Residents of the the neighborhood claim the rapper illegally entered the property and has since disturbed the community with his loud music and rampant marijuana smoking, which neighbors say they can smell from their properties.

Read more at myfoxla.com.

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To own your own home is not a small venture, and requires a lot of thought.  I am sure that many would agree that the process is very long, tedious, time consuming, and perpetually costly.  Whichever home you purchase, you must make that decision responsibly.  The amount that you pay on your home, and the payments that you are required to make to retain your property will have a huge effect on your future financial state.

If you are not wealthy but want to be someday, never purchase a home that requires a mortgage that is more than twice your household’s total annual realized income. (The Millionaire Next Door- Thomas J. Stanley and William D. Danko)

While I believe that this over-simplifies the situation, the thought behind it is very true.  If you want to purchase a home, you should act your own wage.  Make sure that you purchase a home within the amounts that you can afford to pay.  I have seen many people go out to look for a new home without any idea of exactly how much they can afford to pay.  I urge every one of you to take some time to sit down and do the math before beginning the hunt to look for a home.  The bank doesn’t know your situation better than you do, so don’t let the bank do the math for you.  Remember that every one who has ever filed for bankruptcy or foreclosure was initially approved for a loan from the bank.  Don’t let the mortgage broker do the math, as he is pushing for the highest loan to make the most commission.  He will find a way to stretch you well beyond your means, making a nice commission, while you loose your sanity and happiness trying to over-extend your budget to make your mortgage payments.  “The rich rule over the poor, and the borrower is servant to the lender.” (Proverbs 22:7)  Simply buying a home should not be your only goal, but rather you should be buying a home that you can keep and live in.

To live above your means by purchasing a house that is out of your range has other negative ramifications as well.  People fail to realize that when you purchase a home, you are also entering into a more extravagant lifestyle.  Your neighbors will drive more expensive cars, go to more expensive private schools, and live lifestyles that they are more adapt to handling.  There can be a lot of pressure when put in a situation to want to “keep up with Mr. and Mrs. Jones”.  If you purchase a piece of property that is more suitable to your income level, you will find that there is less financial pressure to conform.  Just keep in mind that there could be a person who really is wealthy, living next door who bought his $300,000 home AFTER he/she became wealthy enough to afford it.

As stated, before you jump the gun and purchase that house, make sure you do the numbers.  I can’t emphasize this enough.  Below is a worksheet for you to follow.  If you are able to fill in this worksheet, you will be ahead of the game when it comes to planning the purchase of your home.  This worksheet was derived from The Courage to Be Rich by Suze Orman.

If you have sufficient money left over after you have successfully filled in the table, then you should be able to purchase your home.

One good way to find out if you will be able to purchase your home before you buy it, is to purchase an imaginary house.  Calculate how much you think you will be able to afford, then immediately open a savings account.  With your house fund, put a down payment into your new account that will come as close to 20% as you can afford.  From then on, each month put the calculated mortgage for your new imaginary home in the account.  With out fail, make mortgage payments in your savings account for either six months; or until you have the 20% down payment that you will need for your imaginary home.  If you find that you are able to make these payments, and still are able to live comfortably without over-extending your budget, then you are on your way to having that new house.

If you notice in the monthly house payments section of the table, you see a payment labeled PMI.  This stands for Private Mortgage Insurance.  This is the insurance that protects the mortgage lender from financial loss if the borrower decides that he won’t/can’t make the mortgage payments any longer.  You can avoid this amount if you have 20% of the down payment when you purchase the home.  If you have as much as 2% less then the 20% requirement, then you have to pay PMI.  To figure out how much you will have to pay for PMI for the first year, multiply your mortgage by .006.  This will be your first year payment (up front).  If your mortgage is $100,000 then your PMI for the first year will be $600.  If your mortgage is $400,000, then your PMI for the first year is $2400.  This payment does not end the first year.  Each month, in addition to your mortgage payments, you are required to make an additional PMI payment.  This additional payment is calculated by dividing your total initial PMI payment by 12.  So for the $100,000 mortgage, you would have to pay $600 up front, and $50 per month.  For the $400,000 loan, you are required to pay $2,400 up front and $200 per month (again, this is in addition to your regular expected mortgage payment).

Many people fail to realize that this payment should not last for the duration of the loan.  You are only required to pay PMI up until you have established 20% equity in your home.  At this point, it is YOUR responsibility to call your lender and have them seize your payments.  If you don’t call them and tell them, you will continue to be charged PMI on your loan.  Before you sign any papers, make sure that your bank allows the PMI payments to be cancelled.  Before signing the loan, have the lender put in writing that they will cancel the PMI payments when you reach the 20% equity mark.  Even if the lender agrees to this in writing, make sure to call and remind them to cancel your PMI payments.  They have no incentive to do it themselves.  Upon canceling, you will be able to have the initial outflow of your PMI payment returned to you.  Don’t forget to ask for this money back.

You should be careful of those banks that claim not to charge PMI.  Many times banks will load PMI charges into the original rate of the loan.  For instance, a bank will say that they will charge you a 7.5% interest rate, and you don’t have to pay PMI no matter how much you initially put down.  However, they fail to tell you that they have added another 0.5% to the loan to compensate for the lack in PMI payments (they make a 7.0% loan into a 7.5% loan).  Essentially, you have locked paying PMI for the duration of the loan, instead of up until you have reached the 20% equity mark of investment in your property.

Have you fully inspected that house to make sure that there aren’t any other traps that can translate to more money that you have to pay in the future?  Have you checked for structural damage, termites, high asbestos levels, or flaking lead based paint.  A simple checking of the yellow pages or a call to your real estate attorney to recommend a certified building inspector will help.  Did you flush the toilets to test the water pressure, turn on the water in the kitchen and bathrooms to see how long it takes to get hot, or test to see that the appliances are in working condition?  How old is the water heater, furnace, air conditioner, washer, refrigerator, washer, dryer, dishwasher, or stove? Are they under warranty, and if so does the seller still have the paperwork?  How up to date is the electrical system?  These and many other questions like them can save you a lot of headache and unnecessary cash outflow in the future.

