Foreclosures list prices and sales pulled down the average home sales price in Grand Rapids, Michigan in September, based on data from the Grand Rapids Association of Realtors.

The average home sales price in Grand Rapids this September dropped by 6 percent from September last year to $109,191.

The drop in home prices contributed to the increase in house sales in September in the area, pushing up sales by a record 37 percent and marking the eighth time monthly sales surpassed corresponding monthly sales in 2008.

Greg Carlson, head of the realtor association, said the increase in home sales and the corresponding drop in housing inventory indicate a positive development in Grand Rapids. But he said he is still cautious because of uncertainties in many factors affecting the market.

He cited the adverse impact of the expiration of the $8,000 federal tax credit for first time home buyers in November, which has been contributing to the increase in home sales.

He also mentioned the temporary effects of the 90-day foreclosure moratorium implemented by the state in July. He contended that the moratorium may be only delaying the entry of distressed homes into foreclosures list.

According to Carlson, there were about 1,100 foreclosure properties available for sale at any one time in the past months, but after the foreclosure moratorium was implemented, there were only about 500 foreclosure homes on the market. After the end of the moratorium, Carlson speculated about the return of large numbers of foreclosures to the market.

Other realtors however are convinced that the bottom of the housing market in Grand Rapids has been reached. They said that the list of properties priced under $20,000 in the past months numbered about 200 and occupied three pages at any one time, but now, they said, these types of low-priced properties occupy only three-fourths of a page.

Nationwide, several indicators also have been showing signs of the start of housing market recovery. In August, construction spending climbed up unexpectedly by a record rate — the sharpest rise in the housing construction sector in almost 16 years.

In August, home price declines nationwide also slowed, as shown in the Standard & Poor’s/Case-Shiller Home Price Index that monitors home price movements in 20 major U.S. cities.

In addition, the National Association of Realtors also reported an increase in pending home sales in August for the seventh consecutive month, including pending sales from foreclosures list inventories.

As mortgage lenders accumulate losses from foreclosure listings and as they implement stricter processes and more requirements for loan applicants, incidents of loan fraud have started to increase.

According to LexisNexis Service’s Mortgage Asset Research Institute (MARI), the number of mortgage fraud incidents has risen to record levels in the first months of 2009. As more and more lenders are limiting their mortgage loan approvals because of their apprehensions about foreclosure listings, incidents of loan fraud soared in 2008 by 26 percent from fraud figures in 2007.

Denise James, director for residential mortgage solutions at LexisNexis, said the large numbers of foreclosure listings, the reduced number of approved loans and the economic downturn have been forcing more and more people to commit loan fraud.

MARI’s data showed that Rhode Island had the highest mortgage fraud rate in the first months of 2009. For the first time in years, Rhode Island entered the top ten ranking in number of fraud compared to number of loan originations in the state.

Meanwhile, Florida, the second state with the highest rate of foreclosure listings in 2008 and in January 2009, has posted the second highest rate of loan fraud in the first months of 2009. In 2007 and in 2008, it led fraud rankings, now led by Rhode Island.

James of MARI said that in 2008, the most dominant type of home loan fraud was application form fraud. Around 61 percent of recorded frauds in 2008 involved the use of fraudulent information on application forms.

The second most frequent type was the use of fraudulent financial statements and tax returns. This type represented 28 percent of all frauds in 2008. The third was inflation of property appraisal. The other fraud types include misrepresentation of information on deposit, employment and credit documents.

James also said fraud incidents related to foreclosure listings are increasing. Scammers and swindlers are enticing distressed homeowners with offers of loan modifications that never happen. Some cons even persuade borrowers to give them their deeds to the property so they could modify their loans faster.

Furthermore, fraud incidents involving older and immigrant homeowners are increasing. Scammers take on the identities of immigrant and elderly renters and then apply for mortgage loans. They pay for just a few months and then live in the properties rent-free after the homes are added to foreclosure listings.

According to the Mortgage Banker’s Association, their mortgage applications index has plunged by 23 percent, from 591.4 to 455.4 during the week that ended September 26.

With the collapse of Wall Street and subsequent chaos in the finance and banking industries, it has become more and more difficult for home buyers to get approved for mortgage loans. To make matters worse, the rising foreclosure rate has made lenders cautious and forced them to tighten their lending guidelines.

Last month, the government decided to take control over Fannie Mae and Freddie Mac in an effort to address the problems in the housing and mortgage industries. The said rescue plan involves injecting these institutions with about $100 billion each to make sure that they stay afloat in the midst of the credit crisis.

Still, the overall condition of the housing industry remains to be unstable. Refinance index also fell by 34.7 percent compared to the previous week while purchase index dropped by 10.9 percent. On the average, the interest rate for a 30-year fixed rate mortgage loan slipped slightly by 0.01 percent.

