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Industry experts are advising distressed homeowners in South Carolina to seek help now to save their properties from being placed on listings of foreclosed houses. Funding for the Family Services Inc., an agency based in North Charleston that serves as the state’s conduit for mortgage counseling services, is expected to run out before the year ends.

The agency has been receiving federal grants to be used for foreclosure counseling. However, the increasing unemployment rate and mortgage defaults in the state are taking its toll on the agency’s funding.

Recently, the agency received $775,000 emergency funds, about 50 percent of what it usually receives. According to the agency, it needs to apply for more federal money and to find other fund sources in order to continue offering free mortgage counseling services to distressed homeowners who want to save their properties from listings of foreclosed houses.

Debbie Kidd of the Family Services said that the current situation is nerve-wracking and there is a great possibility that the agency will experience a shortage of funds by early next year. But she still encourages distressed homeowners who are in default and want to save their homes from foreclosures to contact the agency for free counseling help.

The agency uses the federal grant it receives to pay for the 22 foreclosure counselors on its staff. These counselors negotiate for reduced mortgage payments for struggling borrowers. Since 2007, the agency has already helped about 6,130 troubled borrowers across South Carolina.

Mayor Joe Riley said that many homeowners may save their houses from foreclosures and remain in their homes by working out their loan problems through counseling. He added that Family Services is providing good credible honest counseling for free.

Federal lawmakers have issued three rounds of grants for a total of $410 million to help homeowners hurdle the economic downturn and save their homes from foreclosures. The latest round of nearly $48 million funds could be the last federal grant that would be received by foreclosure counseling services for a while.

Homeownership advocacy groups are expecting emergency funding for mortgage counseling programs across the state and the rest of the country to simmer down as the overall economy improves. However, the groups are expecting foreclosures to continue to be serious problem in Charleston for the next two years.

On its part, Family Services plans to advocate for additional funding to continue providing assistance to homeowners who want to save their properties from listings of foreclosed houses.

The pace of house foreclosed listing and issuance of default notices slowed in San Diego, according to real estate market analysts. But the rate of delinquencies is still rising, based on statements from government agencies and mortgage lenders.

In August, notices of defaults in San Diego County dropped to 2,658 notices, a nearly 20 percent drop from 3,318 notices in July and a 6.7 percent decrease from notices in August last year. It also marked the lowest number since November 2008.

Mortgage analysts however said there has not been a slowdown in the intensity of distress suffered by borrowers. The delinquency rate is still rising and the number of defaulting borrowers unable to pay their arrears continues to rise.

Typically, the analysts said, the banks file notices of delinquencies after 2 or 3 months of missed payments and then proceed with foreclosure within 6 months from the first missed payment.

According to the analysts, the decline in default and foreclosure notices may have been driven by the increased pressure from government agencies and housing advocates for more loan modifications and the increased efforts to complete short sales to avoid house foreclosed listing.

But based on initial data, about 50 percent of borrowers who have obtained loan modifications have not been able to sustain payments because of reduced income, job loss, existence of other personal debts and family problems.

There are also reports that many modified loans have not reduced monthly payments, but instead increased them because lenders have added unpaid balances and other fees to the principal.

Many other monthly payments have also increased substantially after modification because these loans are originally option adjustable rate mortgages which featured very low monthly payments. Adjusting from very low monthly payments to higher levels but typical for conventional loans is certainly difficult for many borrowers.

Norm Miller, a professor of real estate at the University of San Diego, said that the improving default and foreclosure numbers may be reflecting the slight improvement in the unemployment situation. He explained that the jobless rate in San Diego in August remained unchanged while the nationwide and statewide rates increased.

In addition, the shift in foreclosure and default trends also occurred in the type of communities affected. While foreclosures slowed in moderate-income areas targeted by subprime lending, the pace of house foreclosed listing is now rising in higher-income communities where most houses were purchased with prime loans.

The Federal Reserve has announced it would extend to the middle of next year its Term Asset-Backed Securities Loan Facilities to help the struggling commercial real estate industry. The TALF program would have expired this December 31.

TALF was designed to boost lending in the commercial property sector. According to analysts, TALF has been able to lower the costs of consumer borrowing and to rejuvenate trading in asset-backed securities markets.

With support from the Treasury Department, the Fed extended TALF for new commercial mortgage-backed securities to June 30 next year and TALF for new asset-backed securities and legacy securities backed by commercial properties to March 31 next year.

The Fed said it decided to extend TALF because of the continued weakness in the markets for CMBS and ABS backed by business and consumer loans. In recent weeks, lawmakers and the commercial property industry have been calling the federal government to help the commercial property sector, which has been struggling from vacancies, foreclosures, tight lending and declining values.

Scott Buchta of Guggenheim Capital Markets said the extension indicates that TALF has been effective in improving the securities markets and that federal officials recognize that the asset-backed markets are still struggling.

Real estate analysts said the commercial property sector is being clobbered by declines in revenues from office, apartment and retail buildings. In recent weeks, the commercial real estate sector has been pointed out in many news items as the next sector to collapse because of the lack of lending for property investors and developers whose loans are due this year.

Lenders have been hesitant in refinancing commercial property loans taken out during the boom with rosy revenue expectations. Since the meltdown, revenues from commercial real estate have been falling and prices now are 35 percent below their level in October 2007. Developers with maturing commercial loans had to renegotiate with their lenders or succumb to bankruptcy or foreclosure.

Mall-owner General Growth Properties blamed its failure on the investment of its loans in CMBS.

Additionally, the Fed said federal officials had considered the call to extend the TALF to residential mortgage securities and other types of collateralized securities, but did not pursue it because these types have been receiving help from the Treasury Department’s public-private investment program. However, the Fed said it will reconsider its decision if conditions warrant an extension to other types of securities.

The pace of multifamily and commercial property lending slowed down in the second quarter, compared to the second quarter last year, but increased compared to the first quarter of 2009, based on a report from the Mortgage Bankers Association.

The cry of homeowners struggling with the foreclosed home crisis has definitely touched a lot of Democratic senators as shown in their open letter addressed to U.S. Treasury Secretary Timothy Geithner.

The Mortgage Bankers Association has lowered its previously announced home loan refinancing forecast despite expectations of increased refinancing under President Obama’s repo property prevention program.

The unemployment problem has been hindering the progress of the government foreclosures program, according to housing analysts, economists and foreclosure counselors.

A free workshop for distressed homeowners who want to avoid repossession houses will be sponsored by the Lafayette Neighborhood Housing Services (LNHS) in Indiana.

Like a monster, the foreclosure crisis reared its ugly head once again in South Florida as it prepares to add the shopping center Parkland Commons on its REO property listings. The Bank of America has filed foreclosure proceedings against Broward County-based shopping center, Parkland Commons and its developers MPG Parkland and Prestige Group President Charles H. Monroe III.

Potential homebuyers seeking low-priced foreclose homes for sale flocked to Las Vegas, Nevada where they try to have a part of the over 1 million properties in the city’s foreclosure inventory. In 2008, foreclosed properties in the city reportedly peak over 1 million and the figures are expected to reach 1.2 million in 2009.