Worst Hit Foreclosure Zipcodes: Are you on the list?

CNN’s article Foreclosures: 100 Worst Hit Zip Codes certainly got my attention. I continue to be amazed at the steady increase of foreclosures across the nation. I keep asking myself, didn’t anyone think this would all come back to bite them in the arse later? How do you take on a mortgage that you know that would cannot afford when the ARM resets? Or when the balloon payment comes due? Why did they fall for the “we’ll refinance you into a better loan later?”

For those thinking that I am on a soapbox, well, I am. We were there, and offered ARM options during the preapproval run. And although we declined like the responsible borrowers we are, we were still hit at the closing table with a change in the loan program initially offered. We politely declined and walked away from the deal. I promise you, it pays to do some research and become educated about the largest financial investment of your life. Or else it can cost you-your livelihood, home, credit standing thus forcing you to start over in this credit based society we happen to live in.

The folks in Las Vegas are hardest hit along with Detroit and California. This runs contrary to reports that Georgia led the country in foreclosures, nevertheless, they are still on the list.

If you happen to be in a situation where you are facing foreclosure, help is on the way:

HOUSING RESCUE

House: Allow more subprime mortgage holders to refinance into federally insured loans by raising the limit on Federal Housing Administration loans from $362,790 to as high as $729,750 in expensive areas. Increase the availability of mortgages by providing a one-year increase in the cap on loans Fannie Mae and Freddie Mac may buy, from $417,000 up to $729,750 in high-cost markets. No cost.

Senate: Identical provisions on FHA and Fannie Mae and Freddie Mac loan limits. Provides mortgage financing relief for homeowners with subprime loans by expanding the availability of state and local government bonds and raising the cap on the bonds by $10 billion over the next three years. Negligible cost.

Community Refinance Programs

ACORN is a community non profit that…

provides free housing counseling for low- and moderate-income people. ACORN tries first to get lenders to postpone the foreclosure while a plan is worked out, said Yancy. For example, if a borrower is three months behind and the mortgage is 8 percent, ACORN tries to renegotiate a lower, fixed rate, with the owed money wrapped into the loan.

(Source)

NACA, a program similar to ACORN, also provides housing counsleing and refinancing for predatory loans defined as loans above 10%. However, given the recent onslaut of foreclosures, this may have changed so please check with your local office. NACA’s rate is current 5.0%-30 year FIXED! !! You can’t beat that and it would surely be a welcome relief to so many who need a fixed rate mortgage.

I will update this list as I get more information on programs that offer refinancing to those in predatory loan situations. If you come across a program that you feel should be on this list feel free to contact me or leave a comment.

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GingerGirls Just Wanna Have Funds is a personal finance website dedicated to educating and empowering women in the area of personal finance. Our articles center on money management: making it, saving it and growing it which supports our theme: Breaking Financial Ceilings One Stiletto At A Time. We have been featured in Business Insider (contributor), Lifehacker, Consumerist, MSNBC, Essence, Wall Street Journal, Good Morning America and MSN Project Engage Web Series. I believe in a future where women can have financial freedom and choose the life they want to live by taking control of their finances. You only need to want it hard enough while letting go of limiting beliefs around money. Join me as I share tips that will help you light up your financial life and take control.View all posts by Ginger →

http://www.realestateinvestinghomestudycourses.com/kris-kirschner.html Kris

lol. I guess it’s time to be more careful now. Thanks for the share!
Pingback: Get Your House Together: African-American Women and the Foreclosure Crisis | Girls Just Wanna Have Funds
Ginger

Mo, I was pressed LOL! We were paying $1700 for a 900sq ft one bedroom apartment and I was just thinking this could be a mortgage!!! Ive learned alot through this process and I do know that when we buy again it will be in VA. More on that later in another post.
http://www.durtymo.wordpress.com Durty Mo

I’m with you Ginger. I’m kinda removed from the whole homebuying process. I bought last year and although I’m very happy that I did, I wasn’t real pressed about getting a home. Like you, I saw it as a HUGE PURCHASE if nothing else. This is excellent information! Thanks!
http://www.girlsjustwannahavefunds.com Ginger

Thanks Hank!!!
http://www.girlsjustwannahavefunds.com Ginger

Perhaps saying I can’t understand isnt the right phrasing… I can understand… I guess I am far more emotionally removed from buying and owning a home than others. I see it as a large financial transaction, nothing more, nothing less. When I looked at it 2 years ago mostly everyone we knew were getting into these loans and the broker we worked with then predicted the mess most homeowners are in right now. Most people knew that even at their highest income bracket for their career field they wouldn’t be able to afford the house they bought. So how they thought they would afford it was well…I find it hard to understand.

I am looking at it from the perspective of someone who stalked DC metro housing sales and predicated that 2007-2008 would be the year the bubble popped. No one listened. When the bubble pops, values go down and that also means the equity in your home goes down as well. There is no room for refinancing without adequate equity, especially when you factor in the other costs of owning a home like insurance, taxes maintenance etc etc. Its like rolling a boulder down a hill and hoping that the pebbles will break it the fall near the bottom. We knew this when our mortgage broker last February told us AT the CLOSING TABLE that he would refi us at no cost if we took the ARM. AT THE TABLE. We declined and walked away. We did the research. I implore others to do the same. We have a 5.375 fixed as a result. We are not perfect, so let me say that, lol…but I just want others to be informed. Didnt want to come off as high and mighty and not understanding but while tempting its something we faced as well and decided against.

And I blame the banks as well but that’s another post.
http://myinvestingblog.com hank

Hm – hit submit too early – Wanted to say: it’s the way the ARM is used that gets people. Some people can’t afford a house at all and the vision of actually being able to afford one clouds their rational sense. Then again, on the other side are the people that use it to their advantage, paying lower fees for the house, and investing the other money and waiting to refi while reaping the benefits of the lower costs by putting $ elsewhere when housing is tricky!

Keep up the good posts! I enjoy your blog – first time visitor; will gander around a bit more… RSS’d!
http://myinvestingblog.com hank

I was going to mentioned the same thing as S23; but apparently I was beat to the punch – I know several people that have done exactly what S23 is saying and have already refinanced. It’s a different side of the coin; does work, but as with any investing decision, has risks.
http://www.serenity23.blogspot.com S23

Ginger, I usually read and just lurk, but something you said caught my attention. You were wondering why someone would listen to a mortgage broker who tells them to take on an ARM and just refinance it. Well personally speaking, I can understand why someone would have thought an ARM was a good idea. They want a home and it would make sense to think that they can afford the mortgage (before it resets) and then refinance when it does get ready to reset. One would think their credit would be better and there would be a history of making timely payments, etc. But unfortunately, they won’t have the equity needed and their credit just may be worse. There are a lot of circumstances. But I just wouldn’t necessarily say I couldn’t understand someone who made that choice.