The New Haven program helps distressed homeowners by providing them much needed cash that they can use to avoid foreclosures. The funds will be used by the Neighborhood Housing Services of New Haven to help troubled borrowers who want to seek mortgage refinancing but lack the money necessary to go through the process.

The money, which has been deposited in the rescue fund of the organization, is expected to help over 40 borrowers refinance their loans. The nonprofit organization explained that the money will act as bridge funding to help borrowers go through the process of renegotiating their loans and avoiding foreclosure proceedings.

Knight Libertas contacted the nonprofit organization about donating to help reduce the growing foreclosure rates in the area. Foreclosure has been one of the major problems being faced by homeowners for more than two years now.

The first wave of foreclosures was blamed on homeowners who made irresponsible loan choices and lenders who enticed them to take out bad loans. And as the whole country is still reeling from the impact of the first wave of foreclosure, here comes another flood of foreclosed properties. But this time, the rising unemployment rate is all to blame for it.

Nationwide, a foreclosure is being filed every 13 seconds based on the report released by The Center for Responsible Lending. The nonpartisan organization predicted that about 17,700 home foreclosures will be posted in Connecticut in 2009.

The employees of Knight Libertas understand the severity and extent of the foreclosure crisis and its impact on homeowners. Gary Katcher, executive vice president, explained that the campaign was developed because the company’s employees were alarmed about the condition of the housing market in Connecticut.

He said that the company chose the New Haven’s rescue fund because of its direct assistance to those severely affected by the growing foreclosure rates in Connecticut. The almost 120 employees at Knight Libertas donated a share of their income to the campaign while some clients voluntarily provided some gifts.

In Daytona Beach, cheap foreclosure properties have made the area a buyer’s market. According to industry experts, home values in Daytona have never been this low before, thus attracting many potential homebuyers who, during the peak of the housing market, could not afford to buy one.

Last month, home sales in Daytona rose by 20 percent compared with August the previous year. But home prices took a different direction, dropping by almost 19 percent. The saturation of foreclosures and short sale on the market allowed buyers to have a wide range of cheap properties to choose from.

In the first six months of this year, the foreclosure rate of Daytona Beach was one of the highest among 20 metropolitan areas in the country. Industry analysts attributed the increase in the number of Florida foreclosure homes on the rise in unemployment rate. They said that many homeowners lost their jobs, making it difficult for them to pay their monthly mortgages.

Analysts said that the federal tax credit of $8,000 has been a great help for first-time homebuyers to take advantage of the low home prices in Daytona. Currently, a great number of first-time homebuyers are scrambling to complete the purchase before the November 30 expiration of the tax credit. The industry has been lobbying the U.S. Congress to extend the tax credit program.

Meanwhile, analysts said that despite the wide array of cheap foreclosure homes to choose from, sales are coming in at a slow pace. This is because many buyers are finding it difficult to obtain a loan. Analysts said that stringent requirements were imposed on loan applications.

On the other hand, industry analysts said that the thought of a possible job loss has hindered many buyers from making a purchase in the area. In July, Daytona’s unemployment rate peaked at 11.2 percent which was higher compared with the national rate.

But despite the struggling market, industry experts said that it is facing on the right direction towards recovery.

According to industry experts, the city has beautiful housing stock, well preserved and rehabilitated. And the houses, which typically sell for 500,000, are now available for lower prices.

Experts said that the transformation of Pittsburgh into a city of decay to a health services and high-technology hub may provide lessons to other cities and towns. The city survived the collapse of its steel industry and the subsequent massive job loss.

Pittsburgh’s unemployment rate of 7.8 percent was low compared with other cities across the country, and about 2 percent less than the total national average. In addition, the number of Pittsburgh foreclosure homes was among the lowest.

Industry experts said that Pittsburgh brings forth the message that the right leadership and support can help a city rise from the ashes of a major economic decline. Furthermore, the city also provides a lesson of being proactive and not to wait too long for things to go back to normal.

The city of Pittsburgh was severely affected by overseas competition, national recession and new technology which resulted to the collapse of the steel industry. About 120,000 jobs were lost in the manufacturing sector since 1981 to 1984.

Because jobs were difficult to come by in the city, many young workers left Pittsburgh, resulting to a major demographic shift. Today, Pittsburgh is the only city in the country where the number of deaths surpassed births annually. The road to recovery for the city was made easy by some strategy, fortuitous circumstances and luck.

