According to housing experts, the high level of Saint Louis foreclosures and distressed properties all over the country has weighed down a lot of other sectors, particularly the mortgage market. One of the biggest banks involved in residential lending, Wells Fargo & Co., demonstrates how far the effects of the foreclosure crisis had gone. The firm recently announced that it will be cutting around 1,900 mortgage-related jobs, mainly because of a slowdown in refinancing and lending in the residential market.

Locally, the problem with foreclosure homes in Missouri will likely mean that Wells Fargo jobs based in the state will be affected. The brokerage unit of the company is based in Saint Louis. Reports revealed that the job losses will represent 1% of the total workforce of the company and around 3% of its mortgage unit staff. Majority of the employees who will be cut however, were temporary workers who were hired mostly in 2010 when refinancing applications increased, owing mainly to low rates of interest.

Analysts have stated that Wells Fargo's move demonstrates the fact that not even big companies can avoid the impact of distressed homes and foreclosed condos on the mortgage industry. The bank is the biggest housing lender in the U.S., but its mortgage loan originations have gone down to $386 billion in 2010 from the previous year's $420 billion. Meanwhile, earnings reports also showed that pending loan applications in the bank have also declined to around $73 billion as of the end of last year.

This was considered a huge decline considering that the bank's pending applications were estimated to be worth over $100 billion during the 2010 third quarter. The firm has an estimated 272,000 employees as of December 2010. With foreclosure houses for sale and distressed properties continuing to rise, analysts asserted that Wells Fargo is not the only one feeling the pinch and forced to make adjustments.

Majority of housing experts are predicting distressed homes and foreclosed condos to continue rising this year, which could aggravate problems in various other industries such as mortgage and construction. They did however, claimed that improvement in the nationwide economy will provide some form of relief.

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Foreclosed homes in Newark and in the rest of the state have taken a huge chunk out of newly-built and non-foreclosed residential property sales since the start of the real estate meltdown. However, recent reports showed that areas like Jersey City are recording increased activities in the condominium market. A total of 15 sales were closed in one city building in February while another six were recorded in another. There have also been pre-marketing sales reported at a Livingston townhouse development.

Despite the uptick in condo sales, realtors have been reluctant to declare the transactions as signs that the market is starting to recover, with most of them very much aware of the oversupply of low-priced foreclosed homes in New Jersey that are likely to continue to take away market share from the non-foreclosed property market. Although they do not expect the higher number of sales completed in February to continue for the rest of the year, most local real estate agents are grateful for the surge, particularly since the condo industry has been suffering from very slow sales in the past year.

Some market analysts have explained the surge in activities as buyers' way of taking advantage of the low mortgage rates. According to them, people are trying to get hold of properties in both non-foreclosed and foreclosure auctions markets before rates inch higher than 5%. Transactions in the segment showed that around 60% of those who purchased units work in the financial markets.

These buyers, analysts stated, are watching market trends closer than anyone else. It is highly likely that they expect prices to rise soon and buying homes in foreclosure and purchasing regular real estate properties to pick up as the economy starts to improve. Some also cited the growth in the rental property market, with vacancy rate in the state declining to as low as 6% in the past few months.

Analysts stated that the rise in rental rates and the absence of incentives in the rental property market have driven most investors and property buyers to ownership, with more of them making purchases at foreclosure auctions and non-foreclosed sales. Market observers stated that tax benefits offered to property buyers also played a role in the surge in sales.

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As the number of foreclosed homes, including Atlanta foreclosures, rises in the state, more properties are left vacant or abandoned. This has led to some homeowners deciding to open their homes to seniors who require care and a place to live which offers an environment similar to that of their former family residences. Although this does help a lot of homeowners, there are also those who oppose the growing trend.

According to some of the neighbors of a number of residential properties that have been converted into assisted living facilities, the growing business of caretaking will weigh down the values of properties further in a time when Georgia foreclosures have already sunk most communities' real estate values. Most of those who oppose such businesses are people who live in residential areas and subdivisions.

