I'm addicted to American Idol. That's right, I said it. Since the popular reality talent show first debuted in 2002, I have watched each choreographed moved and every off- pitch note religiously. And thanks to my ever growing collection of US and People magazines, I have faithfully followed the contestants as they transitioned from their small-town lives into reality- star limelight. So you can imagine my disappointment when the blogosphere and gossip columns were blowing up this week with news that season three Idol winner, Fantasia Barrino, is the latest celebrity to have a home fall prey to the foreclosure epidemic. Fantasia is facing foreclosure on her home at 5500 Bevington Pl. in Charlotte, NC, according to several news sources.

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The New York Post reported that the gargantuan 6-bedroom, 6,500-square-foot house — which Fantasia bought last year for $1.3 million — will be auctioned off Jan. 12. The two-story stucco home is located in one of Charlotte's ritziest neighborhoods on a golf course. Currently valued at $1.1 million, the home boasts a large arched wooden front door and is decorated throughout with exotic art and a duel sweeping staircase greets visitors in its front hall, reports the Post. The singer also has a second home a couple miles from the one scheduled for auction in Charlotte, that was purchased in July 2004 for $740,000. Records show the second home is not in financial trouble.

The former Idol winner is accused of defaulting on a $68,000 loan from Florida-based Broward Energy Management, according to court papers. The company allegedly loaned Fantasia the money to pay back-taxes she reportedly owed the IRS. Fantasia has repaid $10,000 of the loan, according to the court documents. The Post reported that 'Fantasia took a $1-million mortgage on the property in Charlotte from the Bank of America.

With an autobiography appropriately titled 'Life is Not a Fairy Tale,' looks like Fantasia has a new chapter to add to her saga.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@HomeFinder.com.

Some troubled homeowners on the verge of losing their property are starting to feel extra thankful this holiday season. Lending giants Freddie Mac and Fannie Mae, which were seized by the government in September, announced last Thursday that they will contact an estimated 16,000 borrowers who are facing foreclosure or evictions between November 26, 2008 and Jan. 9, 2009. Those proceedings will be delayed and the homeowners will have a chance to work with mortgage servicers to modify their home loans into affordable payments.

The streamlined modification program is scheduled to launch December 15. Foreclosure attorneys and loan servicers will be instructed to use the additional time to reach out to borrowers who have defaulted on their loans and continue to pursue workout options. The initiative applies to loans owned or securitized by Fannie and Freddie.

Freddie Mac says it is on track to help three out of five troubled borrowers avoid foreclosure this year. The suspension, 'builds on this momentum and provides a new measure of certainty to many of these families during the holidays,' Freddie Mac CEO David Moffett said in a statement.

Risky borrowers targeted
The program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure.

While loans defaults across the country are growing faster than most banks can keep up with, other lenders, including JPMorgan, Bank of America and Citigroup, have recently become more aggressive about modifications to mortgage agreements. Officials from the Treasury Department and the Federal Deposit Insurance Corp. (FDIC) are also working on a new proposal that could help some 3 million homeowners who are behind on their mortgage payments and help keep them in their home. Sheila Bair, the chairwoman of the FDIC, has been the leading proponent of the plan and first discussed the idea publicly in late October.

The reality of loan modifications
The issue of loan modifications is a hot topic out there in the blogosphere. There are wide ranging opinions from complete outrage for what is viewed as rewarding bad behavior to jubilation that something is finally being done to help Main Street Americans. It's hard to say what the right solution is in these dire times. But one thing is for sure, it has now become hip to announce billion dollar loan modification efforts without the right muscle to back up the foreclosure fighting claims. The government's HOPE NOW initiative launched earlier in the year has had little impact on reducing foreclosure rates. We'll just have to wait and see if these new modification programs are more than just lip service.

Read more about Fannie and Freddie's streamlined modification program at FannieMae.com.

Can the private sector fix the foreclosure crisis through loan modification? Or, does the federal government need to put forth a comprehensive plan?

With Congress considering a return to Washington this month for another economic stimulus effort, the National Association of Realtors has proposed what they are calling a 'four-point plan', which they want included in any future stimulus plan being put forth. The trade organization, which represents 1.2 million members across the country, says more is needed from the government in order to boost the economy and calm jittery real estate markets.

