Among the new initiatives to help stop foreclosures is the Federal Housing Authority’s refinancing product aimed at assisting thousands of families struggling to cope with the higher mortgage payments of resetting ARM’s. To qualify, families must meet certain conditions which include a good credit record, or more specifically that before the ARM reset all monthly payments were being met on time. This underscores the importance always of acting quickly to address temporary setbacks, of preserving a good credit score, and understanding that to avoid foreclosure and so avoid damage to your credit record, is preferable to walking away from your home. The secret to making the most out of any initiative or willingness of lenders to stem the dramatic increase in foreclosures is acting immediately, when you first are aware that you are going to miss a monthly instalment.
First pursue the options available from your principal lender. You can present a formal plan to repay any defaulted amount and accruing fees over a period of time, while still meeting your current monthly instalments. Or you may ask the lender to agree to Forbearance, where he reduces or suspends payments over a short period of time allowing you to recover from a temporary financial crisis. A Loan Modification could address a longer term financial distress; with reduced payments, or addition of missed payments to the back end of the mortgage. Persuading the lender to agree to a (voluntary) Deed-in-Lieu is more difficult and unlikely to succeed if other liens are registered against your home.
Be sure to request details of the lender’s workout package before you present your plan. These will include a hardship letter, in which you must clearly and briefly set out the reason for your default and your preferred solution or workout proposal. You must be the “owner” of this letter; no third party will succeed in explaining your difficulties better than you. All the papers required need to be submitted together, and be sure to keep your own copy of everything you present, there will be several departments of the bank or mortgage company involved, and nothing will happen overnight. There may be a policy that no workout plan will be considered until payments are in arrears a certain length of time. Yet another reason for you to consider another option; to sell your home.
Get on the Internet and Google up information about the foreclosure laws in your State. Then you will have an idea of how much time you have to sell your home once a delinquency notice is issued. Some Deed of Trust states have a very swift timeframe from notice of default to trustee sale, 60 days or less. This is important to know when assessing your chances if you decide to attempt a pre foreclosure sale and settle as much of the outstanding debt as possible. The lender will have final say on any “short sale” buyer proposition, where downward pressure on house prices in your area has resulted in the loss of all of your equity and more. Your credit record intact will help you get back up on your financial feet and back into the home buyer’s loan market a little wiser than before.
For the last two years the real estate short sale has been a popular topic of conversation with investors as well as home buyers and sellers. Yes, but is the idea of a short sale much like kissing a frog with the hope it will turn into a handsome prince?
A short sale is when a bank or mortgage lender agrees to accept less than a homeowner still owes on a home. Lenders do that when there is not enough equity in the home to attract a buyer and pay all costs of a sale.
Ah yes, but a lender does not have to agree to a short sale and even with those that might consider cooperating it can be very difficult to make such deals work. That also makes home buying very difficult.
Banks have what’s called a loss mitigation department that handles foreclosure short sales. As the economy moves into a recession those departments have been swamped with foreclosures and are often unable to respond to a short sale request before the home is lost to the foreclosure auction.
A real estate agent experienced with short sale deals might be able to help, but less than about 5% of defaulting homeowners are able effect a short sale before the foreclosure.
Oh, but there’s more to it than that…
The big mortgage lenders package up their loans then sell them to investors all over the world. Sometimes the first buyer was Freddie Mac or Fannie Mae. They bought, packaged and sold millions of mortgage loans.
When a loan goes into default and a short sale is requested the lender needs to some how contact and negotiate with each investor who now owns a piece of the loan or loan package.
They ask Mortgage Investor #1 if he is willing to accept $X00,000?
They ask Mortgage Investor #2 if he is willing to accept $X00,000?
They ask Mortgage Investor #3 if he is willing to accept $X00,000?
They ask Mortgage Investor #4 if he is willing to accept $X00,000?
Maybe they can get in touch with everyone who owns a piece of the package and maybe not. Ah, but there’s more…
Often there is more than one mortgage loan on the home and the negotiation process starts over again with those additional investors.
See the problem? With a short sale you not only have to negotiate with the investors, you have to negotiate with multiple lenders, sometimes as many as two or three. And they also must negotiate with their investors.
For homeowners facing foreclosure the question is should you even try for a short sale? Not an easy question to answer, but consider the follow:
A home owner’s credit score will be damaged by going through foreclosure or by giving the home to the lender by means of a deed-in-lieu of foreclosure.
- Foreclosure or Deed-in-Lieu of Foreclosure
Sellers will take a credit score hit of something like 200 to 300 points. If before the foreclosure your FICO score was 680, it would drop as low as 380.
- Short Sale
Some say the hit on your credit score will be less with a short sale than a foreclosure. Others claim the damage will be identical. The short sale will appear as a “pre-foreclosure in redemption status” in your credit history. That may result in a credit score loss of 200 to 300 points. If your FICO was 720 you will see it fall to 520 to 420.
