More Homeowners in Trouble

The Mortgage Bankers Association released data on Friday that shows that a record 10% of U.S. homeowners are now behind on their mortgage payments or are already in foreclosure. Attempting to find a positive spin in the data, the MBA noted that during the third quarter, the percentage of loans entering foreclosure remained the same as the second quarter.

They attribute this “drop” to the homeowner assistance programs that have begun to take effect. The fact remains that foreclosures in 2008 will be 260% higher than an average year. Although the worst of the subprime mortgage foreclosures may be easing, foreclosures resulting from the current recession and rising unemployment point to a rocky road still ahead for the housing markets here in Colorado and nationwide.

Solutions to this foreclosure crisis will take require more than waiting for the Federal Government to bail us out. In addition to Federal, State and local governments, a grass roots movement of non-profit agencies, real estate and mortgage professionals and concerned citizens all working together are the key to defeating the foreclosure monster.

Giving Back Feels Good

One of my most memorable teachers from high school was Mr. McPherson. He taught U.S. Government, a required civics class. For most high school kids this would usually be a rather dry subject, but Mr. Mac made it come alive and his was always a popular class. I began to appreciate the amazing serendipity and hard work that went into the formation of these United States of America.

It is impossible to thank so many who have given so much for over 232 years to make this country the great nation that it is. But what we can do to honor their sacrifice is to participate in democracy and that means to vote. You may be tired of this long election cycle and all the mud-slinging that has gone on. You aren’t alone with that sentiment. Now is the time to put that aside; think of a teacher, mentor or relative that inspired you and take the time tomorrow to go vote. Regardless of election outcomes, you’ll feel good about yourself for participating in the democratic process. Go and vote!

Good News for Homeowners

On Friday, October 31, just as many youngsters were preparing to go trick-or-treating for Halloween candy, JP Morgan Chase (JPM) offered troubled homeowners a very special treat. The report of good news was actually three announcements in one. Each on it’s own should provide significant relief. Cumulatively, JP Morgan Chase anticipates helping up to 400,000 families over the next two years.

Immediate relief will come to homeowners as JPMorgan will issue a 90 day moratorium on placing any new homes into foreclosure. We would encourage them to also extend this respite to homeowners that already have the foreclosure clock ticking.

The number of American homeowners falling behind on their mortgage payments continues to escalate. At the end of the third quarter 2008 more than 2.2 million homeowners were more than 60 days delinquent. This is double the number of mortgage lates from just one year ago. JPMorgan will be hiring 300 additional loan counselors to help restructure mortgages and assist homeowners that want to hang onto their homes.

Finally, JPMorgan Chase is doing away with the pay option arm. This had been a particularly popular and profitable mortgage product with Washington Mutual (WaMu) before they were acquired by JPMorgan on September 25. More than any other mortgage product; the pay option arm was responsible for the mortgage meltdown of a year ago which contributed to the current financial crisis on Wall St.

We applaud JPMorgan Chase for their bold moves in attempting to turn around the foreclosure tragedy that is playing out across America.