The conversion of residential and condo foreclosures, and even non-foreclosed dwellings, into assisted living premises is not really that new in the state, according to the officials of the Assisted Living Association of Georgia. They cited Gwinnett County as an example, where over 200 assisted living homes are licensed to operate. What is new is the emergence of these centers in subdivisions and residential neighborhoods.

Centers located in residential neighborhoods, even foreclosure homes converted into such centers, have garnered the most opposition from neighbors. Although residential assisted living businesses are not prohibited in residential communities, officials stated that people who plan on opening one require a special permit. Complaints from neighbors also play a part in planning commissions' decision on whether to grant a license or not.

According to some people who have opposed plans of converting home and condo foreclosures and other types of residential properties into caretaker centers, neighborhood opposition is often reason enough for a license not to be granted. They also stated that a lot of homeowners are against having assisted living facilities in their residential neighborhoods.

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According to court documents, McBarnette and his firm were involved in sales of several Durham foreclosures and a number of other properties in Mecklenburg County. In these sales, McBarnette reportedly tried to get bidders to pay him in exchange for withdrawing his purchase offers. Three bidders from Durham did pay him the money and local officials have revealed that McBarnette was ordered to pay restitution for these cases in the amount of $4,900.

A judgment was passed in December 17 under which McBarnette is required to pay state lawyer fees, civil penalties and restitutions in the amount of more than $47,000 for his alleged involvement in the sale of several North Carolina foreclosures. According to court clerks, they became suspicious when a number of bidders complained that McBarnette had tried to interfere with the process of auctioning the properties.

In the subsequent investigation, officials reportedly found that McBarnette violated North Carolina's laws against deceptive trade. The issue also put a shadow on other auctions involving foreclosed dwellings and foreclosed condominiums in the state. Meanwhile, officials decided not to pursue charges against the individuals who paid the money. They argued that McBarnette initiated the whole scheme with full knowledge that he would be violating the area's law should he continue to do so.

A further look into the property deeds and consent orders for the sales allegedly showed that McBarnette took advantage of the upset bid period common in auctions of foreclosures wherein a 10-day timeline is provided to bidders to increase their offers. The upset bid occurs between the initial bidding and the final sound of the gavel.

McBarnette allegedly waited until the deadline is near and then call bidders who are most serious in acquiring the properties. According to market observers, the controversy will put auctions of foreclosed condominiums and houses under more intense scrutiny as officials are now aware of potential schemes similar to what McBarnette launched.

According to contractors, the high number of distressed properties in the state, including Tarrant foreclosed homes, has created problems beyond the residential real property market. Sectors like construction and construction materials supplies are just some of those that suffered along with the housing market.

As an example, Tri Dal Ltd. has reported having over $300,000 worth of unpaid bills for a project involving excavation and installation of utilities for a retail complex in North Dallas. The contractor incurred the loss when the property ended in Texas foreclosure listings.

Tri Dal President Rick Muller also revealed that his company barely achieved a break even performance in 2009. He stated that as properties falling under house foreclosures listings increase, a number of contractors' losses also file up, forcing most of them to cut down workforce and close some units and offices.

Another example of such situations is the Stoneleigh project which ended up becoming one of the many properties under foreclosed condo properties listings. Developers behind the project reportedly owed an estimated $5 million to several contractors and subcontractors. The project was stopped in 2008 due to problems in financing.

In May 2009, the developer of the Stoneleigh project filed for bankruptcy, but the condo project still ended in a foreclosure sale. The property was later purchased by Centurion American Development Group and the company is currently in negotiation with banks for a loan that will finance the completion of the construction project. According to most contractors, the problem is that, under the state law, contractors lose any claim once a property gets foreclosed.

They can take certain items though, including wiring, light fixtures, carpeting etc. from a foreclosed property, but most of the time, even these are not enough to cover the unpaid bills. A number of properties under foreclosed house and condo properties listings have caused financial woes to Texas contractors and subcontractors. According to contractors, this has taught most of them a lesson of scrutinizing the financial status of the developer before accepting a project.

