Georgia is third in the nation, with 13.5 percent of mortgages one or more payment past due as of December 31st, according to the Mortgage Bankers Association’s National Delinquency Survey. Florida and Nevada came in at #1 and #2.

The MBA said the drop in the 30-day delinquency rate is “a concrete sign” that the end of the mortgage crisis may be near. That’s important because mortgages that are 30 days late generally serve as a leading indicator of serious delinquencies and foreclosures.

The U.S. Department of the Treasury recently reported while more than 1 million U.S. homeowners have started the process of modifying their home loans under the government’s Home Affordable Modification Program (HAMP), only 116,000 have actually had their mortgages modified as of last month.

In Georgia, there have been 33,059 active trial loan modifications through January. Of them, 4,508 have been permanently modified.

Atlanta is among the top 15 metro areas for HAMP activity, accounting for 3.2 percent of overall HAMP activity. The city had 30,285 active trial loan modifications through January. Of those, 3,692 were permanently modified.

If you or someone you is having financial issues and concerned about foreclosure, contact us for a free report on Avoiding Foreclosure.

That’s right, 28%. Not a good number.

More than 441,500, or 28 percent, of all residential properties with mortgages in Georgia, were in negative equity at the end of the fourth quarter, according to a new report. The report was prepared by Santa Ana, Calif.-based First American CoreLogic Inc., a real estate information company.

Negative equity, also commonly known as underwater or upside down, means that borrowers owe more on their mortgage than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

More than 11.3 million, or 24 percent, of all residential properties in the United States with mortgages, were in negative equity, up from 10.7 million and 23 percent at the end of the third quarter. The aggregate dollar value of negative equity was $801 billion, up from $746 billion in the third quarter of 2009.

The net increase in the number of negative equity borrowers in the fourth quarter was 620,000, with the largest percentage increases occurring in Nevada, Georgia and Arizona.

“Negative equity is a significant drag on both the housing market and on economic growth. It is driving foreclosures and decreasing mobility for millions of homeowners,” said Mark Fleming, chief economist with First American CoreLogic, in a statement.

First American CoreLogic’s data includes 47 million properties with a mortgage, which accounts for more than 85 percent of all mortgages in the United States.

Having negative equity does not mean that your home will be foreclosed, but it does indicate homes that are “under-water” and if the homeowner is having financial difficulties, foreclosure proceedings can happen pretty quickly.

If you or someone you is having financial issues and concerned about foreclosure, contact us for a free report on Avoiding Foreclosure.

Apparently someone is starting to realize that the government’s Home Affordable Modification Program (HAMP) is not very effective. The Obama administration is considering expanding their attempt to to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected under the program.

Currently, lenders can begin foreclosure proceedings on any loan that hasn’t been submitted for HAMP eligibility. In the state of Georgia, it only takes one month to foreclose on a property, so slowing down the process would allow more time for the banks to consider alternatives for Georgia homeowners.

Under current HAMP rules, foreclosure litigation can proceed while borrowers are under review for the program or even in a trial modification.

The proposed changes would prohibit lenders from initiating new foreclosure actions before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan.

About 89 percent of outstanding residential mortgage loans are covered by the voluntary HAMP program.

About 2.82 million U.S. homeowners lost properties to foreclosure last year and 4.5 million filings are expected in 2010, according to industry sources.

The Treasury proposal would require all borrowers who are 60 or more days delinquent on their mortgage to be sought out for participation in HAMP. Mortgage companies would need to try to contact the borrower at least four times by phone and twice by certified mail over 30 or more days before going to foreclosure.

Under current Treasury policy, foreclosure proceedings are only halted when a borrower receives a permanent modification plan.

Freddie Mac, one of the two big mortgage finance companies taken over by the government, announced earnings today. It reported a net loss of $6.5 billion, which is great compared to a net loss of $23.9 billion in the same quarter a year ago, but a loss is a loss. So we’re talking semantics when a $6.5 billion loss is an improvement.

For the full year, Freddie Mac posted a $21.6 billion loss, less than half the $50.1 billion in lost in 2008.

Freddie Mac (NYSE: FRE) says it ended the quarter with a net worth of $4.5 billion and, as a result, did not require additional funding from the Treasury Department. It was the third straight quarter Freddie Mac did not need to tap the Treasury Department’s lifeline.

But all may not be well in Smallville. Freddie Mac CEO Charles Haldeman Jr. pointed out the risk of a potential large wave of foreclosures on the horizon.