Are you doomed? If you have a foreclosure on your credit history will you ever be able to buy another home?
Sure you will IF you establish a good payment record with your other debts. After your foreclosure you might wait 24 to 72 months before a lender will offer a mortgage loan with a sensible interest rate. The more improvement you can show on your credit report the lower the rate of interest.
Most who have sold a home with the help of a short sale will be considered for new mortgage financing after two years if they show a responsible credit history. So the main advantage of a short sale is that you can be considered for a new mortgage loan within two years over the three- to five-year period required for foreclosures.
What about deficiency judgments? Are they going to squeeze you for every penny? Well, you could be subject to a deficiency judgment for the difference between the loan amount and the amount received by the lender in a short sale. Not to worry, many states have laws that no longer allow that and in the states that don’t have such laws lenders seldom go to the expense of trying to collect from someone who apparently has no money.
Have you heard that you can be taxed on unpaid foreclosure debit? Forget it, because The Mortgage Forgiveness Debt Relief Act of 2007 generally allows you to exclude income from the discharge of debt on your principal residence.
Oh yes, since Washington has decided to bail out the banks they have little incentive to take less than what you owe them on any debit. Can you say, “Good bye short sales!”
Georgia, with its southern climate and charm, its culture, its great entertainment, golf courses, and oceanside attractions, is one of the most desirable places to live in the United States.
Georgia, with its southern climate and charm, its culture, its great entertainment, golf courses, and oceanside attractions, is one of the most desirable places to live in the United States. It is also treasure trove of history; but in spite of its desirability, Georgia foreclosures are occurring at the second highest rate in the entire country.
Great Homes at Bargain Prices
The demand for homes in Georgia may have priced many of them beyond the means of many buyers. But the high rate of Georgia foreclosures does put some Georgia properties within the reach of less affluent buyers, and listings of Georgia foreclosures will let home hunters find attractive homes at attractive prices.
Georgia foreclosures listings present an opportunity for considerable savings to home buyers, and those who know the market and have some good luck can buy Georgia foreclosures at up to a fifty percent discount to market. Even better, there are a wide range of homes in the Georgia foreclosures listings.
Options for Buying Georgia Foreclosures
The available options for purchasing Georgia foreclosures are dependent on who holds title to the property. Government foreclosures in Georgia are available for purchase through bidding. Bank foreclosures can be bought directly through the banks, while some Georgia foreclosures are sold through auctions.
One good source for finding Georgia foreclosures is the Foreclosure Data Bank. It both lists homes in foreclosure and provides information on the best way for you to purchase the foreclosed properties of your choice.
Georgia foreclosures, in recent months, have moved to center stage in the consciousness of America’s educated real estate buyers. The number of homes on the market in Atlanta, in the past half-year, has risen nearly twenty-nine percent, and the Georgia foreclosures rate has nearly doubled in the past year. The glut of unsold homes in the market can lead to terrific bargains for qualified buyers.
One reason for the significantly increased number of Georgia foreclosures may be traced to the wide range of Georgia’s mortgage products. Because some of these products entice people into over extending themselves financially, homes are going to buyers who will soon go into default and lose them to foreclosure.
It is not uncommon for those facing foreclosure to become victims of predatory lenders, foreclosure counselors, and even realtors who will work the situation tot heir own advantage but will invariably cost the homeowners money and in the worst cases, their homes, without doing a thing to eliminate their responsibility for the mortgages on their properties.
Far too many unsophisticated homeowners have fallen prey to unscrupulous business practices as they have fought to save their homes. Any homeowners who think that they e could be facing foreclosure in the near future should talk to the lenders on their properties as soon as possible. They may be able to negotiate lower monthly payments until they are in a better financial condition.
For those interested in purchasing foreclosed properties, information on foreclosed properties is publicly available, and by getting it as early as possible, a buyer can do all the necessary research to make an informed decision about going ahead.
Make a choice between an urban or a rural setting for your proud purchase from among the jewels in Alabama Foreclosure Homes.
Alabama is blessed with economic growth, stable home prices, a low cost of living, and excellent value in very affordably priced homes. The rate of foreclosure filings, although up on last year, is well below the majority of other states, and finding the best of these discounted properties may take you a little time. Especially if you have a longing to move into one of those best cities to be-in the state according to some polls; Helena, Alabaster or Birmingham.
A dream home in Dixie is well within your reach. Average foreclosures sales price is around $67,000 right now, with best in the land savings recorded around 40%. Never has your first investment been so affordable, or so promising to profit!