The luck part was provided by Carnegie Mellon University and the University of Pittsburgh. Both universities offered research talent and serve as business incubators. For strategy, Pittsburgh focused on neighborhood development. Its Mainstreets Pittsburgh initiative has provided funds for façade renewal and building restoration.

Furthermore, the city preserved its parks, changed laws covering land use and reclaimed old industrial sites. Two years ago, Pittsburgh was chosen as the most livable city in the United States.

According to industry experts, the city benefited from the loyalty of residents. Instead of relocating after the collapse of the steel industry, many suppliers diversified or sought other markets.

The declining residential and commercial real estate market is not unique to the city of Denver. Most major metropolitan areas across the country are experiencing the same problems. However, what makes this Colorado city unique is despite the problems, it is still one of the fastest growing cities in the country today.

Several significant factors that put Denver on the map as one of the most progressive cities in the country include the Denver Transportation Expansion Project, its great recreational facilities and quality education.

Market data showed that the city’s high livability score and buoyant corporate environment continue to be major factors that attract the interest of businesses and potential homebuyers. Industry experts said that Denver may be suffering from the impact of the foreclosure crisis but it still fared better compared with other cities across the country.

This is because restrained development prevented excess inventory that burdens other housing and commercial markets. In the first quarter of this year, the number of Denver foreclosure homes filings dropped by almost 46 percent compared with the same period a year ago.

Statewide, the picture is not as rosy as Colorado’s foreclosure activity rose last month, earning it the eighth spot in terms of high foreclosure rate in the country.

According to market data, 6,472 homeowners across the state received at least one foreclosure filing in August. This means that one out of 329 houses were in some stage of foreclosure. The August figures represented an 18 percent increase from the previous month and over 39 percent higher from August 2008.

In the second quarter, 12,135 properties were placed on the initial stage of bank repossession. From April to June, about 5,000 actual foreclosures were reported, meaning the properties were sold at auctions or returned to the banks.

During the period, the Denver areas saw some improvements. The total number of actual foreclosures dropped by almost 30 percent in the counties of Denver, Arapahoe and Adams. Industry experts said that despite the high foreclosure rate, Colorado’s housing market is showing some recovery compared with its performance in 2007 and 2008.

Industry experts said that in the Metro Atlanta area, home values declined by another 10 to 15 percent in the past six months. Recent market data showed that Georgia is ranked as one of the top 10 states nationwide with the highest foreclosure rate.

Because the housing market is dominated by foreclosure properties, many homeowners are finding it difficult to sell their homes. Frustrated homeowners are finding it hard to compete with the very low market prices of foreclosure properties. They said that majority of prospective buyers would prefer buying bargain-priced Georgia foreclosure homes because they could save a lot of money.

For this month, over 200 foreclosure houses are scheduled to be auctioned off in Atlanta. According to industry experts, many foreclosure homes on the auction block are priced below market value, with some fetching a starting bid of just $49,000. They cited a Northcliffe Drive foreclosed home which was originally valued at about $1.2 million but is now being sold for $189,000.

Industry experts said that the current market prices of foreclosure properties in Georgia are unprecedented and it would be a wise move for buyers and investors to take advantage of the market situation.

The current situation in the Georgia real estate market may bring a smile on buyers’ faces but it is the other way around for sellers. However, industry experts are optimistic that the market will recover in the next five years.

On the other hand, last month’s foreclosure rate earned the state the ninth position in the nationwide ranking. According to market data, Georgia posted foreclosure filings on 11,947 properties in August. Filings include notices of default, auctions and bank repossessions. Last month’s figures represented a 36.5 increase compared with the same month last year and 7.3 percent higher over July 2009.

The state’s foreclosure filing numbers earned it the seventh position in the national ranking of states with worst foreclosure filing rate.

Industry analysts said that the August foreclosure activity showed that there is still an abundant supply of foreclosure properties on the market despite the regulated release of bank-owned properties.

The NSP was initiated to buy foreclosed houses in partnership with nonprofit housing groups in areas that will receive the federal funds. Under the program, the foreclosed properties will be rehabilitated to be sold or rented to eligible low-income and moderate-income families.

