Reverend Jesse Jackson, a civil-rights activist and former presidential candidate, has called on churchgoers at the Friendship Baptist Church to help trim down foreclosure house listings by opposing predatory lending.

He urged them to join a national campaign to challenge banks and their lending practices which he called predatory and greedy. He called on people at the Friendship Baptist in Winston-Salem, North Carolina to join in the national initiative that aims to make changes on the banking systems and push for the renegotiation of bank loan terms.

According to industry experts, the increase in foreclosure house listings started due to the collapse of subprime lending. They also cited some studies that showed that banks have disregarded some of their lending rules and provided loans to people with questionable credit background.

Experts said that the collapse in the subprime lending led to the crisis in the financial system. Some are questioning the decision of the federal government to bailout the banks which they believed contributed to the current foreclosure crisis.

Meanwhile, Friendship Baptist Church pastor Reverend Stacey Frazier explained that he requested Jackson to give a speech before his congregation. He said that many members of the congregation lost their homes to foreclosure and with the unemployment rate increasing rapidly, many more are expected to go into foreclosures in the coming months.

Frazier said that he hopes Jackson would be able to challenge and motivate his congregation to allow them to recover from the impact of the economic and foreclosure crisis.

Recent market data showed that the number of foreclosure properties in North Carolina drop by 38 percent in the first six months of this year. However, the good news brought about by the significant decline in foreclosure rate was offset by the drastic rise in foreclosure activity last June.

June foreclosure rate rose by 23 percent compared with May figures. This brought the total number of foreclosure homes in the state to 3.175. On the other hand, a drop of 26 percent was posted for the first half compared with the last six months of 2008.

Industry experts said that the rise in the number of foreclosure house listings due to unemployment is prevalent not just in North Carolina but also across the country. And more foreclosures are expected as long as the unemployment problem remains unsolved.

It seems that loan modification is turning out to be a popular method of curtailing foreclosure home listing in Saint Louis, Missouri.

Recent market data showed that so far, about 5,000 residential homes have been foreclosed by mortgage lenders and banks in 2009. However, a significant number of borrowers were able to save their properties by convincing their lenders to reduce their monthly mortgage payments into affordable rates.

Industry experts said that loan modification is becoming popular and lenient in the Saint Louis region. But they cautioned that the process still continues to frustrate many borrowers, with a great number of them being rejected and ending in foreclosure.

Most homeowners would say that their problems started when they lost their jobs. However, given no choice, many of these homeowners would take another job that pays $1,500 a month, a considerable reduction from their previous salaries. Some homeowners would find their properties are worth less than their total mortgage and so would walk away from their properties and leave it for banks to place them on foreclosure home listing.

A typical loan modification process involves reducing the monthly payment to affordable rates. In Saint Louis, loan modifications are becoming common due to the Home Affordable Modification Program (HAMP) of the Obama Administration.

The program provides counseling to distressed homeowners as well as financial incentives to mortgage lenders. So far, about 500,000 were in the trial modification process. Normally, homeowners would have their payments reduced during the trial period, which is three months. The banks would then agree to lower monthly mortgage payments and interest rates for at least 5 years.

In some cases, borrowers would be required to give three regular monthly payments before the rates could be lowered. Some interest rates are reduced by about 2 percent.

Since June to September, the number of people who participated in the loan modification program has reached 100,000 every month. However, in September, homeowners who availed of the program accounted for 16 percent of the total number of delinquent mortgages.

Industry experts said that there are indications that loan modifications has greatly help the city of Saint Louis trim down the number of properties on foreclosure home listing.

The way Philadelphia foreclosure listings are being contained by the city and state governments is being studied by the Obama administration for its plan of further improving its foreclosure prevention program.

Federal officials are considering using part of the $50 billion allotted for the loan modification program to help jobless homeowners keep their homes.

Elizabeth Warren, chairperson of the Congressional Oversight Panel which oversees the Troubled Asset Relief Program, has been asking the Treasury Department to examine the use of some TARP funds to provide bridge loans to homeowners who have been laid off in recent months. She suggested also that the program does not charge interest until the homeowners get another job.

COP member Richard Neiman explained that recent foreclosures are no longer caused by subprime or other types of risky home loans, but by unemployment. He added that the rising number of prime mortgages getting foreclosed is an indication of the worsening impact of unemployment.

In September, job losses increased to 9.8 percent, pushing up the national unemployment rate to 9.8 percent, a 26-year record high. Since December 2007, a total of 7.2 million workers have been laid off and the jobless rate has doubled.

Administration officials have been looking at the program that has been effectively containing Philadelphia foreclosure listings and other listings throughout Pennsylvania under the state Homeowners Emergency Mortgage Assistance Program.