NAR officials say such measures are needed because the housing sector has historically lifted the country's economy out of past economic downturns. Many economists have also argued that stabilizing real estate markets must be the core of any additional economic stimulus bill. Sheila Bair, the chairman of the Federal Deposit Insurance Corp. (FDIC), has argued that more has to be done to help homeowners struggling with foreclosure. Bair has told Congress that the government is 'clearly falling behind the curve' on the foreclosure issue, according to the Associated Press. The FDIC has proposed that the government put $24 billion toward helping 1.5 million borrowers by guaranteeing modified mortgages through the end of next year, the AP reports.

Paulson resistant
At a hearing on Capital Hill on Tuesday, Democratic lawmakers told Treasury Secretary Henry Paulson that he must reverse course and spend some of the $700 billion in bailout funds to keep individual homeowners from losing their homes, according to the Wall Street Journal. Paulson is opposed to Bair's proposal to use funds from the bailout to help modify home loans. He reiterated his opposition to using any of the money to buy mortgage-backed securities or individual mortgages, although that was his original plan in September when he asked Congress for an unprecedented amount of money to keep global credit markets going.

NAR's plan includes:

• Making the $7,500 first-time homebuyer tax credit available to all buyers and eliminate repayment requirements. Currently, the credit's limited availability and repayment requirement severely limit the credit's use and effectiveness.

• Making the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent. New rules for 2009 will reduce them. Now is not the time to limit mortgage affordability.

• Getting the Treasury relief program back on track and target more funds to mortgage relief. Create a federal mortgage interest buy-down program to make below-market rates available and stabilize home prices.

• Permanently bar banks from engaging in real estate brokerage and management. The banks have proven they have enough to do to simply manage the loan process. Banks should not manage home sales and purchases.

According to the latest quarterly survey by NAR, distressed sales – foreclosures and short sales – accounted for 35 to 40 percent of transactions in the third quarter, pulling down the national median existing single-family price to $200,500. This is 9 percent lower than the third quarter of 2007. A year ago, when there were significantly fewer distressed transactions, the median price was $220,300.

To know surprise, the steepest declines in single-family home prices in the third quarter were in three California markets: the Riverside-San Bernardino-Ontario area, where the median price of $227,200 dropped 39.4 percent from a year ago, followed by Sacramento-Arden-Arcade-Roseville at $212,000 — down 36.8 percent from the third quarter of 2007 — and San Diego-Carlsbad-San Marcos, where the price dropped 36 percent to $377,300.

Regional median single-family home prices

Western region: $266,300 in the third quarter, a 21.4 percent below the third quarter of 2007.

Midwest region: 5.5 percent decline to $159,900 in the third quarter from the same period in 2007.

Southern region: $174,200 in the third quarter, down 3.7 percent from a year earlier. The strongest price increase in the South was in the Tulsa, OK, at $139,800, up 5.1 percent from a year ago, followed by Amarillo, TX, with a 4.2 percent gain to $128,300, and the New Orleans-Metairie-Kenner area of Louisiana at $166,800, up 4.1 percent.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@HomeFinder.com.

The foreclosure crisis doesn't appear to be going away anytime soon. More than 4 million American homeowners with a mortgage were at least one payment behind on their loans at the end of June, and 500,000 had started the foreclosure process, according to the most recent data from the Mortgage Bankers Association.

While many lenders and banks have been under heavy scrutiny for being too slow to rewrite troubled loans, a recent move by Citigroup may give homeowners on the edge some much-needed breathing room. Citigroup announced late Monday that it won't initiate a foreclosure, or complete a foreclosure sale, on any eligible borrower who seeks to stay in a home if it is the borrower's principal residence, the homeowner is working in good faith with Citi and has sufficient income to make affordable mortgage payments.

In addition to that, according to the Associated Press, 'Over the next six months, Citi plans to reach out to 500,000 homeowners who are not currently behind on their mortgage payments, but who are deemed as potentially needing assistance to keep current with their payments. This represents about one-third of all the mortgages that Citigroup owns, the bank said.'

Citigroup's plan of action
Citi plans to devote a team of 600 salespeople to assist in workouts with targeted borrowers by adjusting their rates, reducing principal or increasing the term of the loan.

The bank will initially target homeowners in geographic areas with higher-than-average unemployment and foreclosure rates, primarily in Arizona, California, Florida, Michigan, Ohio and Indiana. The program is expected to affect about $20 billion in mortgages.