The pre foreclosure period in Alabama is short, a foreclosure action through the courts rare, and will take between 2 to 3 months only until the sale at the courthouse. If you hanker for a property already under notice of auction sale, make sure your financing is in place before you talk to the seller, who at this stage is the borrower in default. If you don’t have access to the cash, get the details of the default amount from the same excellent listings service that showed you the foreclosed property currently available in Alabama., check out other liens, and if there is some equity in that perfect place, consider assuming the loan in question.
Be aware of Alabama foreclosure law before you contemplate bidding at auction; the borrower has a right to redeem for up to 12 months.
Should you miss both opportunities by design or bad luck, cast your net a little further and seek out the big fish for southern frying in real estate owned Alabama foreclosed homes.
Many people have heard about the foreclosure listings out there, floating around the Internet. However, it seems that many of those same people have a hard time finding a list that they feel they can trust. This may be because many people still think that it just sounds too good to be true.
Hector Milla Editor of the “Free Home Foreclosure Listings” website — http://www.FreeHomeForeclosureListings.net — pointed out;
“… But the fact is there are many non-cost lists out there. All you have to do is simply look for them and you will find them in no time at all. You want to make sure that you are strictly looking for the free lists. Keep in mind though; most lists are only free for a trial window of about seven days. After the trail period is up, you can cancel the membership and never have to worry about being charged a thing …”
With so many foreclosure listings being updated on a daily basis, it should not be hard at all to find just what you are looking for within that window. Whether you are looking for a property in your hometown or one on the other side of the country, there are plenty of lists out there that will show you everything you need for purchasing a home that went through the foreclosure process.
Many of the lists have over a million different homes for you to look over. Many of the listings even have photos so that you can get a better idea of what you are looking at. The best thing for you to do is to make sure that you are checking the list daily as the market moves fast. You want to make sure that you are keeping up with it.
“… If you are looking for property foreclosure listings in your local area, your best bet will be to search for a company that has a special list for your state. This will save you a lot of money and time spent searching through the millions of foreclosure listings …” H.Milla added.
Copyright (c) 2008 Cory Boatright
A “short sale” has certainly been a buzz word with all the foreclosures taking place in today’s real estate market. Distressed homeowners are looking for creative ways to sell their homes quickly. However many Realtors and investors are still unclear on how to get a lender to accept a short sale offer. Here is how you do it.
The following steps are to be used as guidelines on determining what to offer the lender to get a short sale acceptance. It is recommended that you consult a legal adviser before involving yourself in any real estate transactions.
All the steps you need to know:
1. Determine Fair Market Value (FMV)
2. Evaluate Sold Comps Systematically
3. Reveal the ARV (After Repair Value)
4. Figuring out the Lenders BPO
5. What is The House Type?
6. Learning the Loan Types
7. Memorizing the Percentages
8. How to Deal with Junior Lien Holders
9. In Closing
The FMV can be determined by evaluating sold, comparable properties in a similar or close proximity to the subject property. A Realtor will have access to the MLS (Multiple Listing Service) and can create a CMA (Comparative Market Analysis) for the subject property. This analysis will identify sold comparable properties with same square footage, bedrooms, baths, garage and other similar characteristics. Request the Realtors use a sold time frame within 6-12 months when pulling properties in the immediate or surrounding areas. Usually the short sale lender will not consider any sold comparables that are older than 12 months and that are further away than 2 miles from the location of the subject property.
2. Evaluate Sold Comparables Systematically
Contrary to popular and often misguided belief; you can use a formulaic system to work in your favor when determining what to offer on the short sale property. The way this works is like this
Let’s say you have eight sold comparables. You would take out the two highest comps and the two lowest ones and average the rest.
You have a property you think is worth $145,000.
A Realtor pulls a CMA and you find eight sold comparable properties.
The MLS (Multi Listing Service) shows the following sold property values:
$159,000 $154,000 $153,000 $161,000 $148,000 $143,000 $146,000 $151,500
When you use the formulaic approach you would take the two highest sold comparables ($159,000 and $161,000). Take out the two lowest sold comparables which is ($143K and $146K). This would leave four others comps.
$154,000 $153,000 $148,000 $151,500 ———–
You would then take an average by simply adding up the sum of all the sold comparables and dividing them by the total number of properties left. In this case, that number would be four.
Total: $606,500 divided by 4 = $151,625
You can reasonably justify the house may sell for $151,625 instead of the $145,00 you originally estimated.
3. Reveal the ARV (After Repair Value)
This terminology is jargon or slang often used with real estate investors. FMV (Fair Market Value) is similar. The ARV is made up by the amount of repairs the investor thinks the property needs in order to sell quickly on the open market using FSBO (for sale by owner) techniques and not using the MLS.
