How Foreclosures Ruin The Block

In the last few years you have seen several foreclosed homes - in the last year there has been an average of 200,000 posted foreclosures per month.  A posted foreclosure doesn't necessarily mean the owner has lost the property - it means the bank has begun the procedure.

When a homeowner walks away from their home - several things happen quickly.  The property either goes into or continues in greater disrepair.  The disrepair lowers the ultimate amount the house may be sold for because the new owner has to do more to make it livable.  It also has an impact on your property, because you can't sell your stellar home for all it's worth if the place next door is decreasing rapidly in value.

You can also expect a foreclosed home to have a chilling effect on new homebuyers because there is an instant and impactful reminder that there but for the grace of God go they....

Banks were supposed to make arrangements with homeowners in distress, but that isn't happening as quickly as advertised.  I admit that many banks have such a store of inventory, they are swimming in distressed properties.  That should make banks more willing to deal.  The nation is suffering, and we won't find a solution sticking our heads in the sand and allowing it to continue.  When Wall Street catches a cold, Main Street catches the flu, and King Drive catches pneumonia - we have to work together to solve this problem.

You, Too Can Qualify For An FHA Mortgage

A long time ago, in a land right underneath our feet, there was such a thing as the 3-5 year mortgage and balloon payments were common - wonder when that was - it all started right before the Great Depression in 1929.  Foreclosures were rampant and there were no other refinancing options for the average homeowner.


The National Housing Act was passed in 1934 to stem the bloodletting. The Federal Housing Administration (FHA) was created to regulate interest rates and mortgage terms.  They insured mortgage loans by purchasing outstanding mortgages, allowing banks to make more loans without depleting the bank's capital.  When you think about it, banks have been on welfare for years.
This allowed more people to purchase homes, and after WWII home ownership flourished.  Since it's inception, the FHA has insured over 30 million homes. Most of the urban home ownership you see is the result of the Federal Housing Authority.

The recent failure of "exotic" mortgage packages has brought things full circle and the FHA is back in vogue. It offers a safe mortgage package that won't blow up in your face or create a need to pay exorbitant mortgage payments.


Here are the general guidelines:

• Mortgage payments should be no more than 31% of your gross monthly income
• Monthly obligations overall should be no more than 43% of your gross monthly income
• Credit scores above 620 are preferred, but a score of less than that amount will be considered
• Bankruptcy filers are also eligible for FHA loans
• Federal tax debts and Student loans delinquencies will disqualify the prospective lender - so please make arrangements

Want more information - please give me a call 312-498-1138!