In attempt to save Dorchester, Massachusetts from falling apart the City of Boston has begun to purchase run down foreclosed homes. Boston’s Mayor, Thomas Menino has been the driving force of the project. He explained that the goal is to fix the homes and sell them to families at a reasonable price.

Dorchester has its share of troubles; from crime, to joblessness, gang violence, and now this huge wave of foreclosures which has swept across the city. In order to make this project successful the city has increase street cleanings and police patrol in the area. Boston is hoping that by placing families in these homes crime will decrease, and the city will be better off.

Boston is not the only city purchasing homes to restore vitality. San Diego, Minneapolis, and Columbus, Ohio have all started to take on similar projects. Cities saving cities what a novel idea.

Home prices continue to decrease according to July’s numbers, and as a result there has been a rise in residential home sales. Many of the sales reported in July were on foreclosed homes, which were sold at majorly discounted prices.

Another report produced by the Commerce Department showed more Americans purchased newly built homes in July, an increase of 2.3 percent from a month before.

This report has stirred mixed feelings from analysts. Some believe that this is a positive sign and that the worst is over, while many analyst believe we have yet to see the bottom of this drop in the market.

Following the take over at Indymac the FDIC recently created a plan to systematically modify loans for homeowners who are most at risk for foreclosure. They began this process by sending out 25,000 letters to homeowners who are seriosly behind on their payments.

To qualify for this loan modification homeowners have to verfiy their income and verify that the home is their principle residence. After they have recieved approval they have to sign the letter the FDIC sent out and send it back with the payment due on the new modified loan.

They are hoping that by starting this mass loan modification campaign they will inspire other banks to do the same.

There is little suprise that reports suggest that one third of the people who purchased homes in the last 5 years in the U.S. owe more on their mortgages than their properties are actually worth. Forty-five percent of those who purchased at the top of the market in 2006 are now in deep with debt.

It was also reported that the highest percentage of homeowners who bought in the last five years were located in California, and of that group a startling ninety percent owe more then their home is currently worth.

To top it off there is little opportunity for those who wish to sell, and it will continue to be that way till homeowners drop their asking prices drastically. And so, the housing market continues to spiral downward.

Richard Syron the Chief executive of Freddie Mac reportedly ignored a memo given to him from the chief risk officer warning him that the firm was financing questionable loans. This news was released after the federal government made a decision last week to help financial giants Fannie Mae and Freddie Mac from collapsing completely.

It is also said that Mr. Syron ignored advice that the company should expand their capital cushion, and that they should slow the firm’s mortgage purchases. In both cases Mr. Syron did not take the advice give and actually steered further in the wrong direction. But Mr. Syron does not need to worry; he is sitting pretty as he has collect more than $38 million in compensation since 2003.

As the first wave of sub prime mortgage problems seems to be leveling off a bit, there is a new wave rolling in of homeowners with good credit who are now falling behind in their loans payments. Experts believe that this will worsen in the next two years, as many homeowners monthly payments will increase and the rate of unemployment reaches new highs.

In addition to the economic problems developing in our country there is also the problem that homeowners will not just being paying interest, but principle as well. And analysts are saying that some people could see a 50 percent increase in their monthly payments. With many of them owing more then the property is worth they will be unable to sell. And so, unforetunately the deteriorating housing trend continues.

Freddie Mac is now paying their loan servicers double the amount they were previously paying, this is only if the servicers are able to help a homeowner avoid foreclosure. Many critics have thought that the loan servicers were not going the extra mile to workout repayment plans, loan modifications, or short sales because they weren’t being compensated accordingly.

Compensation for each service has now been double by Freddi Mac; loan servicers now receive $2,200 for short sales, loan modifications have been increased to $800, and repayment plans are up to $500. In addition Mac is offering small bonuses for loan servicers who reach out to homeowners in trouble.

An Estate in Greenwich

In an area where millionaires and billionaires are the majority, foreclosure isn’t a word you would expect to have uttered. For Greenwich, Conneticut that was the case up till recently. Greenwich, one of the wealthiest communities in the country has had a number of foreclosure notices handed out recently.

The difference however between this community, and just about any other community in the nation is they manage more often then not to pull themselves out of foreclosure usually at the very last minute. A foreclosure auctioneer reports that he has had to cancel auctions for the same home on three different occasions because they have managed to save their homes, or at least for a little while.