly higher than what it was in the previous year. Debbie Gruenstein Bocean of Centre for Responsible Lending said, “The sub-prime crisis is not limited to the poor and non-white.” But she added that it is going to be tougher for them to manage when foreclosures strike.

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Hedge funds and their partners aim to make gains from the troubles of banks and others who have invested in mortgages that have turned into worthless houses. The value of houses continues to sink further while Hedge fund groups gloat as they scent blood. They operate by purchasing from those banks in Wall Street who have invested unwisely and are now desperate to divest themselves of these mortgage loads weighing them down. One such company is Merrill Lynch. It said this week that it would sell to Lone Star Funds mortgage-linked investments that were once valued $30.6 billion for a mere $6.7 billion. Lone Star Funds is one of the many firms dealing in distressed investments in Dallas.

Lending industry executives of Wall Street is operating the hedge funds. They claim that they can out perform the banks and other investors in modifying mortgages by giving new affordable contracts to the consumers. Jacob Benaroya of Biltmore Capital Group of New Jersey was upbeat in his statement that they are much better “to deal with than a bank”. This group is purchasing $100 million of mortgage related debt per year. Benaroya added, “We’ve bought (the loan) at enough of a discount that we can make special arrangements with the borrower.”

Some of the hedge fund operators acknowledge they have often bought some real troublesome loans. These are so bad that often two thirds or a half cannot be saved. In that case they have acquired the right to sell off the houses or they allow the former owner to turn over the keys of the house in return for overlooking all outstanding mortgage dues. This is what happened to Edelmira Sayo of northern California. Financial trouble had made her turn over her property to a firm, G8 Capital. The investor had cut the loan by $50,000 but even then she failed to meet the requirements for a new loan because the property value had fallen by about $100,000.

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