The likelilhood of a rise in foreclosures is a very real issue and as loan modifications continue to have almost no impact, the only likely solution will be more short sales. If you find yourself in need of assistance, our team of Certified Distressed Property Experts are here to assist you. Be sure to contact us for assistance. This is a very real problem and we’re here to help.

Federal and mortgage industry officials are increasingly looking for ways to get distressed borrowers to leave their homes voluntarily, without going through the expensive foreclosure process or a messy eviction.

Citigroup, for instance, plans to announce a pilot program on Thursday that would allow delinquent borrowers who don’t qualify for or decline mortgage relief the opportunity to stay in their homes without making payments for up to six months before turning over the keys, in return for keeping the property in good condition.

Other initiatives have also emerged for borrowers likely to lose their homes. Fannie Mae and Freddie Mac, the mortgage financing companies, developed programs allowing former homeowners to become renters after a foreclosure or other proceedings.

As part of its federal foreclosure prevention program, known as Making Home Affordable, the Treasury Department announced late last year that lenders would be eligible for $1,000 in exchange for allowing borrowers to sell their home in a short sale.

In such deals, the borrower sells the home for less than the outstanding mortgage, and the lender forgives the difference.

Moody’s Economy.com has forecast that the number of short sales and transactions in which borrowers surrender their deed in lieu of foreclosure will increase more than 50 percent, to about 490,000, this year. That is just a fraction of the 1.9 million homeowners Moody’s has forecast will lose their homes to foreclosure this year, up from 1.7 million last year.

Forecasts are coming in, that despite mortgage foreclosure filings in the country dropping in January, projecting  a surge in foreclosures due to the ongoing impact from unemployment rates and uncertainty over the economy.

One in every 409 U.S. housing units received a foreclosure filing in January, Irvine, California-based RealtyTrac said in its January 2010 U.S. Foreclosure Market Report.

Foreclosures are definitely the biggest threat U.S. housing market recovery.

Many lawmakers, advocacy groups and housing experts say the government’s Home Affordable Modification Program, or HAMP, has fallen short because of its failure to adequately address negative equity, or “underwater” mortgages.

Negative equity has been one of the biggest banes of many homeowners, making many unqualified for home loan refinancing and preventing some from selling their homes. Borrowers in negative equity are more prone to defaults and foreclosures.

Slowing the foreclosure rate is a key step in the recovery of the real estate market and the overall economy. The foreclosure crisis forced the federal government and several states to come up with plans to prevent or delay the process to help delinquent borrowers.

With continued high unemployment and depressed home prices, expect to see foreclosures continue to rise in 2010. A record 3 million U.S. homes are projected to be repossessed by lenders this year.

In 2009, there were 2.8 million foreclosures according to RealtyTrac and 4.5 million foreclosure filings ares projected for this year. There were 3.96 million filings in 2009.

Many are projecting this year to be the peak in the foreclosure wave. Despite efforts by lenders and pressure by the government, initiatives to keep people in their homes has failed.

As reported previoulsy, lenders have permanently modified such a small number of home mortgages, that the total is less than 1% of the 4 million loans targeted under the Obama administration’s foreclosure prevention plan through November, the U.S. Treasury Department said last month.

Fewer than half of the 3.2 million homeowners estimated as eligible for mortgage relief by the Treasury actually qualify, according to Herb Allison, assistant secretary for financial stability.

Besides pressuring lenders to do more loan modifications or accept short sales, the government has also attempted to stimulate the housing market with the extension of the $8,000 tax credit and the expansion for repeat home buyers worth a $6,500 tax credit.

This tax credit is due to expire on April 30th, which is about the same time that it in anticipated that the Fed will run out of funds to continue their purchase of mortgage bonds (which has held mortgage rates at very attractive, historically low levels). This is likely to add additional pressure to the market.

Georgia had the seventh-highest rate in the US at 2.68 percent of households receiving a foreclosure filing, which equated to 106,110 filings.

If you’re delinquent on your mortgage payments, contact us today to discuss alternatives to foreclosure. We are a team of Certified Distressed Property Experts and are trained to assist you with your needs.

Foreclosure prevention efforts need to become vastly more effective or housing prices will resume their tumble, according to a new report by Credit Suisse analysts.

The industry can expect to see either housing stabilization or “a renewed leg down” in the second half of 2010, depending on the success rate of foreclosure prevention efforts, global financial services firm Credit Suisse said in a research note this week.

