1. I think the effects of the foreclosure crisis can be seen in every aspect of life around the world as I believe it had a large impact on the economic situation we are all facing now which is truly global. In our neighborhood there are a large number of vacant foreclosed homes which of course lead to the devaluation of our own home. There are also many homes for sale which have been on the market for over a year, something I had never seen before in the area.
2. I think I understand it all but just wonder how on earth we can get out of it now. With such a large percentage of people and banks under water in these houses I think recovery will take a long time.
3. I work at a foreclosure law firm and have been in this industry for over 10 years. The servicers (who you actually deal with on your loan) are all struggling to figure out what to do. Keep in mind that they only get servicing fees while the investors and investment pools are paid the interest from a mortgage loan and take the loss should the home be in default or foreclosure or be sold for a loss afterwards (which is pretty much ALWAYS the case). From our point of view we know that our jobs and the jobs of thousands of employees who work for mortgage servicers only exist in reality if the majority of borrowers make their payments or make some arrangements when they get behind. Nobody wins in a situation such as the one we are in now. What is working (and has always worked) are loan modification programs and forbearance agreements if borrowers have income and make the effort to contact their servicer, KEEP CALLING. If you do not have income or you cannot afford to make payments then I think the property must be foreclosed. So as far as helping people, I think it is a deeper issue. If so many have lost income due to job loss how can we keep them in their homes and paying to keep the "financial circle of life" moving? I don't think that we can. One thing I have heard are those who can afford to pay their mortgages feel that they are too far upside down and so they are willing to take a foreclosure on their record now to get out of a bad situation. I think there is blame to go around for mortgage brokers, appraisers, lenders with lousy loan requirements and borrowers who knowingly got in over their head. What to do about it now? I wish I could say. I think we all have to take our lumps and deal with this until things start to get better. We got ourselves into it. I personally found love and moved in with my boyfriend last year. Because I am upside down in my own home I cannot sell it without taking a loss so therefore I am renting the home until the situation improves. It may take a very long time but I am prepared to do so and will continue to make my mortgage payments as long as I am able. In closing, I think personal responsibility is lacking in a large number of people (in all blame categories above) and that greed took over for many years and sadly, those who were the most greedy are probably not held accountable now. Hopefully it is a lesson in financial responsibility that will last for at least a few generations to come!

(1a - personally affected) I am a homeowner who has NEVER BEFORE (until today) been late on a mortgage payment. I electronically made my June 1, 2009 payment to GMAC Mortgage on May 29, 2009. The money continues to sit in my account (noted as received May 29), however GMAC sent me notice today, June 15, that my June payment has not yet been paid. When I called, I was connected to a person in India who repeatedly informed me she could not transfer the money as a payment. I made my payment. Before the due date. They have the money. Yet their records (though the money is there) indicate I didn't make my June payment.

I've heard the horror stories where people have mailed in their payments and mortgage companies haven't applied the payments when received. Now I get to bear witness to the same nonsense. I am considering going to the police department and/or attorney general to file theft charges. To me, holding a consumer's money hostage is just another form of kidnapping. I suppose that brings the FBI into the mix.

(1b) I live in Flint, Michigan. It is a community that suffers devastating unemployment, crime and bad press. Our largest employer, General Motors, has shrunk from tens of thousands to several thousand employees, with more losses to come with its recent bankruptcy announcement. Job losses easily domino. Unemployed Joe the Butcher can no longer buy from George the Baker, who loses his job and cannot buy from John the Candlestick Maker. It's Economy 101.

GM wants additional tax breaks. Schools use the taxes to function. Fewer taxes paid by business, schools have to close. Neighborhoods are destroyed by school closings, as those who'd moved close to an elementary school have no desire to stay once the school closes. Vacant schools draw a bad element, further causing the rapid demise of the neighborhood.

People have lost their jobs directly or indirectly and can no longer pay their bills. The local economy doesn't allow homes to be sold for what is owed on them, so thousands have simply walked away from their homes. The local governments cannot pay to maintain the abandoned properties, so vacant homes soon have 4' grass and weeds around them; looters steal the aluminum and copper, fires are started, etc.

Individuals are moving in with family members when they can. Living on the streets when they can't. News reports say several (Michigan) state prisons will soon close, releasing more jobless (and mentally ill) onto the streets. The local shelters cannot handle the need now. Domestic abuse is up; crime is increasing; vandalism rages.

But the saddest dynamic is that those who WANT to pay aren't allowed the opportunity. We've seen families evicted from their homes because they could pay $1050 of that $1200 payment ... until times get better, offering to do whatever they can, only to be denied by the mortgage industry. So then their homes sit vacant and the cycle continues.

(2a) How can a mortgage company accept money on a mortgage account and not apply it to the payment? (with escrow/principal/taxes/interest all up-to-date)

(2b) I don't understand why a consumer is helpless against these mortgage company tactics. Will I lose my house or my credit rating due to their horrendous customer service?

I certainly hope your series of reports will also focus on the bad (deliberately heinous) accounting practices of mortgage companies that could *intentionally* put homes into foreclosure while ruining the credit of those customers who have paid religiously when the economy is failing. Thank you.

Dear Michigan Radio,
I have greatly enjoyed listening to your broadcasts regarding the ongoing foreclosure crisis and was wondering if you plan on doing any reports on how the banks are processing the foreclosures, getting houses back on the market, etc.
My husband and I have been house hunting since February. We would like to be first time home buyers, but have found that, contrary to popular opinion, it is not a good time to buy a house. It certainly isn't the lack of houses - we've seen almost 40 and have put in 10 offers in a four square mile area - rather, it is a lack of willingness to sell, and an increasing amount of red tape to cut through. While I can understand why private owners are reluctant to sell at basement prices, I cannot understand why the banks, with hundreds of houses already in foreclosure and more on the way, are being so unreasonable.
In one instance, we put in an offer on a foreclosed house and received a counter, only to then be dragged into a bidding war which the bank staged by continuing to accept bids and refusing to take the house off the market. After we withdrew our offer, the bank (Bank of America, I don't mind saying), then had the audacity to call my husband at work asking if we had found a house and would we like a mortgage?
In another instance, we toured a house that had been foreclosed and sitting vacant for at least six months. While the upstairs was very nice, the basement, which had once been nicely finished, had flooded repeatedly and was covered in black mold. The house had been winterized and the sump pump had been turned off. We first called asking to see the house four months before and received no answer.
Needless to say, this whole process has been extremely frustrating. One would think that the state of Michigan would be eager to have a young, educated family with a steady, middle-class income move into a neighborhood that has been hard hit by foreclosures. Unfortunately, this seems to not be the case.
In conclusion, I would like to hear a report on what role the banks are playing in this crisis and how the average home buyer can jump through all their hoops into a home.
Thank you again for all you do.
Sincerely,
Emily Shoemaker
Trenton, MI