Many people have discussed the possibilities of paying off your mortgage early.  I have always been a huge fan of early mortgage payments.  However, you shouldn’t start paying down your mortgage until you have established an adequate emergency fund.  This is because you need to access liquidity in case of unexpected happenings.  Also, paying extra principle should fall behind maxing out your contributions for your tax deferred assets such as your IRA and your 401k.  There are some that say that paying extra principle contributes to extra equity that isn’t readily accessible, and that you are making a decision to not diversify your portfolio.  There is also the argument that if you have a low-interest mortgage, and an opportunity to invest the principle payment in an investment with a higher return than the tax-effective rate of your mortgage interest, you should probably do that.  These are all valid arguments.  However, there are many reasons why I still prefer to pay your mortgage early provided that your emergency fund and tax deferred assets are in order.

If you have excess cash, and that makes you feel safe, remember that early mortgage payments have not disappeared but are in your home.  For one, if you are older, there are many states that consider your home an exempt asset when it comes to qualifying for Medicare, regardless of how much equity you have in it.  Also, you can always apply for an equity line of credit (preferably while you are still working and have an income).  If you should use this option, make sure that you get a line of credit where you can write a check against it only if you need it.  This way you will have access to the cash, but aren’t paying interest on it until you actually use it.  Chances are, payments for this line of credit will be less than your mortgage payments would have been.  If you are in retirement and have one less major expense to worry about such as a mortgage payment, this is one of the richest feelings there is.

There is no guarantee that you will receive a higher return than your mortgage rate in the stock market.  To some, paying off that mortgage early might not make sense.  However, I rate peace of mind higher that any other economic rational out there.  If we can all strive for that day when we are all debt free, we can then work to put full attention towards our savings.  So why not opt for that 15 year mortgage instead of that 30 year that is so popular?  You can also find out from your financial planner the amount that you should increase your monthly payment to cut your mortgage in half.  Many people prepay the next month’s “principal” in addition to your regular monthly payment.  Imagine how much more modest your living cost will be without any debts or house payments.  “Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.” (Romans 13:8)

We all want to live the dream of owning our own home.  To come home to something that we own is a magical feeling.  This comes at a very hefty price, however.  It is very wise to take the time to make this decision wisely.  Cross every “T”, dot every “I”.  In the end it will be worth the time invested.

Written By: Ryan Mack, President of Optimum Capital Management, LLC

Email Questions and/or Comments to ryan@optimum-capital.com

(www.optimum-capital.com)

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The Perfect Credit Card For You

By: Trisha Ocona Francis

While tens of thousands of Americans are losing their homes to foreclosure every day and the unemployment rate still remains high, many middle-class American homeowners have asked the question, “Where is my bailout?” Well, our voices have not fallen on deaf ears.  Thousands of homeowners will finally have access to the miracle aid they have been seeking.

One-billion dollars has been awarded to the U.S. Department of Housing and Urban Development (HUD) through the Dodd-Frank Wall Street Protection Act for the Emergency Homeowner’s Loan Program (EHLP). Through this program, eligible homeowners can receive assistance with both their delinquent and future mortgage payments for up to 24 consecutive months or up to $50,000. This should give the granted homeowners enough time and financial assistance to get back on their feet and avoid losing their homes. This homeowners’ loan will be granted at 0% interest and be forgivable, which means the balance will be automatically reduced by 20% every year for five years until the balance is clear.

Some of the requirements include: [consult with an EHLP Counselor for all EHLP eligibility requirements]

• Temporarily and involuntarily unemployed or underemployed due to the economy or a medical condition
• At least 90 days delinquent on mortgage, with a risk of foreclosure and have received a written notice from lender stating such
• Property must be owner’s primary residence
• Applicant must be the deed holder
• Property must be a single-family, multi-family up to four units, cooperative or condominium
• Have a good history or paying the mortgage payments before income reduction.

The enrollment period ends on Friday, July 22, 2011. To be sure that homeowners are eligible, HUD requests that you take the first step by submitting a Pre-Applicant Screening Worksheet to an EHLP counseling agency.  This worksheet, along with a listing of counseling agencies in your area, can be found on the EHLP website www.ehlp.org or by calling 1.855.346.3345.  HUD may establish a random lottery program to select applicants in the event that submissions are higher than anticipated. If selected, applicants will be required to meet with an EHLP counselor to submit supporting documents. Lottery selection does not guarantee EHLP assistance. Once ultimately approved and selected, a homeowner’s contribution amount is determined by HUD, which is 31% of your currency monthly income or $150 (whichever is more) and the EHLP will pay the remainder of your monthly mortgage payment.

EHLP is available to homeowners in Alaska, Arkansas, Colorado, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. It is also offered in Puerto Rico. If EHLP is unavailable in your state or you are not eligible to qualify, visit www.findaforeclosure counselor.org to contact a counselor to discuss your options  and determine if your state has received funds through the U.S Treasury’s Hardest Hit Fund Program.

I know many of us will think of this as another attempt to help American homeowners who won’t do much at all. However, remember home is the place you and your family rest their heads at night—an investment that has consumed a lot of your time and energy. It can be taken away from you for reasons beyond your control. Think of the words of Theodore Roosevelt, “It is hard to fail, but it is worse never to have tried to succeed, and take another shot at saving what we call home.”

*PLEASE NOTE: Both the EHLP application process and the opportunity to receive assistance from an EHLP counseling agency is FREE. Anyone who requests a fee for this kind of assistance is being deceitful.

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Obama offers mortgage relief to unemployed homeowners

Expected to become a standard for the mortgage industry, these adjustments will allot unemployed homeowners more time to find employment while keeping their homes.

Forbearance will also be extended to severely delinquent borrowers.

The adjustment to the FHA will work in concert with other successful initiatives framed by the Administration: the Hard Hit Fund and the Emergency Homeowner Loan Program (EHLP). The FHA provides aid to 18 states and the District of Columbia, implementing programs to avoid homeowners from foreclosure. The EHLP, which compliments the Hard Hit Fund by serving the remaining states and Puerto Rico, assists homeowners who experience reduction in income and face possibly foreclosure due to involuntary underemployment.

