Foreclsoure

Hotels in Default on the Rise

An increasing number of owners of hotels are walking away from their properties and turning the keys over to the bank.

More than 1,000 non-casino hotel properties and 31 casino hotels are in default with a total loan value of more than $25 billion, according to research firm Real Capital Analytics.

Unlike other commercial real estate with long-term leases, guests can abandon a hotel overnight, leaving the management with little or no cash flow.

Many of the hotels in default are publicly traded. “Pricing for hotels really got out of control in 2005 to 2008 and the public companies were aggressive in buying assets, so they piled on a lot of mortgage debt,” says David Loeb, a lodging analyst with Robert W. Baird & Co.

Source: The Wall Street Journal, Kris Hudson

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

Foreclsoure

Unemployed Might Get Anti-Foreclosure Help

The Obama administration is reportedly considering a program that would give loan forbearance to the unemployed. The aim of the program is to provide help without distorting the housing market.

The program would augment the federal loan modification program, giving unemployed workers more time and financial leeway to qualify for a new loan.

So far the loan modification program hasn’t been very successful for a variety of reasons, including the declining equity many troubled borrowers have in their homes and rising unemployment figures that make lenders unwilling to participate.

Last week, the U.S. Treasury Department asked the 25 largest mortgage service companies to appoint a liaison officer to work with the government to slow defaults. On July 28, Treasury will host a meeting with these servicers to examine whether qualified applicants are being ignored.

Source: Reuters News, Patrick Rucker and David Lawder (07/13/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

Foreclsoure

Lenders Avoid Loan Modifications

The Obama administration’s $75 billion foreclosure prevention effort is unlikely to succeed because mortgage lenders cannot turn a profit on modified loans, concludes a new report by the Federal Reserve Bank of Boston.

Analyzing 665,410 loans originated between 2005 and 2007 that subsequently became seriously delinquent, the Boston Fed found that only 3 percent of borrowers had their loans modified to lower monthly payments, and about 5.5 percent received workouts that did not result in lower payments.

Also, up to 45 percent of approximately 150,000 borrowers who received some kind of aid ended up in arrears again, but about 30 percent of delinquent borrowers were able to fix their problems without help from their lenders.

Source: Boston Globe, Jenifer McKim (07/07/2009)(06/25/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Foreclsoure

Another Rash of Foreclosures Coming Soon?

Some economic observers are predicting another wave of foreclosures later this summer or in the fall. That’s because lenders that have held off on foreclosures as part of President Obama’s plan will now move forward aggressively to clear the backlog of troubled mortgages.

Rising foreclosures will further depress home values, says Mark Zandi of Moody’s Economy.com, who calculates that 15.4 million homeowners—one in five of those with first mortgages—will be underwater.

Seth Wheeler, a senior adviser to Treasury Secretary Timothy Geithner, says the government is “unlikely to implement another moratorium.”

But Wheeler said the government plans to put in place some programs that encourage lenders to try some alternatives to foreclosure.

Source: Chicago Tribune, Don Lee (07/06/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Foreclsoure

Distressed Commercial Real Estate Tops $97B

The total value of distressed commercial real estate reached $97.8 billion in June, doubling every three months since December 2008, according to a new report from Delta Associates.

Foreclosures of commercial mortgages reached a 3.2 percent delinquency rate in the first quarter of 2009, up from 1.8 percent in the first quarter of 2008.

Retail properties represented the largest segment of distressed mortgages at $29.7 million.

Source: Washington Business Journal (06/26/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Foreclsoure

U.S. Increases Assistance to Foreclosure Program

The U.S. government is offering another $3.1 billion to mortgage servicing companies to encourage them to modify loans for borrowers facing foreclosure.

More than 9 percent of 45 million U.S. mortgages, or about 4 million loans, were delinquent in the first quarter of 2009, according to the Mortgage Bankers Association.

The Obama administration put up $50 billion in March as an incentive to encourage the mortgage industry to modify loans to make monthly payments more affordable. So far, however, the plan hasn’t been very effective with relatively few borrowers able to qualify.

To increase the numbers, the administration last month expanded the program to provide incentives for lenders to streamline their short-sale processes.

As of this week about 50,000 borrowers are enrolled in three-month trial modifications under the plan, the Treasury Department says.

Part of the problem, lenders say, is the volume of applicants, which has overwhelmed workers charged with modifying the loans.

Source: The Associated Press

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Foreclsoure

Fulton County 1st Time Homebuyers Program

Fulton County 1st Time Homebuyers Program.  This program is being sponsored by Fulton County.

• First Time Homebuyer – Yes
• Funds Available – Up to $15,000
• Area Served – Fulton County, ouside the City of Atlanta
• Income Limits – 80% of Area Median Income – roughly $57,360 for metro area
• Type of Program – 5 yr. deferred, 20% forgiven annually
• Borrower Contribution Amount – $250 plus $35 application fee
• Purchase Price Limit – $252,834

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Foreclsoure

Making Home Affordable Program

Making Home Affordable

On February 18, 2009, President Obama announced his housing plan designed to help 7 to 9 million families avoid foreclosure by refinancing or modifying their mortgages.  The plan also strengthens the federal commitment to Fannie Mae and Freddie Mac (the government sponsored enterprises, or GSEs).

On March 4, 2009, the administration released detailed guidance on the Making Home Affordable Program.

Here are the key elements of the Obama plan:

1.  The Home Affordable Refinance Program.  Under this program, eligible borrowers may refinance loans that Fannie Mae or Freddie Mac (the government sponsored enterprises, or GSEs) own or guarantee.  The program can help homeowner-occupants who are current in making loan payments and have loan-to-value ratios (LTVs) above 80 percent but not more than 105 percent.  Cash out refinancings are not permitted.  The program ends in June 2010.

2.  The Home Affordable Modification Program.  This is a $75 billion program with lender, servicer, investor, and borrower incentives to make it work.  The program is limited to homeowner-occupants who are at risk of default or already in default and who have loans at or below the maximum GSE conforming loan limit of $729,750 (or higher for 2-, 3-, and 4-unit properties).  Loan modifications under the program may be made until December 31, 2012.

3.  More Support for the GSEs.  President Obama also announced more support for the GSEs, including doubling of potential Treasury investment from $100 billion to $200 billion for each GSE, to maintain their positive net worth.  The plan also raises the cap on mortgages that the GSEs may hold in their portfolios by $50 billion to $900 billion.

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

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