Arizona's Foreclosed Future
Real Estate, Mortgages and Bank Owned Properties
What's going on with Wall Street is a direct result of the greed that begin in Arizona and other states. Realtors, mortgage bankers and investors took advantage of incentives to encourage more homeownership. Real estate agents saw huge pay days as they helped people buy and sell homes like there was no tomorrow. Mortgage companies such as First Magnus, which declared bankruptcy last year, are accused of offering kickbacks to builders, real estate agents and brokers. Many individuals and couples started buying up property in hopes of selling a few months later for a pretty profit.
Some who wouldn't have otherwise qualified for a home loan used government incentives to buy a home, often times one they ultimately couldn't afford. Brokers and mortgage companies also threw caution to the wind by not confirming income or the ability of home buyers to pay mortgages. This became a problem when those who took out subprime loans saw their mortgage payments increase several hundred dollars after two years.
Those mortgages were bundled by banks and investment companies and sold as securities. One problem. When an excess of homes were built or put up for sale, the high prices the real estate market experienced from 2003 -2006 suddenly dropped. And are still dropping, causing many people to be upside down with their home mortgages--owing far more money than their house is worth. People stopped paying their mortgages and the rest is history.
Have a comment or question about what happened or about the new federal housing law that takes effect October 1? We'll try to get to as many questions as possible. Thanks!
Posted by
Paul Atkinson - Here and Now Producer at
11:00
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Comments (6)
I believe the root cause of our economic crisis should be addressed. The media has reported that approximately one million foreclosures have already taken place and forecast another four million foreclosures to come. This being true, Congress should mandate that all mortgage interest rates be temporarily reset to say, 5.6 percent fixed until any and all funds leveraged by a Bush bail out plan have been paid back into the system. The banking industry may complain, but time of greed must be put aside for the greater good. Foreclosures would be eliminated, cash would flow, people would remain in and be able to keep their homes, and the root cause of this crisis would be squashed. This would apply to homeowners currently in the process of foreclosure and people struggling, barely making their payments. Then maybe the American public could swallow this Bush Bail Out Plan being shoved down our throats under the pretense that the alternative would be catastrophic.
The recent rules state the CDBG funds can only be used to purchase single family homes below market value for the home or property. Market value is likely below the bank note. Are the banks really willing to lower their mortgages? So far, banks don’t want to lower their asset value. We can come up with programs but cooperation from the banks may be a brick wall.
It seems to me, based on your guest's comments about how this is such "an exciting time", that we, the American people, are going to deal with these problems on our own (as long as a lender can be found to go along with it). So, why do we still need a $700 billion dollar "bailout" on Wall Street?
What's the first step for a homeowner wanting to participate in the new program? Do you have to be in foreclosure to participate or at risk?
Anre,
According to HUD, you do NOT have to be facing foreclosure. The criteria is that you have a SUBPRIME loan that was taken out before 2008. Doesn't matter if you're facing foreclosure. The key is that it is up to your lender to agree.
I would suggest that KJZZ produce a piece on Habitat for Humanity of Central Arizona and how they will participate in rehabing local homes, their use of CDBG money and Habitat's mission of helping to provide affordable, decent housing. Contact Habitat Central Arizona at 602-268-9022.
Kyle