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The Downward Spiral Of The Black Housing Crisis

Minnesota– Prince almost suffered what many Americans have gone through when his house went into foreclosure and he stepped up and paid the mortgage in full.

The property reportedly fell into foreclosure after he allegedly failed to keep up with mortgage payments

Read more at EURWeb

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California — First the Fatboys break-up, and now this.

TMZ is reporting that Jermaine Jackson, older brother of the late, legendary Michael Jackson, may bring in 2011 homeless.
Jackson’s 5 bedroom, 6 bathroom Calabasas home is set to be sold for a minimum bid of $2,184,233 January 21st on the steps of a Pomona, Calif., courthouse. After leasing the home for just under 18 months, pursuant to California law, he has 60 days from the time of foreclosure to vacate.

This is bad news for the former Jackson 5 member, who has been receiving negative media attention for failing to pay nearly $100,000 in back child support. In September, Jackson asked a judge to reduce his $3,000 a month payments to $215 per month, because he was broke and unemployed.

Read full article at BlackVoices.com

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LOS ANGELES — Police arrested 22 demonstrators who blocked entry to a downtown Chase bank branch Thursday to protest what they said were unfair home foreclosures.

The demonstrators, which included homeowners facing foreclosure, community advocates and labor leaders, silently allowed officers to bind their wrists behind their backs with plastic restraints and guide them into a police van.

Dozens more demonstrators chanted and marched on a nearby sidewalk holding sighs that said “Stop Bank Greed, Save Our Neighborhoods” as the 12 men and 10 women were taken into custody.

Detective Gus Villanueva said there were no injuries to police or protesters, who would be cited for trespassing and released.

Alliance of Californians for Community Empowerment member David Mazariegos said the demonstrators hoped to bring attention to the plight of people who were unjustly losing their homes.

He said banks’ failure to modify many borrowers’ loans puts them in violation of the Home Affordable Modification Program in which lenders agreed to participate as part of the bank bailout.

“The banks are not helping anyone stay in their homes,” Mazariegos said. “It’s highway robbery, what they’re doing to these people.”

ACCE director Amy Schur said the groups were singling out JPMorgan Chase & Co. because most of the borrowers whose foreclosures and evictions they are contesting are serviced by that bank.

A Chase spokeswoman did not immediately return a phone call Thursday.

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Thomas Pridgeon had been faced with losing his home since 2009, when New York-based BNY Mellon filed an action against him in Cook County Court.

At a hearing on Monday, his home was to be sold to a lender in North Carolina, who bought the property at a tax auction. He would have had 30 days to leave his house on the 7300 block of South Laflin and turn it over to its new owners.

But instead of attending a foreclosure hearing, Pridgeon was immediately arrested at the Daley Center. He arrived to the court building carrying a fully loaded .45-caliber handgun.

Read more at HuffPo

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Latinos, Blacks Experience High Rates Of Foreclosure In California

The Center for Responsible Lending-a non-profit research and public policy group-released a study, this week, focused on the racial makeup of foreclosures in California. It found that Latinos have experienced notably higher foreclosure rates than non-Hispanic borrowers in the state.

In what’s being called a “first of its kind,” the report, entitled Dreams Deferred: Impact and Characteristics of the California Foreclosure Crisis, analyzed more than half a million statewide cases of foreclosures and found that the vast majority-48%-has been on Latinos. Whites totaled 35%, African Americans 8% and Asians 6%.

Read more at SFChronicle

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Fannie Mae And Freddie Mac Suspend Foreclosures For Holidays

WASHINGTON (AP) – The Obama administration’s flagship effort to help people in danger of losing their homes is falling flat.

More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That’s more than the 27 percent who have managed to have their loan payments reduced to help them keep their homes.

Last month alone, 150,000 borrowers left the program – bringing the total to 436,000 who have exited since it began in March 2009.

Administration officials say borrowers will get help in other ways. But analysts fear the majority will still wind up in foreclosure.

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A major reason so many have fallen out of the program is the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.

Many borrowers complained that the banks lost their documents. The industry said borrowers weren’t sending back the necessary paperwork.

Treasury officials have directed lenders to shift to a new system. They are now required to collect two recent pay stubs at the start of the process. Borrowers have to give the Internal Revenue Service permission to provide their most recent tax returns to lenders.

The growing number of people leaving the program could lead to a new wave of foreclosures. If that happens, it could weaken the housing market and hold back the broader economic recovery.

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Most of those leaving the program were rejected during a trial period lasting at least three months. More than 6,300 dropped out after having their loans modified.

Another 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.

RELATED: Woman Loses Home Over $362 Water Bill

Experts say more borrowers are likely to drop out in the coming months. Some homeowners who owe more on their loans than their properties are worth are likely to conclude that paying an oversized mortgage simply isn’t worth the cost.

Even after their loans are modified, many borrowers are simply stuck with too much debt – from car loans to home equity loans to credit cards.

“The majority of these modifications aren’t going to be successful,” said Wayne Yamano, vice president of John Burns Real Estate Consulting, a research firm in Irvine, Calif. “Even after the permanent modification, you’re still looking at a very high debt burden.”

Obama administration officials contend that borrowers are still getting help – even if they fail to qualify for the program. The administration published statistics showing that nearly half of borrowers who fell out of the program received an alternative loan modification from their lender. About 7 percent fell into foreclosure.

Another option is a short sale(real_estate) – one in which banks agree to let borrowers sell their homes for less than they owe on their mortgage.

A short sale results in a less severe hit to a borrower’s credit score, and is better for communities because homes are less likely to be vandalized or fall into disrepair. To encourage more of those sales, the Obama administration is giving $3,000 for moving expenses to homeowners who complete such a sale or agree to turn over the deed of the property to the lender.

Administration officials said their work on several fronts has helped stabilize the housing market. They cited government efforts to provide money for home loans, push down mortgage rates, and provide a federal tax credit for buyers.

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“There’s no question that today’s housing market is in significantly better shape than anyone predicted 18 months ago,” said Sean Donovan, Obama’s housing secretary.

The mortgage modification was announced with great fanfare a month after Obama took office.

