Erica Muller

Filing foreclosure used to be an embarassing and desperate attempt to save your financial behind however with these record numbers it seems to be becoming an epidemic. Just like our great grandparents lived through a historical event in history, the Great Depression, we are now living through a time that will forever be written and discussed in our childrens history books. They say history repeats itself, I'll leave you to be the judge on that one.

#1. California with a whopping 101,724 filings in August
#2. Florida Trailing Behind at 44,000 filings in August
#3. Arizona 14,333 filings in August
#4. Michigan 13,605 filings in August
#5. Nevada wit a surprising 11,706 filings in August

(Information Courtesey of RealtyTrac)

I was very surprised to see Michigan surpass Nevada witrh filings. Nevada was a very popular state for real estate specultaion back in the boom Many of the same investors that inflated Florida's market also inflated Nevada as well.

By: Erica Muller www.MySunnyHolidayVilla.com

Today is a new day for borrowers in danger of losing their homes to foreclosure. Today is the first day that the Housing and Economic Recovery Act of 2008 goes into effect. This act was designed to motivate lenders to work with the consumers in keeping their homes. In the past, despite the current economic crisis many lenders have found themselves in, they have not been so willing to work with the borrowers to help them keep their homes from foreclosing. That all hopefully stops today with HERA.

As the government recognizes the enormous load of future foreclosures that are coming and the repercussions that brings to our economy they have decided to step up to the plate. According to HERA (Housing and Economic Recovery Act) the Federal Government will now be insuring all new, reduced 30 yr fixed mortgages in attempts to motivate lenders to reduce struggling borrower's loan amounts of up to 90% of the property value. In other words, the bank slashes your mortgage amount in half, you get to keep your home, lower the mortgage payment and in return the bank saves itself from not only the whole costly foreclosure process but now has a federally insured loan and a paying customer. It's a win-win for everyone.

Though it would be ideal, not everyone is eligible for this perk of HERA. In order to qualify you cannot have been convicted of fraud, certify that you have not intentionally defaulted on an existing mortgage and did not obtain the loan fraudulently (you wouldn't believe how many borrowers fudged their applications to get a loan), your mortgage payment must exceed 31% of your monthly income as of March 01, 2008 and last but not least you must occupy the home as a primary residence and the home must be listed as so. Sorry second homeowners and investors but you don't make the cut!

You should know that lenders are NOT required to participate in this program though it would be in their best interest to do so. Another important factor to understand is that if your lender does agree to this and your loan amount is reduced you are not allowed to take any second mortgages within the first five years. You must also split 50% of your equity with FHA when you sell it and there is holding period of which I am not aware of how long. Not a bad trade-off if you ask me.

All in all, this Act is a step in the right direction. It's the strong motivation the lenders need to help homeowners keep their homes. I applaud the government for stepping up and passing this act. I can't wait to see the positive effects it has on our economy in the future. If you're interested in finding out more about the HERA program you can visit www.HUD.gov.

By: Erica Muller www.MySunnyHolidayVilla.com

Washington Mutual, one of the largest bank chains in the United States, has finally sunk under it's enormous load of mortgages that went sour. This is now the largest bank failure in U.S. history. The Federal Deposit Insurance Corp. seized the bank on Thursday and the thrift's banking assets were then sold to JPMorgan Chase & Co. for US$1.9 billion. What makes this story so intense is that WAMU was just one of your everyday savings and loan institutions that was obviously a bit too lax on their lending standards like many others.

I fear this may be the first of many banks to follow suit. The last time we saw a bank even close to this size go under was back in 1984 when Continental Illinois National Bank failed with assets of $40 billion followed second by IndyMac, which was just shut down in July of this year, with $32 billion in assets. WAMU's assets were valued at $310 billion so you can see the magnitude of this situation. The good news is that because JPMorgan swooped in and saved the day the FDIC's insurance fund (which could have been depleted) did not have to cover the funds that could have have been lost.

What does all this mean to the WaMu customers? According to the Canadian Press Sheila Blair, FDIC chairman told reporters, "For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks. For bank customers, it will be a seamless transition." Until today, dismayed depositors have been pulling almost a tenth of their money out over the past 10 days, regardless of the FDIC guarantee of all deposits up to $100,000. All credit card debts and deposits will remain the same but will just be paid to JPMorgan.

It's pretty clear that the U.S. economy is in peril. With imminent danger of a recession looming, financial institutions going under, the rising unemployment rate and increased home foreclosures when will the government finally make a descision on their proposed $700B bailout? Whether it's a bailout or not I sure hope history does not repeat itself and that our American consumers, banks and lending institutions learn from their mistakes going forward.

Sound the trumpets and beat the drums the prodigal landlord returns to Summerport! Back from his four month getaway in Turkey the runaway landlord is back and apparently in the governments good favor. I spoke with his attorney's office who is handling all of his foreclosures and they said he is in the works to work out a deal with the bank to keep all of his homes that were previously going into foreclosure. The foreclosures have been placed on hold just a few weeks shy of the property auction dates on his homes. Now that's what I call great timing.

What does this mean for the tenants who have not been paying their rent? This could result in one of the most unethical, slimy attempts to make a recovery I have ever seen. Depending on what He works out with the bank, the landlord may be entitled to not only start collecting and raising rents again but also receive back-rent. That could add up to thousands of dollars for some of the tenants as I seriously doubt they were stashing away the free money they were saving every month.

In any event, it would be a good idea for the tenants to start regrouping and considering their options. Many of the tenants are bitter and feel abused by runaway landlord for just taking off with their security deposits and leaving them high and dry. They may want to entertain the idea of trying to purchase a home in the area or finding a more reliable landlord. Of course when you take into account the whole moving expense and inconvenience that may be enough motivation to work something out and stay.

It would be in the landlords best interest as well to try and make amends with his tenants. Trying to collect back-rents and raising rents on his current tenants may cause them to engage in a nasty legal battle that will end up costing him more in the end. I know some of the tenants are talking about a possible class action type suit against him which would be a pretty rough start to his new life here. There is always the possibility that the landlord may just pick up where he left off, keep the rents the same and renew the leases. That would be the ideal solution for everyone.

If you are trying to sell your home in Summerport with little or no luck at all this may just be your window of opportunity to reach out to many of these burned tenants who will be looking for a place to go. Some will want to buy and others rent but either way you have a flood of new prospects literally right next door. May I suggest considering renting your home if you already have another place to live? Chances are it will rent quickly right now, just try to stick around and don't flee the country anytime soon if you want to keep collecting rent.

By: Erica Muller
www.MySunnyHolidayVilla.com

Come one come all to the most overgrown, abandoned street in Summerport. I like to call it Foreclosure Alley and it's an investors smorgasbord. On Foreclosure Alley you will find homes by the dozens that are going into foreclosure. If you take a drive down the street you will see all the yards that are overgrown and the homes that are abandoned. Many of them were the victims of the runaway landlord I previously blogged about and many of the homes are from different individual investors that just couldn't wait it out.

Now is the time to pick these babies up! Many of these homes are on the golf course with beautiful views and boast almost 3,000 sq. ft. of living area if not more. Most of these homes will not have a real estate sign out front though there are a few that do. You have to drive by and view the homes individually to see which ones are foreclosing. I've never been one to cause hype or sing some sleazy sales pitch but this neighborhood is the deal of the year. I really believe that. With a Windermere address and a community in such a hot location these homes are a steal if you can snag them under 200K.

You know what they say. . . Finders Keepers!