About Me 0015: foreclosure homes

After investigations found that abusive practices were widespread in the mortgage industry, regulators clamped down on some of the worst practices. But Paul Kiel at ProPublica finds that serious problems continue:

Last month, the [California Reinvestment Coalition] surveyed 55 foreclosure-avoidance counselors throughout the state. Collectively they serve thousands of borrowers every month. Almost all of the counselors, 94 percent, reported having worked with clients who'd lost their homes while under review for a modification. About half of the counselors reported this happened "often." This year's totals, which are due to be publicly released next week, are higher than those in the group's survey last year.

Federal banking regulators have put some important protections into place: banks will no longer be able to sell homes out from under owners who are being considered for mortgage modifications, and foreclosure will have to stop once a modification is approved. (Can you even believe that wasn't already a requirement?) But:

While those are necessary requirements, regulators took a "huge step backward" by not explicitly forbidding banks from pursuing foreclosure at all until a final decision has been made on a mortgage modification application, said Alys Cohen of the National Consumer Law Center.
The administration's mortgage modification program, which offers incentives to encourage modifications, has that requirement. But that program is voluntary for the banks and has been hobbled by lax oversight. What's more, over two-thirds of modifications occur outside of the program.

Federal regulators have the power to require all banks to make a decision on a modification application before moving to foreclose, but they've simply chosen not to.

Meanwhile, Kiel finds, homeowners are still having their homes sold as they go through the mortgage modification process, believing that they are doing what they need to do to save their homes. Neither is that the only way people continue to be victimized by mortgage companies. A Florida man lost all of his belongings when a mortgage company went to the wrong address; apparently that mistake isn't isolated, either.

R. Kelly is an incredible R&B Grammy award-winning artist known for everything from “I Believe I Can Fly,” which was featured in the hit movie Space Jam, to ”Ignition (Remix).” However, as he faces foreclosure on his Chicago mansion he himself may be rehearsing the lyrics “If I Could Turn Back the Hands of Time.”

Kelly has reportedly avoided payments on this multimillion dollar mansion for over a year—a decision that may be catching up to him now. However, something just does not seem right about Kelly’s foreclosure—he is financially stable and just completed a very successful tour last year.

R. Kelly’s situation seems to mimic that of other celebrity situation. The news and popular real estate blogs are filled with information on celebrity foreclosures. However, these foreclosures even include the successful celebrities that continue to bring in a surplus of income due to high-profile tours and lead roles in popular films. Clearly, they are receiving enough income to pay their mortgage payments—aren’t they? Why, exactly, are these hot celebrities refusing to pay their mortgage? Simple: Because they can.

When it comes to celebrity foreclosures it appears to be one of two things. One: the celebrity is living outside of his or her means and banking on future success to successfully pay their mortgage payments. However, as they leave the spotlight they are struggling to make ends meet. Or two: instead of paying mortgage payments they splurge on new cars, luxury vacations, and other perks reserved for the rich and famous. In the first scenario these celebrities are like many other Americans facing foreclosure—they simply did not alter their lifestyles in time to account for the recession. In the latter situation, these celebrities are using the money to pay for other ego-centered desires—to have the newest and best of everything. The second category is exactly where R. Kelly resides.

In the end, many of the celebrities either come up with the money to pay off their delinquent mortgages (as is probably the case with Mr. R. Kelly), while others simply sell their homes capitalizing on their fame and therefore appealing to their wealthy fans. R. Kelly may be facing foreclosure, but the chances of him actually losing his home to foreclosure are slim to none. Rest assured, R. Kelly has more than enough money to make his mortgage payments and is simply living the “new” lifestyle of the rich and famous.

About Me 0015

Monday 1 August 2011

foreclosure homes

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