The program selects the communities that will receive the federal funds based on the area’s foreclosure rate, number of vacant properties and mortgage interest rate. In Tennessee, the distribution of funds to communities will be administered by the First Tennessee Development District. Federal funding for buying foreclosed homes will be distributed to communities in Johnson City, Bristol, East Tennessee, Greenville, Sneedville, Erwin and Kingsport.

Meanwhile, First Tennessee Development District director Sherry Trent said that among the communities chosen to receive the federal funds under the program, the town of Erwin is the least in need of the aid if foreclosure rate is the basis.

She said that about $100,000 is projected to be used in the town to buy and rehabilitate two houses. The renovated properties will then be converted into apartments to be rented or may be leased as a whole, depending on the type of property purchased. Erwin will use the federal funds more on buying properties that are in danger of ruination or facing value depreciation.

Trent explained that the program will save neighborhoods from deterioration. Industry experts said that a property in a state of deterioration can pull down the value of surrounding properties in a neighborhood. They added that the primary goal of the federal program is to help stabilize neighborhoods and prevent abandoned and foreclosed properties from getting demolished.

Meanwhile, industry experts said that many properties that have been repossessed are standing empty and deteriorating by the day as grasses kept growing up in lawns. Properties under these conditions are the target homes to purchase and rehabilitate under the buying foreclosed homes program. The First Tennessee Development District is hoping to renovate the properties and made them available for rent this year.

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According to the market data, closed sales for condominiums and townhomes in Fort Lauderdale dropped by 4 percent in July compared with the previous month. But the volume of closed sales in July was higher by 35 percent compared with the same month a year ago. And out of the total condominium closed sales, 39 percent were foreclosures, an increase of 34 percent from June.

Meanwhile, condominiums and townhomes posted an increase of 3 percent in average sales price last month compared with June and a drop of 39 percent from July last year.

July’s median sales price increased by 4 percent compared with the previous month and declined by 46 percent from July a year ago.

Pending sales of condominiums dropped by 2 percent in July compared with June sales but up by 147 percent from July last year.

The inventory for condominiums and townhomes last month dropped by 3 percent from the previous month and 29 percent below from July 2008. Meanwhile, available inventory of homes in Fort Lauderdale in July was about 14 months. And out of the total available inventory, 27 percent consisted of condominium foreclosures and short sales.

On the other hand, closed sales of single-family homes dropped by only 1 percent in July compared with the previous month and 22 percent higher from July the previous year. Also last month, 37 percent of closed sales deals involving single-family homes were bank foreclosures compared with 29 percent in June.

The average single-family home sales price dropped by 4 percent in July compared with June and 30 percent below from July a year earlier.

According to industry analysts, short sales and Fort Lauderdale foreclosure homes sales continue to pull down the average sales price in the area. The median sales price jumped by 4 percent in July but was 27 percent below from the same month the previous year.

Additionally, pending home sales in July dropped by 11 percent compared with the previous month. However, the July figures represented a 128 percent increase from the same month last year.

Despite the declines in closed and pending sales last month, industry analysts are hopeful that the housing market in Fort Lauderdale will soon show modest indications of a recovery.

The default rate for American residential mortgages in the second quarter rose to 9.24 percent of all mortgages, representing over 4 million of 45 million homeowners monitored by MBA.

Compared to the first quarter, the 9.24 percent represented a slight increase, but compared to the second quarter of 2008, it represented a jump of 44 percent.

Meanwhile, the percentage of home loans that have gone into foreclosure rose to 4.3 percent, marking a 3.85 percent increase from the first quarter and a 1.55-percentage point rise from the second quarter of 2008.

During the second quarter, the overall rate for loans in default and loans already in foreclosure reached 13.16 percent, the highest percentage reported ever since MBA started monitoring loan defaults.

According to MBA economist Jay Brinkmann, prime loans had the biggest foreclosure rate increase among types of loans in the second quarter. Foreclosure rates for subprime adjustable rate mortgage loans have subsided.

Almost one out of every 3 foreclosure filings involved a prime mortgage loan, a significant increase from the one-in-five ratio for prime loans in the second quarter of 2008.

This finding on prime loans is becoming a big concern in the mortgage industry as prime home loans comprise 67 percent of the residential mortgage market. If defaults continue to rise among prime loan borrowers, foreclosures will increase sharply.

