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Are loan modification and foreclosure alternatives working in your market?

Flickr user Jacob Ruff

According to a RealtyTrac 2009 roundup out Wednesday, more than 2.8 million properties nationwide were the subject of foreclosure filings in the year – up 21 percent from 2008.

And 2.21 percent of all housing units (one in 45) were the subject of some foreclosure activity, RealtyTrac said.  That’s nearly four times the 2006 pace.

Analysts cited by Bloomberg and other news organizations have said they expect foreclosure rates to be even worse in 2010 as mortgage lenders work through a backlog of delinquencies and many borrowers remain jobless.

Some economists are predicting a deluge of commercial defaults this year as well.  This National Association of Realtors report from November indicates challenges in a number of sectors.  Note that one of the sources is the niche professional group The Society of Industrial and Office Realtors;  it’s site will link you to regional chapters where you might be able to cultivate some savvy sources.

Critics are increasingly vocal about the tepid results from various Obama administration loan modification and foreclosure alternative programs, as this AP story points out.

The New York Times goes further, reporting that many homeowners have wasted dollars in fruitless attempts to stave off foreclosure, and that loan problems have hurt credit scores. That’s a story in and of itself. Overall, the Making Homes Affordable initiative deserves a local check-up; the Fannie Mae site offers some resources and FinancialStability.gov offers progress reports.

I’ve also heard grumblings from local mortgage bankers that non-delinquent homeowners trying to refinance in order to stretch loan balances over longer terms to stay current have been stymied by lower appraisals – and there are no bailout programs for them.  I’d really like to see a home ownership story focusing for a change on this group.

Another program that was slow to get underway was the Deed For Lease program Fannie Mae launched in November; the intent was to let foreclosed homeowners become tenants in the same dwelling when the lender took over the deed.  No word on results but it would be a worth a check with some of your area’s major lenders.

Another angle: How are bottom-feeders faring with the foreclosures they snapped up last year.  Are those properties being fixed up and flipped, turned into rentals or standing vacant?  Some of the bargains are astounding; one of my former coworkers jumped on a quaint bungalow in a very respectable neighborhood for $9,000 cash on the barrelhead.  She’s fixing it up to re-sell.

In Economy, Featured, Personal finance, Story ideas.

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