BluegrassForeclosure.com

On August 4, 2009, the mortgage company Taylor, Bean & Whitaker (TBW), was no longer a HUD-approved company.  This revocation in turn led the Kentucky Department of Financial Institutions to issue a cease and desist order to TBW.  Any loan that was in the process of being approved by TBW is hereby null and void.  All individuals that were going through the process must find another loan.  Kentucky is taking steps to make sure that current loans will be properly serviced through TBW.

This order also prevents TBW from advertising new loans.  What will happen remains to be seen.  However, HUD suspended TBW on suspicion and/or allegations of fraud.  I foresee additional lawsuits filed by various entities against TBW, so we should expect more news to come.

For more information, click here and here.

Despite a little bit of light at the end of the tunnel (we just can’t tell how far away that light really is), foreclosure rates are still rising in Kentucky.  2Q saw a rise in Kentucky on the foreclosure rate to 3.04%, up from 2.83% during 1Q, according to the Mortgage Bankers Association.  This equates to about 13,100 homes in foreclosure, including about 3,800 new cases.

Kentucky still fares better than Ohio, where the rate of foreclosure is about 4.51%, and the national rate, which is about 4.3%.  Overall, the foreclosure rate is still higher than last year.  While these number do not come close to the amount of homes that went into foreclosure during the 1930′s, it is still a problem of unprecedented numbers.

This of course, translates into a market of possible foreclosure properties for the investor of unprecedented numbers as well.  To learn more on the Mortgage Bankers Association report, click here.

If you are attempting to foreclose a house in Indiana, you now have to proceed to mediation before anything can further can be done, or before the home can go to sheriff’s sale.  States are attempting to come up with different methods to force the lenders and borrowers to the table to try and work something out.  But if neither party is willing or able to work it out, then it seems this is an extra, futile step.

By the time a home goes into foreclosure, the borrower doesn’t have any money to even try to catch up the loan.  The lender is usually unwilling to even consider a lower interest rate, plus, if the borrower has no money, they must be willing to put all of the arrears on the back end of the loan, to even give the borrower a chance to get current on the loan.

Then, assuming all of that happens, the recidivism rate is still pretty high.  So the lender has gone the extra step by giving a better interest, tacked on the arrears to the end of the loan, and 6 months down the road, the foreclosure just picks right back up.

The best way is for the lenders and borrowers to get together at the 60 – 90 day delinquent mark.  It’s at that point that they will have the most opportunity to work something out that is amenable to each.

For a recap on some other new laws, click.