HEMAP was established by Pennsylvania state officials in 1984 to help jobless homeowners survive while they look for jobs. The unemployed homeowners who qualify under the program are given loans with a term of two or three years, depending on the economic conditions and the financial situations of the homeowners. The borrowers are not required to pay the loans until they get their next jobs and earn enough that enables them to pay their monthly home loan payments and utility bills.

John Dodds, head of the Philadelphia Unemployment Project, said that helping the unemployed while they look for work prevents unnecessary foreclosures that cause neighborhood deterioration.

According to reports, several officials of the U.S. Housing and Urban Development Department have met with state officials of Pennsylvania and discussed the HEMAP and its viability as a nationwide program.

In addition, officers of the Philadelphia Legal Assistance Center explained that the HEMAP program is provided only to qualified unemployed, such as persons who have been laid off recently and who are likely to find another job.

The Lee County and the Florida cities of Fort Myers and Cape Coral are expected to purchase properties on bank foreclosed home listings for rehabilitation. Already, a number of contractors are competing for a chance to renovate foreclosed homes in these counties. The initiative also means more job opportunities in the area.

Industry experts said that over 200 foreclosure houses are projected to be acquired by Lee County and the cities of Cape Coral and Fort Myers under the Neighborhood Stabilization Program which was launched by the Obama Administration to help neighborhoods hardest hit by the foreclosure problem.

So far, over 50 contractors are bidding for a chance to rehabilitate the foreclosure homes that the county and cities will acquire.

Under the program, Lee County received about $18 million for the buy and fix program. It then awarded about $4.2 million to allow Fort Myers Housing Authority to purchase and renovate foreclosure houses which will be rented later to low income families at affordable rates.

The remaining amount will be used by Lee County to purchase and renovate 150 additional foreclosure properties. The renovated homes will then be sold to low-income and moderate-income families.

So far, renovation for two houses has been completed while a third is nearing completion. A fourth property is under renovation by Tarpon Bay Construction. Brent Schepp of Tarpon Bay said that no one will get rich doing the county’s renovation projects because there is a very tight competition. He added that all they could expect is to break even on the initiative.

Schepp said that what is important is for their people to have work and to help the company’s subcontractors and suppliers.
The fourth house in Lehigh Acres needs extensive work, including a new siding, roof and plumbing, according to Schepp.

On the other hand, the Cape Coral initiative has a budget of $7.1 million. The city will start purchasing houses in coordination with the Cape Coral Housing Development Corp. City officials are targeting about 44 distressed properties that need renovation and additional 20 units that are ready to be occupied.

Under the guidelines for the program, the Housing Development Corp. will handle the selling of the renovated houses to four-member families with annual income of not more than $72,840.

City officials are hoping that the program would be able to help a lot of people who failed to qualify for other home assistance initiatives.

A report by the State Foreclosure Prevention Working Group of the Conference of State Bank Supervisors indicated that about 80 percent of troubled borrowers were not availing of loan modification programs being offered through lenders to stem the tide of distressed properties on lists of bank foreclosures.

This prompted the state governments of Connecticut and New Jersey to launch programs that motivate troubled borrowers to save their properties from lists of bank foreclosures. Both programs require lenders to meet with court-appointed mediators and distressed homeowners. New York has a separate program to help borrowers of subprime loans.

Roberta Palmer, who handles the Foreclosure Mediation Program in Connecticut, said that so far, the program is working fairly well because it requires both parties involved to negotiate in the presence of court-appointed mediators who are knowledgeable about different programs available to help borrowers save their properties from foreclosures.

In New Jersey, about 614 troubled homeowners qualified for mortgage mediation in May. And out of the total 614, 223 were able to settle and save their homes from lists of bank foreclosures, according to Eric R. May, director at the New Jersey Department of the Public Advocate’s Office of Dispute Settlement.

Under the program, troubled borrowers in both states received foreclosure notices as well as letters sent by the judicial branch telling them that they may be eligible for free mediation. They are requested to call several toll-free numbers to ask how they may qualify. Both state programs apply only to distressed primary residences.

In New Jersey, borrowers who qualified for assistance are assigned counselors who have been approved by the U.S. Department of Housing and Urban Development. These housing counselors have been trained in helping homeowners in mediation programs. Housing counselors will be the one to evaluate and determine the amount of mortgage that borrowers could afford.

Meanwhile, in Connecticut, financial counselors will handle borrowers after lenders and mediators have met and discuss the case. The counselor will then send recommendations to lenders on how best to modify troubled loans or what other solutions could be adopted.
Industry experts said that Connecticut’s court program forces all parties involved to mediate on a specified date to save properties from lists of bank foreclosures.

Foreclosures homes are everywhere in Philadelphia, Pennsylvania It has wreaked havoc on lives of both rich and poor people. This trend prompted several community groups to step up and intensify their efforts to identify struggling homeowners before they abandon or lose their homes to foreclosures.