Just last month, former U.S. Federal Reserve Chairman Alan Greenspan told Congress that stabilization of U.S. housing markets was a necessary precondition for the economy to heal.

While loans defaults across the country are growing faster than most banks can keep up with, other lenders, including JPMorgan and Bank of America, have recently become more aggressive about modifications to mortgage agreements. Officials from the Treasury Department and the Federal Deposit Insurance Corp. (FDIC) are also working on a new proposal that could help some 3 million homeowners who are behind on their mortgage payments and help keep them in their home. Sheila Bair, the chairwoman of the FDIC, has been the leading proponent of the plan and first discussed the idea publicly in late October.

With the economy possibly slipping into a deep recession, more layoffs are expected. This could open the floodgates to more loan defaults that may aggravate the already-bloated foreclosure market. By taking a proactive approach, Citigroup isn't waiting until it's too late to deal with delinquent borrowers. I think this is a very smart decision on their part, especially if they want to survive this economic tsunami.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@HomeFinder.com.

The sales of foreclosed properties are having a noticeable impact on home prices and increased sales in major real estate markets across the United States. In August, 23 of the 25 metropolitan statistical areas (MSAs) tracked by Radar Logic's Residential Property Index experienced year-over-year home price declines, while 12 of the metro areas saw sale transactions increase. Both the price declines and the transaction count increases are due, in part, to growth in heavily discounted foreclosure-related sales, according to the Radar Logic's market report.

Motivated transactions, which Radar Logic defines as sales at foreclosure auctions and sales of foreclosed property by financial institutions, increased in all 25 metro areas since 2007 and in 22 MSAs since July. In some markets, the increase in transaction counts also reflected a seasonal uptick in market activity.

Radar Logic's key findings:

• In California, Arizona and Nevada, deep price discounts associated with foreclosures appear to have attracted buyers. Seven of nine markets that saw sales increase from a year ago were located in those states.

• The nine MSAs that saw sales pick up from a year ago were Sacramento (up 74.9 percent year-over-year), San Diego (52.9 percent), Los Angeles (47.4 percent), San Francisco (32.9 percent), Washington, DC (30 percent), Las Vegas (29.5 percent), Phoenix (22.9 percent), San Jose (16.3 percent) and Minneapolis (3.3 percent).

• Despite seeing a big increase in sales from a year ago, Los Angeles and Las Vegas saw transactions fall slightly from July to August.

• St. Louis saw the biggest decrease in transactions from July to August (down 15.7 percent) and year-over-year (down 43 percent), but remained the fourth-best performing market in year-over-year price appreciation (-4.2 percent).

• Five markets where sales hadn't bounced back to 2007 levels in August nevertheless saw sales pick up from the month before. Those markets were Boston (up 24.1 percent from July to August), Philadelphia (19 percent), Chicago (9.7 percent), Detroit (up 6.9 percent) and New York (0.2 percent).

Patience is a virtue
'While increases in motivated sales have put downward pressure on prices, it is important to bear in mind that prices have fallen substantially in transactions that are not related to foreclosures, said Radar Logic CEO Michael Feder in recent press release. Twenty MSAs have seen prices for transactions we do not classify as, 'motivated' give back over 50 percent of the appreciation they experienced during the height of the housing boom. This indicates that home prices have made substantial progress toward equilibrium, though they may fall further before they reach it.'

Feder also said: 'The current initiative to reduce new foreclosures being led by the Federal Deposit Insurance Corporation (FDIC) could, if enacted, play an integral role in near term prices.'

While it can be awfully frustrating right now if you're trying to sell your home and you're living in down markets like California, Florida or Las Vegas, but there's nothing much the average homeowner or Realtor can do to make this market speed up its recovery. It's a matter of waiting out a storm that was way overdue. Home sellers need to keep up with local market conditions and be realistic when pricing their property. The days of making 30 percent or more on your home is long gone. This doesn't mean it's impossible to sell your property under these strained conditions, it just means it's going to take a little more practical planning and, most of all, patience.

Interested in buying a foreclosed property? HomeFinder.com's Foreclosure Guide is packed with detailed advice that will guide you through the entire process. And learn more about your new community on our local Snapshot pages.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@HomeFinder.com.