It is designed to lower borrowers’ monthly payments – reducing their mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. Borrowers who complete the program are saving a median of $514 a month. Mortgage companies get taxpayer incentives to reduce borrowers’ monthly payments.

Black women have emerged triumphant in May’s official unemployment data, with a decrease of 10 per cent in unemployment from 13.7 per cent in April to 12.4 per cent in May.

Data from the U.S. Bureau of Labor Statistics positioned black women as the strongest performing demographic in the decline of unemployment across race and gender categories.

There was no change to the rate of unemployment of white women, which might suggest a reduction to the large unemployment gap between black and white women.

However, since February  the unemployment rate of white women has decreased one percentage point to 7.4 per cent, while that of black women has fluctuated around a rate of 13 per cent. This represents a difference of approximately 65 per cent.

Additional data compared across the twelve months from May 2009 to May 2010 indicate that the amount of black women in employment fell almost 1 percentage point from 56.5 to 55.6.

Education was also a factor in last month’s data, as unemployment levels for those without a high school diploma remained three times higher than those who had graduated.

The 52 per cent gap between the unemployment rates of black and white teenagers however remained largely unchanged.

White teenagers suffer an unemployment rate of 24.4 per cent, while 37.3 per cent of black teenagers are currently without work.

US economic data has been positive in recent times. A survey by Manpower Inc. suggested that of the 18,000 employer participants, 18 per cent were considering increasing their staff in the third quarter.

Some areas of the country however are particularly unfavourable for black workers.

Economic Policy Institute, based in Washington, released a study Tuesday highlighting total black unemployment rates of 20.9 per cent, 20.4 per cent and 13.3 for Detroit, Minneapolis and St. Louis respectively.

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From HuffingtonPost.com:

One raw day in early February, Vicki Valentine stood by helplessly as real estate investors snatched her West Baltimore home over what began with an unpaid city water bill of $362.

As snow threatened to fall, she watched a work crew hired by the new owners punch out the lock on her front door. A sheriff’s deputy was on the scene while Valentine and her teenage son piled whatever they could into a borrowed car.

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Running out of time, Valentine scrambled to pack up clothing and mementos. The home had been her family’s for nearly three decades, and her father had paid off the mortgage in 1984. “It’s hard to say goodbye to this house,” she said. “It’s like someone forcing you out of something that belongs to you. I don’t get it.”

Click here to read more.

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Foreclosures Drop 2%, First Annual Drop In 5 Years

Black & Latino Homeowners Hardest Hit By Foreclosure Crisis

WASHINGTON (AP) — Millions of Americans are still likely to lose their homes in the coming years, but the foreclosure crisis is finally showing signs of subsiding.

The number of households facing foreclosure in April fell 2 percent from a year ago, the first annual decline in five years, RealtyTrac Inc. said Thursday.

But the data aren’t all sunny. While the number of new delinquencies is dropping, the number of borrowers losing their homes is still rising. Banks seized a record 92,000 homes last month.

And there are millions more potential foreclosures ahead. Nearly 7.4 million borrowers, or 12 percent of all households with a mortgage, had missed at least one month of payments or were in foreclosure as of March, according to Lender Processing Services Inc., a mortgage data research firm.

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RELATED: Fannie Mae & Freddie Mac Suspend Foreclosures For Holidays

RealtyTrac, a foreclosure listing firm in Irvine, Calif., reported that nearly 334,000 households, or one in every 387 homes, received a foreclosure-related notice in April. That was down more than 9 percent from March.

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

As the economy turns around, “you will see an improvement in housing markets and in foreclosure activity,” said Rick Sharga, a RealtyTrac senior vice president. “The problem is that there’s such a backlog right now.”

Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can’t qualify or fall back into default.

The Obama administration is managing a $75 billion program that so far has helped about 231,000 homeowners with permanent reductions to their monthly mortgage bills. That’s about 20 percent of the 1.2 million borrowers who started the program over the past year.

Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. Cities lose property tax dollars from homes that sit empty and lower property values.

RELATED: Black & Latinos Hit Hardest By Foreclosure Crisis

Among states, Nevada posted the highest foreclosure rate in April, with one in every 69 households receiving a foreclosure notice. Foreclosures there were up 10 percent from March, but unchanged from a year earlier. Next on the list were Arizona, Florida, California and Michigan.

Las Vegas continued to be the city with the nation’s highest foreclosure rate, but activity there was down 3 percent from a year earlier. And in another sign the problem is receding, nine out of the top 10 cities with the highest foreclosure rates posted annual declines. The exception was Reno, Nev., where foreclosures were up 16 percent from a year ago.

WASHINGTON (AP) — Taking aim at deceptive lending, the U.S. Senate on Wednesday voted to ban mortgage brokers and loan officers from getting greater pay for offering higher interest rates on loans, and to require that borrowers prove they can repay their loans.

The Senate, however, rejected a measure that would have required homebuyers to make a minimum downpayment of 5 percent on their loans. The votes were part of the Senate’s deliberations on a broad overhaul of financial regulations designed to avoid a repeat of the crisis that struck Wall Street in 2008.

President Barack Obama weighed in on the Senate debate Wednesday, criticizing a proposed amendment that would exclude auto dealerships that offer car loans from oversight from a consumer financial protection bureau that the broader legislation would create. Auto dealers — influential figures in their communities — have been aggressively lobbying for an exemption from the law, and the amendment, offered by Sen. Sam Brownback R-Kan., could win bipartisan backing.

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“This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees into the fine print of paperwork, and include expensive add-ons that catch purchasers by surprise,” Obama said in a statement. “This amendment guts provisions that empower consumers with clear information that allows them to make the financial decisions that work best for them and simply encourages misleading sales tactics that hurt American consumers.”

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The administration has fiercely tried to protect the consumer provisions of the bill. It has answered the political power of the auto dealers with an appeal on behalf of the military, arguing that soldiers and their families have been particularly targeted by deceptive dealers.

The Senate unanimously approved an amendment Wednesday that clarified any regulations or enforcement actions by the proposed consumer protection bureau would not affect merchants and retailers that do not engage in a financial services. Critics, including the U.S. Chamber of Commerce, had argued that the bill could affect small business owners such as orthodontists, who allow patients to pay over time.