Some members of these groups are going around neighborhoods hardest hit by the foreclosure crisis, trying to identify distressed homeowners who are in danger of turning their properties into foreclosures homes.

In West Oak Lane, efforts are ongoing to revive the neighborhood which is severely affected by the foreclosure and unemployment problems. The Ogontz Avenue Revitalization Corp. is seeking to purchase foreclosure homes and make them ready for occupancy to help stabilize property value in the neighborhood.

However, instead of waiting for distressed homeowners to come forward and seek its help, the organization send out some of its staff to go around the neighborhood and search for families in need of help.

Another nonprofit group, Boston Community Capital, is purchasing foreclosures homes from lenders and banks and reselling them to homeowners at reduced prices and under modified loan terms. Boston Community Chief Executive Officer Elyse Cherry said that the goal of the group is to try to stabilize neighborhoods by keeping foreclosed properties occupied and productive.

In West Oak Lane, 1,500 homes are in some form of foreclosure. The area has a total of 20,000 homes and most of its residents are less educated and those who are employed depend on overtime or hourly wages for survival. Furthermore, 60 percent of residents in the neighborhood are earning less than 60,000 annually.

The metro Philadelphia area posted an unemployment rate increase of 8.2 percent in May from 4.9 percent the previous year.

Meanwhile, Ogontz Avenue revitalization Corp. Chief Executive Officer Jack Kitchen said that the economic downturn could force more people to bail out, leaving communities and neighborhoods with abandoned foreclosures homes that attract crime.

Ogontz Avenue Revitalization started buying and rehabilitating distressed properties in 1999. Since it started, the organization was able to reduce the number of abandoned foreclosures homes from 350 to the current 70. The effort has helped raised values of surrounding properties.

Billions of dollars more would become available for the Obama administration’s foreclosed housing prevention program if lawmakers allocate a portion of what was left in the $700-billion financial industry bailout program enacted by the U.S. Congress in 2008 to the program.

The Treasury Department has not been allocating what was left from the Troubled Asset Relief Program because it wanted to have ready funding in case it needs it for some emergency actions.

Some in the U.S. Congress, like New Hampshire Senator Judd Gregg and Alabama Representative Spencer Bachus, wanted the money to be spent to reduce the national debt.

But liberal Democrats like Massachusetts Representative Barney Frank, chairperson of the House Financial Services Committee, insisted that a portion of what was left should be used to enhance the Obama administration’s foreclosed housing prevention program.

At a congressional hearing this week, Representative Frank explained that the federal foreclosed housing prevention program should be strengthened to contain the expected wave of foreclosure caused by growing joblessness.

Politicians contend that debates about what should be done with the rest of the TARP money will become intense in the coming months as the fate of TARP will be decided by Congress soon.

TARP is scheduled to end in December this year, but Treasury Secretary Timothy Geithner has the option to extend it to the third quarter of next year.

The TARP funding was approved in record time last year under the Bush administration to prevent total economic collapse as financial institutions lost billions in the foreclosed housing crisis.

According to government data, most of the major banks bailed out by TARP have already repaid $70 billion of what was lent to them and have stated that their finances are already stabilized and that they can continue operating without federal assistance.

Meanwhile, the Government Accountability Office has stated that the Treasury has around $328 billion left that has not been allocated or spent. GAO estimated that $339 billion has been disbursed and that $102 billion has been allocated but not yet disbursed. The remaining balance has been increased by the $70 billion repaid by the bailed out lenders.

However, Treasury Secretary Geithner said it has already made plans for a portion of the money and estimated that only about $127 billion has not been allocated. He also insisted that he wants to keep what will be left of the TARP money to give him flexibility in stabilizing the economy and accelerating economic growth.

Many Democrats hope some of Geithner’s plans include providing additional funds to strengthen the federal foreclosed housing prevention program.

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Mississippi local governments, nonprofits, businesses and organizations, including the Vicksburg Housing Authority, will be able to receive about $35 million to buy properties on repo list to be demolished or refurbished and sell.

The $35 million funds are part of the $1.93 billion money made available by the U.S. Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program 2.

Warren County supervisors and director of housing programs in Vicksburg Beatrice Moore held a meeting to discuss a public notice about the inclusion of the county on the program. The public notice was received following Mayor Paul Winfield’s promotion of the plan to District 5 Supervisor Richard George and County Administrator John Smith.

The program requires a three-year plan to use the federal money to transfer properties on repo list to new owners. Moore said that the local government needs to spend the money immediately, adding that job creation in rehabilitation work is a top priority.

Under the program, all vacant and residential properties on repo list would be redeveloped, sold or rented. Moore explained that eligible families or individuals can receive as much as $40,000 to be used for down payment or to pay closing costs.