“We estimate that roughly 3.2m foreclosures must be prevented in 2010 for home prices to stabilize or potentially tick up,” researchers said. “This is an uphill challenge, but a combination of current government programs and their future iterations offer a narrow path for success.”

The report concludes that some 4.2 million homes are currently estimated to be heading into foreclosure next year and that 3.2 million foreclosures in all need to be prevented to stabilize the housing market. For those doing quick math, that comes out to about 75% needing some sort of modification, short sale or other foreclosure prevention solution.

So far, government and private success rates have been nowhere close to that.

About 31,000 homeowners have received permanent relief under the Obama administration’s mortgage modification program. Part of the administration’s $75 billion effort, the plan aims to help troubled homeowners modify their mortgages into sustainable monthly payments relative to income. About 700,000 homeowners are enrolled in three-month trials.

The administration said the Home Affordable Modification Program (HAMP) would help three to four million homeowners, but that’s their goal through 2012. A government watchdog has publicly questioned numerous times whether that’s achievable, given the performance to date and the plan’s design. For example, the plan requires that homeowners have an income. With 10 percent unemployment, many experts have questioned whether the program can help the unemployed stay in their homes.

“Current performance statistics on HAMP are quite disappointing in the above context,” the Credit Suisse report notes. “However, multiple rounds of government attempts to achieve foreclosure prevention for those who fall through trial mods are likely to keep volume of foreclosure sales under check.”

The analysts argue that there are early signs of recovery. Thanks to a decline in foreclosure sales from their winter highs, the homebuyers tax credit, and “record high affordability levels,” housing prices have begun to stabilize.

But for a recovery to take hold next year, foreclosure sales will have to decrease even more. The analysts note that if foreclosure sales represent some 25-30 percent of all home sales next year, a decline from current levels, then home prices could see an uptick.

“We anticipate multiple rounds of government attempts to achieve foreclosure prevention for those who fall through trial mods by lowering the bar or directing them towards alternative foreclosure prevention programs,” they wrote.

Underscoring the importance of preventing foreclosures, the Credit Suisse report notes: “Home price stabilization has primarily resulted from decline in share of foreclosure sales.”

If those start to creep up, this year’s gains in stabilizing the housing market could evaporate.

Last week, the Obama administration issued their first monthly reports on mortgage loan modifications, which is really intended not to show America that the government is watching, but more of trying to publicly disgrace banks into making a concerted effort to fix the issues that they so aptly created. As we mentioned in the article, “Who to Believe?“, this will be part of the administration’s strategy to ensure the banks work to help keep struggling Americans in their homes.

The initial report included more than 30 lenders, but noted two banks, Bank of America and Wells Fargo, as having a dismal rating, which is concerning since they have received large sums of taxpayers’ bailout money. The rescue money that was spent on the banks was expected to encourage greater lending and more loan modifications.

The report indicated that Bank of America only extended modification offers to 13% of the nearly 800,000 mortgages that were at least 60 days late on payments and potentially eligible for a modification. It began trial loan modifications with only about 4 percent, or 27,985 borrowers.

Wells Fargo led the banking sector’s voluntary loan-modification program during the Bush administration’s efforts. However, the initial report indicated that Wells had serviced 329,085 mortgages that were 60 days late, it extended offers to only 38,673 homeowners, or about 12 percent of those eligible, and started trial modifications with another 20,219 loans, about 6 percent of the eligible.

I’m sure we will be getting the bank’s interpretations of this report and their own PR spin along the way. So the question ultimately will be whether the Obama administration’s plan can pick up pace are start making real improvements or will it continue to flounder.

With the new short sale incentives being introduced, but not taking effect until April 30th, it will be interesting to see what happens in the coming months. If you are an Atlanta home owner and you are behind in your mortgage payments, be sure to contact us . We’ll be glad to discuss your situation and offer solutions and a step-by-step strategy to avoid foreclosure.

The U.S. Department of Housing and Urban Development (HUD) recently released a letter to lenders covering short sales and short payoffs. Mortgagee Letter 09-52 is effective immediately and provides guidance to lenders regarding borrower eligibility when pursuing a new Federal Housing Administration (FHA) mortgage.

In a nutshell, FHA guidance included:

Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on their principal residence simply to:

• Take advantage of declining market conditions, and
• Purchase, at a reduced price, a similar or superior property within a reasonable distance.

Borrowers are considered eligible for a new FHA-insured mortgage if:

• They were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and
• The proceeds from the short sale serve as payment in full.

Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances, such as a short sale being due to the death of the primary wage earner.