Separately, the Senate overwhelmingly voted to let the Federal Reserve retain its supervision of smaller banks. The underlying regulation bill would have given the central bank oversight only over the largest financial institutions.

Regional Fed presidents have lobbied senators to allow them to continue watching over smaller bank holding companies and state-chartered community banks. Limiting the Fed’s supervision only to bank holding companies with assets of more than $50 billion — as proposed by Senate Banking Chairman Christopher Dodd, a Democrat, — would have left most of the Fed’s 12 regional banks without any institutions under their oversight.

The lending-related measures attempted to respond to one of the issues at the heart of the financial crisis — the abundance of bad mortgage-backed securities that nearly toppled Wall Street and knocked some of the nation’s largest financial institutions to their knees.

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“Credit was extended to people who couldn’t pay their mortgages back, and those were passed throughout the world,” said Sen. Bob Corker, a Republican. “So we had a systemic crisis, not only in this country, but around the world.”

Senators voted 63-36 to amend an underlying financial regulation bill to place restrictions on how mortgage brokers and bank loan officers get compensated. Supporters argued that consumers were steered into higher rate mortgages that they were unable to pay, resulting in foreclosures and toxic mortgage-backed securities that poisoned the markets.

Borrowers would have to provide evidence of their income, either though tax returns, payroll receipts or bank documents. That provision seeks to eliminate so-called stated-income loans where borrowers offered no proof of their ability to pay.

RELATED: High-Income Black & Latino Borrowers Face High Interest Rates

From BlackAmericaWeb.com:

Owning a home is still considered the primary way to get a piece of the American dream by many black Americans, but many also believe that not only is it currently out of reach, but will be increasingly harder to achieve for themselves and their children, according to a survey by Fannie Mae.
Nearly 62 percent of African-Americans surveyed said they still preferred to own a home despite the difficult economy, but 19 percent of those currently renting said the economy will force them to delay purchasing a home.

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Seventy-three percent of African-Americans also said they thought it would be difficult for black buyers to get a loan, compared with the general population, and 61 percent believe it will become even more difficult for their children to buy a home. In fact, most respondents, overall, believe it will be harder for them to own a home than it was for their parents.

Click here to read more.

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Obama To Announce $1.5 Billion In Housing Help

Blacks & Latinos Hit Hardest By Foreclosure Crisis

LAS VEGAS — President Barack Obama is unveiling $1.5 billion in housing help, a boost timed to his appearance in the city with the worst foreclosure crisis in the nation.

Obama’s move, detailed by aides in advance of his town hall here Friday, is the latest by a White House determined to show it is helping families rebound from a deep recession. The downturn is taking an election-year toll on Obama’s party as voter frustration builds.

Obama was to announce that housing finance agencies in the five hardest-hit states in the housing crisis will receive $1.5 billion to help spur local solutions to the problem. Those five are Arizona, California, Florida, Michigan and Nevada.

Text continues after gallery…

The policy wrinkle comes during a two-day Western trip with different agendas for the president. He will be back in town-hall mode, a venue that aides say allows him to connect with people and distance himself from the messy process of Washington governing.

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The president is also out to help vulnerable senators protect their seats and, in turn, gain as much legislative leverage as he can.

At the town hall and a business speech he will be lending his support to Senate Majority Leader Harry Reid of Nevada, a top 2010 election target of Republicans.

Obama’s political involvement comes as the Democrats’ command of the Senate grows shakier, jeopardizing the president’s agenda. The tide of change that Obama rode to office is threatening to slam against his own party.

The first day of the trip was all politics. Obama campaigned Thursday for Sen. Michael Bennet of Colorado in Denver, then held a $1 million fundraiser for Democrats in Las Vegas.

Reid is one of Obama’s allies, despite a flap over the president’s tendency to refer to Las Vegas as a symbol of imprudent spending, which has the city’s mayor fuming at the president.

For Obama, slowing the foreclosure rate is a key step in the recovery of the overall economy. Millions of people have lost their homes because they couldn’t afford the mortgages anymore, and millions lost jobs because of the associated slowdown in new home building.

Reid’s state leads the nation in home foreclosures; Las Vegas was the metro area with the highest foreclosure rate in January, with one in every 82 homes receiving such a filing.

RELATED: Obama Administration To Expand Housing Plan

The money for the new rescue effort will come from the $700 billion financial industry bailout program, according to a senior administration official who spoke anonymously Thursday night because the formal announcement had not been made.

Economic issues, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, subprime mortgages were mostly the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

Obama will cap his Las Vegas trip with a speech to the city’s Chamber of Commerce before returning to Washington later Friday.

WASHINGTON — Mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures and evictions for about two weeks in a temporary break for borrowers during the holiday season.

The suspension, announced Thursday by the government-controlled companies, runs from Saturday through Jan. 3. “No family should have to face the prospect of being evicted during the holiday season,” Michael Williams, Fannie Mae’s chief executive, said in a statement.

Earlier Thursday, Citigroup Inc. announced a 30-day suspension of foreclosures and evictions, affecting about 4,000 borrowers. Fannie and Freddie did not estimate how many homeowners would get this grace period.

Last winter, most major lenders suspended foreclosures while the Obama administration developed its $75 billion loan modification program. But foreclosures picked up again after those suspensions lifted.

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NEW YORK — Black and Latinos are at a disproportionate risk in the ongoing foreclosure crisis because they are more likely than whites to have higher-cost mortgage loans and face higher unemployment rates, a report says.

The report from the William C. Velasquez Institute called on the federal government to take steps, including reforming bankruptcy laws and expanding eligibility for mortgage modification efforts, to help combat the crisis.

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“If nothing is done then the foreclosures will continue disproportionately hitting blacks and Latinos,” said UCLA professor Raul Hinojosa the author of the study.

Hinojosa was in New York City on Monday to talk about the report that was officially released last week. He said continued foreclosures could wipe out billions of dollars in home equity wealth amassed in those communities, and even those black and Latino homeowners who kept their homes would be affected by lower property values in foreclosure-riddled neighborhoods.

