Presidential Candidates Foreclosure Proposals

This article:

http://news.yahoo.com/s/politico/20080403/pl_politico/9355;_ylt=Am87FaRMJNZEGbvWlOZCwA.s0NUE

outlines the three main Presidential candidate's (McCain, Clinton, Obama) proposals to deal with the foreclosure situation in the United States.

In short,

McCain vigorously opposes government intervention in the housing crisis.

Clinton proposes to create a $30 Billion housing fund.

Obama would give $10 billion of a $30 billion stimulus package to state and local governments hardest hit by the housing crisis.

Both Clinton and Obama support plan by Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.) to refinance mortgages for millions of homeowners at risk of defaulting. Services and lenders would adjust the loans, and the FHA would guarantee as much as $300 billion in mortgages.

Foreclosure Prevention Act

Senate Majority Leadar Harry Reid introduced the Foreclosure Prevention Act of 2008. This act provides more funds for non-profit credit counseling and also allows Bankruptcy Judges to modify the terms of a mortgage contract just like they are able to with any other contract. As it stands now, the primary mortgage contract is one of the few things that a Bankruptcy Judge cannot modify.

President Bush is opposing the legislation saying that it would cut into the value of homes for people who are able to pay their mortgage.

Almost 30 senators are co-sponsoring the Foreclosure Prevention Act.

Bankruptcy Reform

Did you know that bankruptcy currently gives stronger protection to those struggling with mortgages on second and vacation homes than it does to those who are at risk of losing their primary residence?

Legislation under review in Congress may change that.

Currently the bankruptcy court cannot modify the terms of a mortgage on a primary residence. The new legislation would allow the bankruptcy court to change the terms including the interest rate.

President Bush has come out as against modifying the Bankruptcy laws. It may have a tough time in Congress too.

The real opposition comes from second lien holders who fear that the legislation would wipe out their interest.

The Mortgage Bankers Association says that in the short term there would actually be more foreclosures as lenders try to file ahead of the changes in legislation rather than waiting and working with the debtor.

In a statement this weekend, Senator Barack Obama, who is running for President, said he supports modifying bankruptcy legislation to protect homeowners.

Should You Attend a Foreclosure Fair?

Lenders are (only barely) now waking up to the tidal wave of foreclosures that are happening. One solution is the foreclosure fair.

A foreclosure fair is a place where lenders and refinancers set up tables to help mass numbers of homeowners at once.

They are very popular, as this article reports:

http://www.cnn.com/2008/LIVING/wayoflife/03/26/foreclosure.fairs.ap/index.html?section=cnn_latest

Should you go to one?

Seeing as its a start for the banks to communicate in this fashion, it can be a good thing. Bring all of your paperwork with you and be prepared to stand in long lines.

Then, you've got to stay on top of the bank. Make sure you fulfill your obligations made at the fair -- and make sure the bank does too!

2.5 Million Foreclosures in 2.5 Years

In the next two and a half years, it is estimated that 2.5 million homes will be foreclosed on! That comes out to about 25,000 homes every single day!

But that's really just the tip of the iceberg. For every home that the bank takes back in the foreclosure process, there are others that have been bought at a short sale, had a Deed in Lieu arrangement made, or other financing workouts.

The mortgage crisis truly is staggering when you look at the number of lives that are going to be destroyed as a result of predatory lending and an inability on Washington's part to devise a solution to this mess.

McCain doesn't believe in "mortgage bail-out"

Republican Presidential nominee John McCain doesn't believe in a mortgage bail out.

"I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers," McCain said. "Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy."

Democrats have attacked McCain as not having the economic experience to lead a country on the brink of recession.

For the full story:

http://news.yahoo.com/s/ap/20080326/ap_on_el_pr/mccain_economy;_ylt=Apwo6MWBl_LyZyax0xa4RAWs0NUE

5 Metro Areas Hit Hardest By Foreclosure

According to Forbes Magazine, the five metro areas hit hardest by foreclosure are:

1. Detroit
2. Las Vegas
3. Phoenix
4. Riverside, CA
5. Los Angeles

Hardest hit is defined as the most houses in foreclosure with negative equity.