Massachusetts Bankruptcy Attorney – Home repossessions at highest level in months – Weymouth Bankruptcy Attorney
September 19, 2010
U.S. home repossessions spiked in August to highest level since the start of the U.S. mortgage crisis. The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday Sept. 16, 2010.
In a not-so-stunning report, RealtyTrac has reported tht banks repossessed 95,364 properties in August, which is up 3% from July. August 2010 numbers are an increase of 25% from August 2009. August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. Banks have been stepping up repossessions to clear out their backlog of bad loans.
With such growing numbers of foreclosure, the housing market recovery could stumble given the continuing high rate of unemployment, the sluggish economy and lack of consumer confidence. Additionally, home sales nationwide have collapsed since the federal homebuyer tax credits expired in April.
More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year.
Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures. 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 has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s mortgage-relief program have fallen out.
The program, known as Making Home Affordable, has provided permanent help to about 422,000 homeowners since March 2009.
September 18, 2010
On August 4, 2010, Senator Debbie Stabenow (D-MI) introduced the Americans Want to Work Act. This legislation would create an additional tier (Tier 5) of unemployment benefits for those (known as the 99ers) who have exhausted their unemployment insurance benefits. The bill is cosponsored by Senators Charles Schumer (D-NY), Harry Reid (D-NV), Dick Durbin (D-IL), Carl Levin (D-MI), Bob Casey (D-PA), Chris Dodd (D-CT), Sherrod Brown (D-OH), Jack Reed (D-RI), and Sheldon Whitehouse (D-RI).
If passed The Americans Want to Work Act will provide 20 additional weeks of unemployment insurance for individuals in states with an unemployment rate of 7.5% or higher. This new Tier 5 would benefit people who have exhausted their weeks of all available benefits. In high unemployment states such as Massachusetts the limit is 99 weeks. In order to receive this tier, individuals would still need to meet regular unemployment insurance law requirements.
In a strong economy, state governments provide layoff victims 26 weeks of benefits. In normal recessions, states and the federal government partner to provide an additional 20 weeks. To fight the worst recession since the Great Depression, Congress in 2008 and 2009 passed several measures to provide up to 53 additional weeks (for a total of 99 weeks) of federally-funded benefits, broken into four “tiers.”
The National Employment Law Project applauded Stabenow’s bill. “NELP commends Senator Stabenow and her co-sponsors of the Americans Want to Work Act both for being champions of those hardest hit by the recession, but also for keeping the focus on the most important thing — getting those who have exhausted their benefits back to work,” said NELP’s Judy Conti in a statement to HuffPost. “We need to support these workers and their families both in their efforts to stay afloat while unemployed through no fault of their own, but equally importantly, in their efforts to find work and rebuild their lives after the devastation of such prolonged unemployment.”
The best course of action to help get Tier 5 unemployment benefits passed is to contact your elected officials and ask them to support a long term extension of unemployment benefits.
September 12, 2010
You’ve probably read that you should pay off high interest rate credit card debt first. From a financial standpoint, that’s true. It costs more to carry a balance on a high interest rate credit card. The longer you take to pay off the card, the more money it costs you. Paying off high interest rate debt saves you money and usually lets you pay off the debt faster.
Here’s an example to demonstrate:
Let’s say you have two credit cards.
1.Credit Card A has a $3,000 balance and a 22% interest rate.
2.Credit Card B has a $1,500 balance and a 12% interest rate.
Let’s also assume you can spend $150 a month toward these debts. If you pay off Credit Card A first, you’d pay a total of $1283 in interest and it would take 39 months to become debt free. On the other hand, if you paid off Credit Card B first, you’d pay a total of $1764 in interest and it would take you 42 months to become debt free.
Paying off the high interest rate debt saves you $481 in interest and you’ll pay off the debt 3 months sooner.
Notice I said paying high interest rate debt makes sense from a financial standpoint. Dave Ramsey, millionaire-gone-bankrupt-turned-millionaire, suggests paying off smaller debts first regardless of interest rate. He argues that when small debts are paid off sooner, you remain motivated to pay off the next debt and the next, until you’re debt free.
It’s true that the smallest-balance-first method let’s you pay off some debts sooner in the beginning. In our example above, under the highest-interest-rate-first method, you’d have the first card paid off in 31 months. Under the smallest balance first method, you’d have the first card paid off in 14 months. But remember, it takes you longer to pay off the debt completely under the smallest-debt-first method.
When you’re ready to pay off your debts you have to decide if you need the motivation from paying off smaller debts at the expense of spending more money on interest.
September 9, 2010
A lender in a foreclosure is the entity holding a borrower’s mortgage loan and will most times want to foreclose on a property to protect its own interest. If the borrower falls behind on payments, a foreclosure sale will sometimes allow the lender to recoup some of the credit that they extended to the borrower.
The lender is obliged by law to inform the borrower of their intent to conduct a foreclosure sale on the property. The lender’s role in the foreclosure is to track your timely payments on your mortgage, and contact you should you fall behind. The lender involved in the foreclosure will have the information on what is due in order to stop the foreclosure process. If you receive a foreclosure notice from your lender (or someone acting on your lender’s behalf), you should call your lender right away. The longer you wait, the more your options diminish and the closer you get to losing your home.
The further along the foreclosure goes; the lender will also be the person to inform you of the pending sale date. They will do this themselves or, more typically, through a trustee.