For Warren County, participation costs would involve fees amounting to 10 percent of the total grant or about $3.5 million to any agency awarded with administrative role. Some contacts for the program included Habitat for Humanity’s Abraham Green and Women’s Restoration Shelter’s Tina Hayward, according to Moore.

Board Attorney Randy Sherard explained that under the multi-entity agreement, it is important to find legal ways to tie up the housing authority, organizations and businesses under an interlocal agreement. He added that an interlocal agreement normally involves public entities to perform a public service.

The current program extends the income limits to homebuyers earning 120 percent of the median income in the area. This gives an opportunity to many first-time homebuyers to qualify for the program.

The income limit for individuals is $43,850 and for a family with four members, $62,650. To determine if a local government is eligible for the federal fund, the HUD uses a formula that is based on estimates on vacancies and number of properties on repo list in a given county.

The program requires a foreclosure score of 18, and Warren County posted an 18.18 average score.

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President Barack Obama has signed into law two housing measures aimed at helping distressed homeowners avoid placing their properties on repo home listings. The two laws are not expected to totally eradicate the foreclosure problem but they may contain the growing repo home listings and put a block on fraudulent foreclosure prevention schemes.

The Fraud Enforcement and Recovery Act and Helping Families Save Their Homes Act are part of the Obama Administration’s efforts to stem the flood of foreclosed homes across the country.

Obama said that the legislation will protect hardworking homeowners, crack down on unscrupulous people who will take advantage of troubled borrowers and ensure that the foreclosure problem will never threaten the real estate market again.

The Helping Families Save Their Homes Act integrates the Hope for Homeowners initiative into the Making Home Affordable program. This expanded program offers housing assistance such as refinancing and loan modifications to help distressed homeowners avoid repo homes listings.

The law offers modifications to federal guaranteed farm and rural home loans and Federal Housing Administration (FHA) loans. It also provides comprehensive protection to tenants of foreclosed properties, gives homeowners the right to know the holder of their mortgage, offers resources to homeless and consolidates homelessness programs to make them efficient in providing assistance to troubled families with children.

On the other hand, the Fraud Enforcement and Recovery Act is designed to clamp down on bogus mortgage and foreclosure prevention schemes following the reported 300 percent rise in fraudulent activities.

The law extends federal criminal statutes on bank fraud. Over 50 percent of subprime loans were originated by mortgage lenders not currently insured or regulated by federal law. The law provides fraud enforcement coverage on private mortgage companies and brokers.

Additionally, the law extends mortgage lending manipulation prohibition to private operations and enhances funding for enforcement efforts, including the allocation of $165 million in the next two years to hire prosecutors and investigators to handle fraudulent mortgage and repo home listings prevention cases.

Furthermore, the law strengthens federal enforcement and regulatory capacity by allocating $140 million to the Federal Bureau of Investigation (FBI), $30 million each to the U.S. Postal Inspection Service and the Department of Housing and Urban Development’s Inspector General, $21 million to the Securities and Exchange Commission and $20 million to the Secret Service.

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States and cities are just starting to spend the millions they received from the federal Neighborhood Stabilization Program to buy repossessed houses for sale, rehabilitate them and then sell them to lower-income families.

Nearly $6 billion in NSP funds were allocated by the federal government to states and cities to help cut down repossessed houses for sale, help save deteriorating communities and help renters and lower-income families acquire their first homes.

In August last year, the amount of $3.92 billion to fund the NSP was approved by Congress as one of the provisions of the U.S. Housing and Economic Recovery Act.

Congress required that the funding must be used in neighborhoods with the highest number of borrowers with subprime loans and biggest number of foreclosures. State and city governments were also ordered to ensure that all buyers of fixed foreclosure houses were earning only 120 percent or less of the median household income in their areas.

Also, the repossessed houses for sale should be used by the buyers as their primary residences.

Since the NSP provided only general guidelines for the use of the money, state officials have crafted different plans to suit the needs of their constituents.

Arizona, which got $121 million, will spend the money to buy, repair and sell foreclosures homes at big discounts to lower-income families.

Wisconsin will use its allocation to subsidize the home loans of qualified applicants buying repossessed houses for sale. Qualified homebuyers can use the subsidy for the down payment, closing costs or repair costs.

The city of Charleston in South Carolina made an easier approach. It hired the nonprofit Lowcountry Housing Trust to use the NSP money to buy around 70 repossessed houses for sale and then operate about 60 units for rental and sell the rest to qualified families.

The NSP program of Las Vegas has three schemes: homebuyer assistance, lease-to-own, and rental housing. The first scheme will help qualified home buyers with the down payment, closing costs and repairs. The second scheme will enable low-income families to rent a house in a rent-to-own deal while the third scheme involves the purchase of foreclosed houses and condos to be offered as affordable rental housing.

In some cities where many repossessed houses for sale have been abandoned, the NSP money will be spent to demolish them and then prepare the land for further development.