Nationwide, home prices continue to decline and inventory of homes – both new and existing – has grown considerably. Although the implementation of the $300 billion housing rescue program started last October 1, many analysts are not sure if it would be enough to save the millions of lenders and distressed homeowners who are struggling with bankruptcy and foreclosure.

Even buyers, who would have passed the strict lending guidelines, have decided to step away from the market until such time that they are sure that their money will be safe and that their decision to invest in real estate properties will be a sound one. Some of the buyers are checking out foreclosure homes for sale in order to minimize the risks since these repossessed properties are sold at a relatively-cheaper price.

For now, there is no indication whether the market will soon bottom out and if the government efforts will yield positive results. For certain, it will be a waiting game for everyone.

With the housing industry still trying to recover from the losses suffered because of the mess in the subprime market, it is indeed surprising that the government-sponsored enterprise Fannie Mae has announced that it is making an effort to boost finances. Unfortunately, this effort comes with a high price for consumers.

Because of the $2.3 billion loss incurred, Fannie will have to change mortgage pricing and liquidity. The federal enterprise actually plays an important role in the mortgage industry. Fannie Mae usually purchases home loans, secures them and sells them once again to investors.

Adjustments that the public can expect include charging a higher risk premium in the purchase of loans in a declining market, stopping the purchase of high risk loans and increasing certain fees. These changes will certainly have an impact on mortgage credit costs and availability.

For the National Association of Realtors, the actions taken by Fannie Mae could mean the loss of many potential buyers who will be turned off by the additional fees. To make matters worse, Freddie Mac is also considering the same measures in order to cover their losses as well.

The ones who will be hit hardest by the added fees will be first time home buyers who have been standing on the sideline for so long, hoping that market conditions will allow them to purchase an affordable home. If the number of first time buyers entering the market will decline, it could signal another fresh wave of decline in home sales activity.

Sellers, on the other hand, will also be adversely affected by these measures especially since market competition is already tough. With a reduction in the number of potential buyers, home prices may decline even further.

Measures taken by Fannie Mae is considered to be necessary since it has to satisfy its shareholders, maintain profitability and avoid a situation where the government will have to rescue them.

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If you have managed to escape the subprime mortgage mess, it should not mean that you will let down your defenses. One of the ways you can easily avoid losing your home to foreclosure is by organizing your finances early on.

Unfortunately, most Americans ignore the warning signs of an impending financial disaster. According to the National Foundation for Credit Counseling, most consumers commit this mistake and end up in a financial mess. Here are some signs that you should take a look at the way you handle your finances before it is too late.

1. You pay only the minimum amount due on your credit card bills.
2. Your debts increase every month.
3. Arguments about money erupt at home.
4. Hiding purchases from your spouse.
5. Charging for items you used to pay in cash.
6. Most of your credit cards are almost maxed out and you are looking to apply for more credit.
7. You have no idea how much you really woe your creditors.
8. Payments are late or missed.
9. You have no savings.
10. You are consumed with your debt problems.
11. Your work and family life is already being affected by your debt troubles.
12. Collectors are calling you non-stop.
13. You have tapped you retirement accounts.
14. If you lose your job, you will be in financial crisis.
15. You use balance transfer to manage your debt.

If you are experiencing half of the signs above, you should immediately try to consult a credit counselor because you might be heading for financial trouble. Keep in mind that you will have to make sacrifices in order to get back on your feet again. It will certainly be challenging but considering the alternative, you should really work hard to regain your financial footing.

Sometimes, homeowners will simply have to accept the fact that they have over-extended themselves and can no longer afford to stay in their homes. But this does not mean that they should simply wait until the foreclosure notices arrive. A foreclosure can still be avoided by deciding to sell the property.

If you are considering this option, you should know that this foreclosure alternative is perfect for homeowners who still have equity on their homes that is sufficient enough to pay the mortgage debt. With the millions of homes for sale in the market including repossessed houses, it is understandable that you will have a difficult time selling your home. In this case, a quick sale is recommended.

For the entire sales process to go smoothly, most experts would advise owners to get a broker. This way, your chances of selling your home before the reinstatement period is over are bigger. You should be very particular about the broker that you will hire. Knowledge about the area and local market conditions is important as well as experience in the field. Of course, you should also do your share and not leave everything to the broker.

One way of attracting potential buyers is by making sure that your asking price is just right. You should be able to have enough room to negotiate the other terms and conditions of the sale as well. Also, you must work hard to enhance the curb appeal of your home. Without spending so much, you can try to improve how your home looks inside and out. After all, first impressions do last.

Selling your home successfully will allow you to enjoy a blemish-free credit record. You will also be in a position to buy another home, if your finances finally permit you to do so.

In the past couple of years, millions of homeowners have started having problems with their mortgage payments, mainly due to the aggressive lending practices that were prevalent in the last home buying boom.

Most of these homeowners got approved for loans that they really could not afford while the others did not realize the terms included in their loan contract. As soon as interest rates began re-setting, many of these homeowners discovered that their mortgage payments have ballooned by as much as 40 percent.