Among these metro areas were Shreveport-Bossier, Lafayette, New Orleans and Houma-Thibodaux. Baton Rouge was also included in the list, with Baton Rouge foreclosure investing suffering from the increase mainly because of declining home prices.

Overall, Louisiana foreclosed homes for sale climbed during the six-month period, with more homeowners under various foreclosure phases, including those who have received initial default notices and those who had their homes repossessed or sold through foreclosure deals. The Louisiana cities are just five of a total of 154 metro areas all over the U.S. that recorded increased foreclosure activities during the first half of the current year. The country has a total of 206 metropolitan cities.

Home foreclosure list for the New Orleans-Metairie-Kenner region is expected to expand further in the coming months as over 4,000 households received a notice of foreclosure during the first half. This represents a 52% increase compared with the same period of 2009 and a 7.9% rise when compared with the last six months of 2009.

In Baton Rouge, total number of foreclosure notices and foreclosed residential and condo properties for sale jumped by 46.9% compared with the first six months of 2009. A total of 1,817 households received notices during the said period, which represent a 10.3% rise compared with the last six months of 2009. The area recorded a ratio of one household for every 180 receiving a notice of foreclosure.

Meanwhile, Shreveport-Bossier had 739 households receiving notices during the period in focus. This represents a 47.5% rise from the January-June 2009 period. However, it also means a 17.4% decline compared with the last six months of the previous year. Lafayette, on the other hand, had a total of 430 households receiving notices of foreclosure during the current year's first half period. This means that one household out of every 261 has received a notice or has ended up on the list of foreclosed residential or condo properties for sale.

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The more than 8,400 units of distressed and foreclosed homes that changed ownership from lenders and short sellers to buyers in the first quarter were sold at an average price of $133,590, lower by 39.11 percent than the average selling price for non-foreclosed homes.

This price discount gained by people who acted on their plans to purchase foreclosure houses and short sales in Illinois during the quarter was the third biggest discount posted by a state. The biggest price discount was posted by Ohio, followed by Kentucky.

The average price discount for bank owned single-family and condo foreclosures for sale was even higher at 45.88 percent. The average discount for pre-foreclosure sales was 19.32 percent. Sales of distressed homes and units repossessed through home auctions in Illinois accounted for 33.94 percent of all home sales in the state during the quarter, a lower percentage compared to previous time frames.

In the same quarter, foreclosure filings in Illinois also slowed down by 5 percent from the preceding quarter to 45,780, although they marked a jump of 18 percent compared to filings one year earlier. Almost 33 percent of these were bank owned and almost 23 percent were posted for foreclosure sales, a substantial number of which were posted for Chicago foreclosure auctions.

Some local real estate professionals said that the condo sector in Chicago, particularly the luxury condo subsector, will recover much faster than the single-family sector because the metro-area condo inventory has been declining significantly and that no new high-rise buildings are being built.

The vacancy rate for rental condos has also been falling. In June, the number of vacant rental condos dropped from 1,927 to 1,286. If more condo foreclosures for sale continue to be sold, the condo sector will indeed recover faster than the single-family sector.

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With increasing number of Houston pre foreclosures, some neighborhoods are facing the possibility of more abandoned and vacant premises; a situation that usually leads to increased crime rates and neighborhood blight just like what happened with Candlelight Trails.

Residents living near the abandoned Candlelight Trails condominium have complained that the vacant property has created security problems in the neighborhood. They also asserted that the building has become an eyesore, which can eventually discourage some people who might want to buy foreclosed houses for sale in the city.

The building was vacated in 2007 and has since fallen into disrepair. Residents have asked city officials to tear the structure down, but the building has remained where it has always been. City lawyers have stated that the issue is being addressed, but the more-than-usual number of defendants is making it more difficult to gain legal rights to remove the structure.

Candlelight is just one of the condominium foreclosures all around the country that contributes to the decline of neighborhoods hit by the housing crisis. In the case of the Houston property, its owners have been sued last year by the city in an effort to acquire legal rights to have the structure demolished.

As homes under Texas foreclosure auctions continue to increase in number, residents are hoping that new homebuyers will replace foreclosed owners and that local neighborhoods will start to recover. However, the problem of the condo building is not doing anything to forward the residents and the city’s efforts to improve the condition of the community.