“Not only are you wiping out this generation of black and Latino families,” he said, “but those neighborhoods go into serious decline.”

Jose Calderon, vice president of programs and policy for the Hispanic Federation, which took part in the Monday event, said the foreclosures carried a far-reaching impact.

“The social cohesion of our communities is being destroyed,” he said.

RELATED: Obama’s Foreclosure Plan & Black America

Unemployment is now the primary force behind foreclosures. Borrowers are struggling with no income and lenders are having a harder time reworking troubled loans.

Blacks and Latinos suffer in comparison to whites both in unemployment rates and having loans with higher interest rates.

The nationwide unemployment rate is 10.2 percent. For blacks, it’s 15.7 percent and for Latinos, 13.1 percent.

As far as high-cost mortgages are concerned, the report said that in regions across the country, blacks and Latinos were anywhere from two to nine times as likely as whites to have those kinds of loans.

The William C. Velasquez Institute is a nonpartisan think tank that studies Hispanic issues.

From CNN.com:

The housing collapse has made it even tougher for blacks and Hispanics to get mortgages, according to a new government report.

While credit has tightened for everyone, blacks and Hispanics are being denied loans at higher rates than whites, according to new federal data. And the gap is widening.

Lending to black and Hispanic borrowers also fell more quickly than average between 2006 and 2008, according to the 2008 Home Mortgage Disclosure Act data, released Wednesday by Federal Financial Institutions Examination Council. The council consists of the five U.S. bank regulators.

Blacks were denied mortgages 36.1% of the time in 2008, while Hispanics could not get a loan 31.1%, according to the data. Whites had denial rates of 13.6%.

Meanwhile, blacks’ share of the loan market tumbled to 6.3% in 2008, down from 8.7% two years earlier. Hispanics’ share dropped to 8.5% from 12.1%, while whites’ rate jumped to 69.1%, from 62.7%.

These trends reflect the collapse of the subprime lending market. Black and Hispanic borrowers relied more heavily on these high-priced loans for their home purchases during the boom.

Some 43.4% of blacks received high-priced loans, defined as at least 1.75 percentage points above Freddie Mac’s prevailing rate, in 2006. Two years later, that rate fell to 5.7%. Hispanics’ share of costlier loans dropped from 37.8% to 5.8%. The rate for whites fell from 13.7% to 3%.

The disappearance of subprime lending has led to an explosion in government-backed mortgages. The number of loans backed by the Federal Housing Administration tripled between 2007 and 2008, with 51.4% of black borrowers and 44.7% of Hispanic borrowers receiving FHA mortgages last year.

The trends are not surprising, experts say. The data, however, provides statistical back-up with information on 14.2 million mortgage applicants at 8,388 financial institutions. Banks also reported information on 2.9 million loans purchased from other institutions.

The housing collapse threatens the strides blacks and Hispanics have made in increasing their homeownership rates and building wealth, said Lot Diaz, vice president for housing and community development for the National Council of La Raza, a Hispanic advocacy group. While many people received unsustainable mortgages during the boom, many others were able to secure loans they could afford, he said.

“We fought very hard to open up access to credit to low- and moderate-income families and we’re in danger of losing that,” said Diaz, who is particularly concerned about jump starting lending.

The collapse of the subprime market isn’t necessarily a bad thing, some experts say.

To read more, click here.

Court records show that former Chicago Bulls player Eddy Curry’s(notes) suburban Chicago mansion is in foreclosure.

It’s the same home where Curry was bound and robbed in 2007. He now plays for the New York Knicks.

Documents show that Curry was more than $217,000 behind on his $3.7 million mortgage as of Friday. Records reviewed by the Chicago Sun-Times show that Curry and his wife, Patrice, took the 30-year mortgage out in July 2003 to buy the home. A court filing says the Currys’ initial interest rate on the home loan was 9.25 percent with a monthly payment of $28,675.

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Former Heavyweight champ Evander Holyfield’s sprawling Georgia estate is back under foreclosure, The Atlanta Journal-Constitution reported Wednesday.

Unless Holyfield is able to come up with enough to pay off what he owes on the original $10 million loan by July 7, he will lose the 109-room Fairburn mansion. That’s when an auction is scheduled on the steps of the Fayette County Courthouse.

Holyfield, 46, has earned more than $248 million in the ring, “but two divorces, several failed business ventures and child support payments believed to total $500,000 annually have taken a toll on his financial well-being,” writes the Journal-Constitution.

Click here to read more.

Source: BET

From Essence.com:

When President Barack Obama announced his Homeowner Affordability and Stability Plan earlier this year, he said the measure would help up to 9 million families facing foreclosure to stay in their homes. The plan, which went into effect three months ago, would allow three to four million families to modify their payments, which was especially welcome news for African-Americans, who have been steered toward higher mortgage loans and disproportionately affected by the foreclosure crisis. But there have been pitfalls along the way. Although filings decreased 6 percent in the past month, the number of homes facing foreclosure—321,480 in May 2009—is still staggering. Many banks and mortgage lenders are understaffed and unprepared to deal with the high demand for modifications so far. Congressman Elijah E. Cummings of Maryland has a plan that just might work. He has urged President Obama to consider new options for struggling homeowners like drafting legislation that would reallocate TARP funds given to banks and paid back to the government, for short-term loans to help unemployed homeowners. ESSENCE.com talked to Cummings about the kinks in the President’s current plan, his proposed solution and why American homeowners deserve more help.
ESSENCE.COM: What do you think is the biggest problem with President Obama’s mortgage plan?
CONGRESSMAN ELIJAH E. CUMMINGS: What the President is trying to do is get people to have loans that are reasonable, so they can pay the money back. But if you have no job, then it becomes almost impossible. In the vast majority of modifications that have been done people have defaulted again.