If you missed a payment and can not ask the lender for a repayment option, you should certainly explore the possibility of a loan modification.

Bear in mind that this foreclosure alternative can only work if your lender agrees to it. Before, most lenders will not be accommodating to borrowers who request that their loan terms be modified. But with the wave of foreclosure sweeping the country, it has become extremely popular.

Basically, loan modification entails changing the payment terms and interest rates, if applicable. You should try not to confuse it with refinancing, wherein you will be paying off your existing loan with the proceeds from the new loan. Since loan modification will not mean a new loan, there will be no legal fees, survey, closing costs and other taxes involved. Also, in most cases the principal amount remains unchanged. Only the monthly mortgage payment amount and length of the loan will be changed.

Some lenders will require you to have your home appraised once again before approving your request for a loan modification. This is actually reasonable and it certainly is less troublesome compared to refinancing. The lender, in this case, just probably wanted to be assured that your home’s current market value is sufficient enough to justify the decision to modify the existing mortgage loan.

In any case, you will surely need to discuss with your lender this particular option. You will certainly be able to avoid foreclosure and manage your mortgage payments better in the future.

Another option that troubled homeowners should explore if they can no longer meet their mortgage obligations is refinancing. But before you heave a sigh of relief, you should know that this option is not for everyone.

For starters, you must have equity on your property. You can determine whether you have equity or not by subtracting the mortgage debt from the current market value of your home. If you are enjoying equity, then you will probably have a good credit score. Also, it is important that your lender has not filed a Notice of Default yet, which could adversely affect your credit rating.

If you meet these two requirements, you will have a good chance of getting approved for a new loan. In refinancing, you will simply be taking out a new loan with more manageable payments and even lower interest rates. Essentially, you will be paying off your existing loan – the one which you are having trouble paying.

Once you have decided that this is the option that will help prevent foreclosure, you must now check out the loans being offered in the market. Luckily for you, conditions are quite optimal for borrowers. Interest rates are at record low and underwriting guidelines are stricter.

When shopping for a new loan, you must stay away from the hybrid loans that offer options such as interest-only payments and adjustable interest rates. You should know that these kinds of loans were considered to be responsible for the mess in the subprime industry. Many borrowers during the last housing boom failed to understand the terms and conditions of these risky loans and ended up losing their homes to foreclosure.

As soon as you have found the right loan for you, you will no longer be worried about losing your home to foreclosure. Of course, you will have to make sure that are able to meet all your payment obligations to avoid being in the same situation again.

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It is not at al surprising that many homeowners are struggling to make their mortgage payments considering the unbelievably-high prices of fuel and increased cost of living. Therefore, it is not remotely impossible to find yourself with no money left to cover your mortgage payment for the month.

The first thing you have to do in a situation like this is simple. Do not panic.

Most homeowners fail to realize that the moment they start panicking, they will no longer be able to think clearly and fail to address the problem at hand objectively.

For missed mortgage payments, you will only need to contact your lender and set an appointment. Before the scheduled appointment, you must prepare any relevant financial documents that will help you explain your current financial condition. Of course, this is assuming that you have determined the reason for your incapability to meet your mortgage obligations.

Once you are there, you can ask your lender for a repayment option that will work for you. For instance, you and your lender could set up a short-term plan that will involve additional payments on top of your regular mortgage payments, in order to pay for the amount past due. Or, your lender might even simply forgive you for the missed payment and allow you to settle the unpaid balance, free of penalties or interest.

If you want to avoid foreclosure, the key is always communication. It will certainly not help you if you ignore your lender’s calls and letters and do not explain why you have missed your mortgage payment. If in case you suffered from a temporary financial setback, you will be surprised to know that lenders are usually open to discuss mortgage problems and are not keen on filing foreclosure.

Missed mortgage payments should not be something that you must worry about. Most homeowners experience this problem and many of them have addressed it quite successfully.

Start your Foreclosure search for:

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Highlighting the low demand and sluggish market that have been plaguing Michigan for most of the past few years and contributing to its sinking property values, the amount of property sales in the Kalamazoo area fell again in April for the fourth consecutive month. However, the rate at which homes sales are declining is slowing, which may signal the beginning of a turnaround in the market.

For the first 3 months of the year, home sales in the area fell a total of 11% over the same period in 2007. However, April only saw a 3% decline, raising the hopes of market economists and those involved in the local real estate industry.

Foreclosures continue to be a problem in the Kalamazoo area however, as local agents report that they are contributing heavily to falling property values. The foreclosure rate is currently up over 14% higher than it was at this time last year, and people are worried that it may continue to grow. However, the area is also seeing increased interest in foreclosed home purchase, a possible sign that the inventory will decrease taking pressure off the property value of nearby properties.

Officials on the whole seem optimistic about the Kalamazoo foreclosure homes scene, as many are predicting that now that problem mortgages and homeowners in danger of default have been recognized, they may have seen the worst of the problem pass.

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