According to lawyers, because there are many stakeholders involved, city officials need to have each of these owners served. In addition, demolition costs are expected to reach $500,000, hence the city’s reluctance to demolish the building until a definite legal permit is secured.

Condominium foreclosures are adding to the security problems of some neighborhoods in the Houston area, with Candlelight Trails being a primary example. Residents have complained that the presence of the abandoned structure has also affected occupancy rates in nearby apartment buildings.

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According to real estate consulting firm Condo Vultures, more than 97,000 condo units were foreclosed in 2009, an increase of 29 percent from 2008 and largely a result of condo overbuilding throughout the state.

To help solve these condo market problems in Florida, Fannie Mae has assigned one team to reassess unapproved condo buildings throughout the state and determine which buildings can be given special approval despite their failure to pass Fannie Mae requirements on financial stability, occupancy rates and other eligibility guidelines.

Most of these unapproved condo buildings are being run by homeowners and not by developers. If the buildings pass the review, they can be sold to buyers using Fannie Mae-backed mortgage loans.

To speed up the process of coordinating with lenders, condo projects that would pass the review will be added to the for-sale lists on eFannieMae.com. Buyers of these units will be provided with Fannie Mae financing.

Karen Pallotta of Fannie Mae stated that the special approval scheme for Florida was aimed at reducing the number of condo units entering foreclosure listings, at cutting down statewide condo inventory and providing liquidity to the market. She expressed recognition of the extraordinary struggles of Florida in its condo sector.

Amy Bonitatibus, spokeswoman for Fannie Mae, added that the review scheme has already been crafted by Fannie Mae so that the assessment team can properly examine whether certain condo buildings should be put back into the list of Fannie Mae.

Broker Moe Veissi, first vice president of the National Association of Realtors, lauded Fannie Mae for its effort of helping the condo market.

In the report released by Condo Vultures, among counties in Florida hardest hit by condo overbuilding and foreclosures were Broward, Palm Beach and Miami-Dade counties. The coastlines of these counties are dotted with high-rise condo buildings with majority of their units unsold and vacant.

Condo Vultures also noted the Fannie Mae special approval scheme, but it said that it will not significantly move condo properties as many lenders still refuse to provide loans despite prior approval from Fannie Mae.

Nevertheless, Condo Vultures said that federal loan modifications achieved some level of success in South Florida, slowing down the pace of growth of foreclosure listings in the region.

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The rules, which cover condominium developments that will qualify for FHA-supported mortgage loans with low interest rates, will take effect on November 2. Under the new lending rules of the FHA, a condominium development should be 50 percent sold and at least 10 percent of the condo units are owned by one individual.

Additionally, loan delinquencies are allowed only on 15 percent or less of the units in the condominium buildings. Industry experts said that the stringent rules could help many condominium owners avert government foreclosures as they will be given affordable mortgage loans.

They said that FHA-backed loans are important to many property sales where prospective buyers failed to qualify for traditional financing. They added that changes in the rules will adversely affect condominium sales.

A study of the impact of government loan program on new property sales showed that the FHA financing is popularly used by builders in Northern California. According to the report, government mortgage programs were important in 2009. It noted that 59 percent of home sales in 2009 were dependent on financing programs of FHA, Veterans Affairs and the U.S. Department of Agriculture.

In Northern California, FHA financing accounted for 68 percent of the total sales for this year. In Southern California, FHA loans accounted for 48 percent of the total sales. The new condominium lending rules of the FHA are expected to protect the agency from incurring more losses.

Meanwhile, the federal government has set November 30 as the deadline for first-time homebuyers to avail of the $8,000 tax credit. But industry experts are hopeful that the federal government would give in to the growing pressure to extend the tax credit beyond its November deadline.

If the tax credit will be extended, it would mean good news to builders and a possible quick recovery of the housing market.

Industry experts said that making FHA-insured home loans with low interest rates more accessible would mean a lot in helping homeowners avoid government foreclosures in the future.