ESSENCE.COM: The Obama administration predicted that his plan would allow 3 to 4 million people to modify their homes. Given the rising unemployment rate, is that estimate too high?
CUMMINGS: Well, that’s going to be very difficult. My Congressional office recently held a foreclosure prevention conference. We had 1,000 people come out to meet with 19 lenders—Citigroup, Countrywide and others. It was far more successful than I ever imagined it would be. Let’s say, for example, there was a two-income family and the husband lost his job. It was easy to help those people. The lenders came through. In most instances they reduced the interest rate, and if that didn’t help then they reduced the principal. We were able to help at least 500 or 600 people out of that 1,000. The only people that we found difficult to help were those that didn’t have jobs.

Click here for the full interview.

From NYTimes.com:

She had seen the advertisements for the new government program offering relief. She had heard President Obama promise that help was on the way for homeowners like her, people who had lost jobs and could no longer make their mortgage payments.

But when Eileen Ulery called her mortgage company — Countrywide, now part of Bank of America — the bank did not offer to alter her mortgage. Rather, the bank tried to sell her a new loan with a slightly lower monthly payment while asking her to pay $13,000 toward the principal and a fresh $5,000 in fees.

Her problem was that she did not yet present a big enough problem to merit aid.

Click here for full story.

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The Obama administration is expected to expand its mortgage aid program on Thursday, announcing new measures that would help homeowners avoid a blemished credit record even if they don’t qualify for other assistance.

The new initiatives are expected to include ways to allow borrowers to avoid foreclosure by selling their properties or giving them back to lenders, according to people briefed on the plan who declined to be identified because it has yet to be announced.

One way would be to encourage a “short sale,” in which the home is sold for less than the amount owed on the mortgage but the lender considers the debt paid off. Another option is a deed-in-lieu of foreclosure — in which the borrower gives the property to the lender to satisfy a delinquent loan and to avoid foreclosure proceedings.

Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan are scheduled to appear Thursday morning with some borrowers who have benefited from the government’s housing aid program launched in March. An administration official said more than 55,000 offers have been made to modify borrowers’ loans in its first two months.

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Short sales are often seen as preferable to foreclosure because they don’t harm a borrowers’ credit record as much as a foreclosure, but real estate agents have complained that the process can drag out for months.

“The problem is it’s never clear who in a bank has the authority to approve a short sale,” said Howard Glaser, a mortgage industry consultant in Washington and a former HUD official. Federal standards “would speed the process for buyers and sellers by making it more efficient.”

The administration estimated earlier this year that as many as 9 million borrowers will be helped through its “Making Home Affordable” initiative, including up to 5 million borrowers who are refinancing loans and 4 million who are modifying mortgages at lower monthly payments.

So far, 14 companies representing about three quarters of the mortgage market have signed up and are in line to pocket a portion of $50 billion in incentives to lower borrowers’ monthly payments so they can stay in their homes.

“We are confident that banks and servicers will move as quickly as possible to modify these loans to avert additional foreclosures in the coming months,” Donovan said earlier this week.

Meanwhile, the pace of the foreclosure crisis continues to accelerate.

The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates, foreclosure listing service RealtyTrac Inc. said Wednesday.

More than 342,000 households received at least one foreclosure-related notice in April. That means one in every 374 U.S. housing units received a foreclosure filing last month, the highest monthly rate since Irvine, Calif.-based RealtyTrac began its report in January 2005.

April was the second straight month that more than 300,000 households received a foreclosure filing, as the number of borrowers with mortgage troubles failed to abate.

The April number, however, was less than 1 percent above that posted in March, when more than 340,000 properties were affected.

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Struggling bank Citigroup Inc. said Tuesday that it will lower mortgage payments for some homeowners to an average of $500 a month for three months as part of a new program to help the unemployed.

The struggling bank makes the move as President Barack Obama looks to lenders to adjust the way loans are handled.

Citigroup’s new mortgage efforts also come on the heels of the latest attempt to bail out the company, which includes the U.S. government’s exchange of up to $25 billion in emergency bailout money given to Citigroup for as much as a 36 percent equity stake in the company. The deal between the Treasury Department and Citigroup represents the third rescue attempt for the bank in the past five months.

Unemployed homeowners who may qualify for assistance from Citigroup under the Homeowner Unemployment Assist program include those that are 60 days or more past due on their mortgages or in foreclosure and can pay the reduced amount. Customers must also have a first mortgage loan that is owned and serviced by CitiMortgage Inc. and conforms to government sponsored enterprise limits. The house must also be the customer’s primary residence, with homeowners meeting all insurer and guaranty requirements.

“Our Homeowner Unemployment Assist program is intended to serve as a bridge toward a longer-term solution, helping homeowners stay in their homes and in their communities while they get their feet back on the ground,” CitiMortgage Chief Executive Sanjiv Das said in a statement.

Citigroup predicts thousands of homeowners may be eligible for the program over the next two years.

Those that partake in the program and are still without jobs after three months will have their mortgages handled on a case-by-case basis to come up with the best payment option, Citigroup said. Others that find work within the three-month period can go back to paying their original mortgage amount or receive a long-term loan modification if qualified.

The program may also be expanded to include customers that are in early delinquency stages or are current on their mortgage at a later point in time once an initial evaluation of the program is complete.

Homeowner Unemployment Assist is part of the bank’s existing Citi Homeowner Assistance, which tries to help customers avoid foreclosure.

One of the hardest hit banks by the ongoing credit crisis, Citigroup is in the process of shedding assets and cutting staff as it looks to reduce costs and streamline operations ahead of splitting its traditional banking businesses from its riskier operations. In January the company reached a deal to sell a majority stake in its Smith Barney brokerage unit to Morgan Stanley.

From uspoverty.change.org:

Yesterday, President Obama announced a $75 billion program to address the challenge that foreclosures pose to our collective economic future with an orientation towards helping families stay in their homes. But the provisions in the President’s proposals won’t be implemented for weeks and months. Between now and then there are still 2.3 million families in the country facing foreclosure proceedings. And one new family joins them every 13 seconds. The reality is that everyone is affected by this crisis; the foreclosure epidemic is at the heart of our economic meltdown.

So, today, Thursday Feb 19, ACORN members and community activists in seven cities are formally launching the HomeStaying Campaign, in which families facing eviction for foreclosure will announce plans to stay in their homes, and Home Defender teams will stand in solidarity with those homeowners.

