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| Tuesday, February 9, 2010 |
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Foreclosures continue
Published April 6, 2009
The numbers are staggering, nationally and locally.
Home foreclosures or those in danger of being foreclosed are at a record high all across the United States. Alabama and Jackson County aren't insulated from the economic woes that have gripped the nation for well over a year now.
As of the end of March 3,854 Alabama homes were in foreclosure. At least 32 of those homes are located in Jackson County.
With unemployment climbing, Jackson County's rate was 11.4 percent in February; the number of distressed homeowners is likely to increase. According to foreclosure.com, 54 Jackson Countians are currently involved in bankruptcy proceedings.
Even though lenders have helped an increasing number of borrowers become current on their payments the number of foreclosures continues to rise. According to national reports almost 250,000 homeowners received modifications in their mortgages in February. Many lowered mortgage rates, lengthened loan terms or reduced the principal owed.
But it hasn't helped stem the tide of people in danger of losing their homes. Hope Now, a coalition of lenders, investors and advocacy groups formed in 2007 with the support of the U.S. Department of the Treasury and HUD, notes that the foreclosure process began on approximately 460,000 homes in the first two months of 2009. Another 155,000 homes were repossessed during the period.
Those who have missed several house payments are in danger of foreclosure proceedings. Unmanageable credit card debt, an inability to pay all your monthly bills on time, job loss, divorce, unforeseen medical expenses and many other reasons can put a homeowner on the path to foreclosure.
Lenders want to help. Even if you miss a payment or two it is a good idea to stay in contact with your lender to discuss your situation and options available to prevent or delay foreclosure proceedings. They don't want your home, just their money.
The IRS is allowing some additional tax breaks for homeowners in an effort to help slow the foreclosure rate.
For those who don't itemize property taxes can be deducted for the first time ever based on the amount of state and local real-estate taxes paid in 2008. The maximum deduction is $500 for individuals and $1,000 for joint filers.
Others can possibly qualify for a first-time home buyer's credit of up to $7,500. It is available on homes bought between Apr. 9, 2008 and June 30, 2009. It is repaid each year over a 15-year period as an additional tax when you file your return.
Itemizers can usually deduct: mortgage interest, real estate taxes, points paid at closing, and qualified mortgage insurance premiums. Tax credits are also available for energy-saving improvements such as solar electric, solar water heating, fuel cells, small wind energy and geothermal equipment. Credits for insulation, energy-efficient windows, exterior doors, etc. is set to return in 2009.
The U.S. Department of Housing and Urban Development also offers help to those in risk of foreclosure. In addition to offering counseling services and direct help negotiating with lenders HUD offers some tips to prevent foreclosure:
• Don't ignore the problem
• Contact your lender when you have a problem meeting payments because they have many options to help borrowers through difficult times
• Open and respond to all notices from your lender
• Know your mortgage rights by reading your loan documents and studying the foreclosure laws of your state
• Understand foreclosure prevention options
• Prioritize your spending to see where you can reduce spending in order to make your mortgage payment
• Use your assets such as a second car, life insurance policies, and, if necessary, get a second job which demonstrates to the lender you are willing to sacrifice to keep your home
• Avoid foreclosure prevention companies who charge a fee to negotiate for you
• Don't lose your home to foreclosure recovery scams.
In Alabama their are other agencies to step in and help, such as the Alabama Legal Services Programs, the Alabama Bar Association, the Alabama Attorney General's Office, the office of consumer affairs and the Alabama Federation of Housing Counselor's.
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