The four states that have always been on top of foreclosure charts since the start of the housing meltdown still led other states in delinquency rates during the second quarter. Florida, California, Nevada and Arizona accounted for 44 percent of all foreclosure filings in the second quarter.

The main reasons for the continued defaults were economic difficulties and falling home prices.

In Florida, 12 percent of all mortgages were in some stage of foreclosure, the highest rate in the second quarter. Another 5 percent were delinquent by at least 3 months as of June 30.

On the whole, according to economist Brinkmann, loan defaults and foreclosures will continue to rise if the employment situation does not significantly improve. He said that job losses and the resulting mortgage defaults will reach their peaks in the middle of next year, followed by foreclosures several months after.

The sharpest increases in bidding frenzies have been occurring in markets battered by foreclosures, short sales and sharp home price declines, but which are still considered attractive markets or great places to live despite the prevalence of foreclosures.

Among these are Fort Myers, Phoenix and Los Angeles. These cities comprise metro areas that occupy top rankings in charts of metro area foreclosure rates in the first 6 months of 2009, based on a nationwide survey of foreclosures.

In Fort Myers, according to real estate businessman Denny Grimes, a total of 4,200 homes were released to the market in February at prices below $100,000, creating bidding frenzies. According to Grimes, oftentimes banks offer their real estate owned foreclosure homes at irrationally low prices to attract buyers.

He also said that currently about 2,000 homes are available for sale in Fort Myers. The median price in the area has fallen to about one-third of the median price during the housing boom.

Grimes expect Fort Myers realtors to sell more properties this year than in the past years because of the attractive prices. He said that oftentimes investors with cash offers have been getting all the bank-owned homes even if their bids are lower than those offered by first time homebuyers and retirees.

He said that most bidding frenzies occur in price levels below $150,000. Homes priced around $300,000, which are often the prices for move-up homes, are the ones not moving. High-end homes continue to be stagnant because many sellers are holding out for price increases.

In Phoenix, homes priced under $150,000 have been getting multiple bids and cash offers even on the first day. But the cash offers have been winning even if they are lower bids because sellers prefer not to be bothered by mortgage financing and strict appraisals.

In Los Angeles, where home prices have gone down by 35 percent from their peak levels in 2006, renewed interest from buyers have sparked bidding frenzies. In the area covered by Los Angeles, Santa Ana and Long Beach, home prices have fallen to $303,500 in the first quarter of 2009, a decrease of nearly 49 percent from the record high of $593,600 in 2007.

In January, the percentage of foreclosed houses was 46 percent, the highest level reached in the county’s home resale market. During the last months of 2008, lenders made a lot of foreclosures in Orange County, putting hundreds of foreclosed homes into the market.

In August last year, over 1,400 foreclosed houses were repossessed by banks, the highest monthly total in the county’s foreclosure history. Resales of foreclosed houses started to increase after August and then subsided in starting February as national and state foreclosure moratoriums were implemented to make way for the Obama administration’s Making Home Affordable program.

All the foreclosure homes sold in May were repossessed within the 12-month period prior to May.

Some real estate market analysts contend that the declining share of foreclosed houses in home sales is due to the decision of banks to control the release of their foreclosed properties to the market in order to prevent further home price declines.

Others contend that the banks are also controlling the reflection of foreclosed houses in their books to make their financial statements more attractive to investors.

But banks would have to release the rest of their foreclosure inventories to the market soon because new foreclosure units are entering their books.

According to county foreclosure data, banks have repossessed 591 condos and homes in Orange County in May, a rise of nearly 23 percent from April but a drop of nearly 48 percent from May 2008.

California has implemented several measures to control foreclosure actions across the state, including foreclosure prevention counseling services, foreclosure moratoriums, mandatory meetings with borrowers before default notice filing and financial assistance incorporating the $8,000 federal tax credit.

But many are not being helped by the federal and state programs because of various reasons such as loss of jobs, inadequate income, high levels of non-mortgage personal debts, underwater loans, ineligibility of jumbo loans and inability to trace the real holder of the mortgage loans.

Nevertheless, federal and state mortgage data show that many lenders are finally working out loan modifications for qualified borrowers. The loan modification and 90-day moratorium law that became effective in June is expected to help more homeowners save their homes from becoming foreclosures houses.