The Home Defender Teams are local neighbors and community activists prepared to mobilize on short notice to peacefully help defend a family’s right to stay in their homes until a fair solution to the crisis is put into place by the new Administration. Over the coming weeks, people in 24 cities are going to be taking part in this campaign. The New York Times did a great story yesterday about a Home Defenders training session in New York City over the weekend.

Homeowners who live in neighborhoods with one foreclosure see their housing values drop by 2%. For homeowners in communities hit hard by this crisis it is much worse. The abandoned homes become magnets for crime and vagrants, further destabilizing communities, to say nothing of what happens to the families that have to go through the process of losing their homes.

In many cases the people facing foreclosure are hard-working people who played by the rules their entire lives, but were caught up in circumstances beyond their control or were taken advantage of by their lender.

The Obama Administration’s proposal contains five key ingredients without which any proposal will not succeed.

• Lifts the unfair ban on judicial modifications for primary residences
• Requires foreclosure prevention protocols from recipients of taxpayer assistance
• Fixes the “Hope for Homeowners” program by streamlining and broadening eligibility requirements
• Utilizes $75 billion to facilitate mortgage modifications to keep homeowners in their homes
• Strengthens Fannie and Freddie to expand access to affordable refinancing

It is inevitable that elements of Wall Street and their enablers in Congress will try to weaken or gut provisions that subscribe to these principles. We cannot let that happen.

You can help people like Debra by telling Congress to support the five key elements of the Obama plan to keep families in their homes.

ACORN’s Foreclosure Campaign is fundamentally about saving the American Dream, about living up to our best visions of ourselves as Americans, about reaching out to stand in solidarity with each other, and, inch by inch, making this a stronger nation.

From Richard Wold at USA Today:

Drive into the sprawling development of stucco starter homes in this Phoenix suburb by the San Tan Mountains and the first thing you notice are the “For Sale” signs.

The next thing is what many of them say: “Bank-Owned Home.”

To read more, click here.

According to the new York Post former American Idol winner, Fantasia Barrino will have her North Carolina home auctioned this monday and is ignoring the legal threat.

Read The Full Report Here

From EURweb.com:

The nation’s foreclosure crisis has arrived on the doorstep of Wyclef Jean’s Miami property.

According to TMZ.com, Miami-Dade County will auction off the house he was still building on Dec. 12 because the singer owes $2 million in mortgage payments.

Click here for the full report.

Citi said late Monday it won’t initiate a foreclosure or complete a foreclosure sale on any eligible borrower who seeks to stay in a home if it is the borrower’s principal residence, the homeowner is working in good faith with Citi and has sufficient income to make affordable mortgage payments.

Citi said it is also working to expand the program to include mortgages the bank services but does not own.

Additionally, over the next six months, Citi plans to reach out to 500,000 homeowners who are not currently behind on their mortgage payments, but who are deemed as potentially needing assistance to keep current with their payments. This represents about one-third of all the mortgages that Citigroup owns, the bank said.

Citi plans to devote a team of 600 salespeople to assist the targeted borrowers by adjusting their rates, reducing principal, or increasing the term of the loan, steps known in the mortgage industry as a workout.

Of the four biggest U.S. banks — Citigroup, JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. — Citi has been on the shakiest footing as a result of the mortgage crisis, reporting losses in the past four consecutive quarters while its rivals have managed to post profits. The steps announced Monday are designed to stem those losses.

“Typically the lender loses the most money when a house goes into foreclosure,” said Barry Zigas, director of housing policy at the Consumer Federation of America. “(The lender) takes some kind of loss that’s usually much greater than what they sacrificed through some kind of workout.”

Sanjiv Das, chief executive of CitiMortgage, said, “It is in our interest that borrowers stay in their homes and actually make the payments.”

Citi is targeting homeowners in geographic areas with higher-than-average unemployment and foreclosure rates, primarily in Arizona, California, Florida, Michigan, Ohio and Indiana, Das said. The program is expected to affect about $20 billion in mortgages.

“As the unemployment rate is starting to creep up on us, there is going to be increasing distress in the marketplace,” Das said in an interview with The Associated Press. “It’s not going to distinguish between what type of mortgage they have.”

“There is a huge amount of anxiety among borrowers,” he said. “We will reach out to them before they become delinquent.”

Since early last year, Citigroup has helped about 370,000 families avoid foreclosure, representing more than $35 billion in loans, the bank said.

Citi has avoided negative amortization loans, option adjustable-rate mortgages, and other types of risky mortgages, defaults on which have skyrocketed since the start of the housing bust in the middle of last year. Still, the bank has nonetheless been hurt by the relentless downturn in housing that fed the mortgage and credit crisis, and in turn, the near-breakdown of the financial system.

With defaults mounting, other lenders, including JPMorgan and Bank of America, have also become more aggressive about modifications to mortgage agreements.

But a moratorium only solves so much, according to Zigas. “A moratorium on foreclosure will be effective at stopping foreclosure, it won’t be effective at stopping the underlying reasons of why people are in trouble,” he said.

By taking a proactive approach, Citigroup isn’t waiting until it’s too late to deal with delinquent borrowers, said Steve Curnutte, president of InsBank Mortgage in Nashville, Tenn. However, the problem is growing faster than most banks can handle, he said.

“It’s nearly an insurmountable undertaking,” said Curnutte. “The number of bad loans that they can modify using their resources is being quickly outstripped by the number of new loans that need to be modified.”

More than 4 million American homeowners with a mortgage were at least one payment behind on their loans at the end of June, and 500,000 had started the foreclosure process, according to the most recent data from the Mortgage Bankers Association.

Late last month, JPMorgan expanded its workout program to an estimated $70 billion in loans, which could aid as many as 400,000 customers. The New York-based bank has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007.

JPMorgan also said it will not put any loans into foreclosure as it implements the expanded program over the next 90 days.

Bank of America, meanwhile, has said that starting Dec. 1, it will modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp. as part of an $8.4 billion legal settlement reached with state officials in early October.

The government is also working on an ambitious plan to help around 3 million borrowers avoid foreclosure, but details have yet to be released.