It can be argued the ARV is more of a guess or suggested value derived by using sold comparables from houses that were NOT sold by a Realtor. One way to explain the difference is a Realtor will typically use a FMV (Fair Market Value) evaluation method. A real estate investor may elect to use an ARV. An appraiser can use both value methods, but generally sticks to the ones that come from off the MLS. The ARV is a less accurate and dependable value than what come off the MLS. It doesn’t hurt to know both.
(continue reading.. How to Short Sale Real Estate and Get Your Offer Approved – Part 2 of 3)
Having to deal with selling your property can be very burdensome. You will find this task very tedious and aggravating. At the end of a long and hard day’s work of accompanying your kids to school, of presentations and paperwork in the office, and skipped meals because of some appointment, when all you want is to sleep it all off, you come home to a bunch of harassing mails and calls from your real estate agent and loan companies. Sometimes it doesn’t even seem right that you should be giving up the fun in your life by going through this hard ordeal of putting up your house for sale. Selling one’s properties need not always be this burdensome and dangerous. By dangerous we mean the danger of facing foreclosures. As busy as you already are with the kids and your work, you almost have little to no time to check up on your mortgage payments. Then voila! It has all accumulated in debts and suddenly you receive a notice of foreclosure.
A foreclosure happens when you are unable to pay mortgage payments on time. You generally have a month or two to pay the balance. Otherwise, the bank or lender would assess your credit history and determine whether it is safe for them to trust that you could still pay the remaining balance. However, no matter how good your credit history may look, unforeseen circumstances can play a very big factor in determining your paying power. Unhealthy family relations which may result in divorce and custody settlements can be financially disturbing and could take up much of your time. The ill health or death of a loved one could also be another shocker and may take up much of the savings you have intended to pay for your debts. Thus, in these cases, the lender or the bank could have little to no choice but to file for a foreclosure. This means that you could lose your house and not earn a single cent from selling it. Your house will be repossessed as a result of your inability to pay the mortgage fees and it will be resold in the open market.
Of course there are ways in which you could avoid foreclosures. One way to prevent foreclosure is of course to make sure that you are able to pay all outstanding balances. Another is to make sure that you are aware of and are able to comprehend vital foreclosure information that will be helpful in stopping foreclosures. Fortunately for the people having trouble with foreclosures, there is a company that is willing to help. This company is called Cashout Options. The company is involved in the purchase of property, even dilapidated ones, in any area within the country. They are generally looking for single family homes or multi-family homes but as an investment company, is willing to take on other types of properties such as apartments, condominium units, buildings, and land.
The company has provided a lot of people with an array of foreclosure solutions that suited them best. They offer a lot of ways in which you could pay off those monthly mortgage payments. By selling your property to them directly, you do not have to worry with these monthly payments at all. They are willing to pay off the remaining and answer any rehabilitation or maintenance costs in the future. Hence, you no longer have to face the danger of foreclosure. If you know what a mortgage short sale is, then you will understand how this company can help you because they are well-versed with the short sale process and they have experts who extend short sale services. By filling out an online request form, or by talking with one of their affiliates, you could be on your way to a speedy sale of your property less the headaches caused by having to immerse yourself in real estate matters. You don’t have to be wearisome of foreclosures at all because Cashout Options will only provide you with the best foreclosure solutions and will guide you in any way possible throughout the short sale process.
With the housing market in a slump, it may seem like a good time to get a good deal on a foreclosed home. Although foreclosures are increasing across the country, you will not get the best bargain at an auction. Consider options outside of an auction with these other methods of purchasing a foreclosed home.
Why Foreclosure Auctions Are Not The Best Deal
When you attend a foreclosure auction, you compete with local investors. These professionals know how much a property is really worth. They will either beat you to the punch or back off so you pay more than its real value. Moreover, many foreclosed homes have a huge mortgage, so banks incorporate that cost into the total starting price.
The market predicts that foreclosed homes will quadruple in 2008, which means there are plenty of choices available. Instead of attending an auction, look for bargains by finding out what the foreclosure laws are like in the state you want to buy. Sometimes they start when the lender sues the homeowner for failing to pay the mortgage, yet no matter how it begins, foreclosure filings are public documents that allow you to contact the homeowner directly.
Foreclosure 101 — How To Buy Without An Auction
A more effective to way to purchase a foreclosed home is through a “preforeclosure,” in which you buy straight from the homeowner. Unlike an auction, the buyer and seller are able to negotiate. This means your likelihood of scoring a great deal on a home greatly improves. You also get to send out a home inspector, which is highly recommended whenever purchasing property.
Another approach is buying a home that could not sell at an auction, and has been put back on the market by the bank. These “real estate owned” houses, or REOs, are usually better for first-time buyers. Work with an experienced Realtor and be realistic about your offer.
Foreclosure Do’s And Don’ts
Remember, the homeowner is not the bank. You cannot just show up and expect to see the home. Send a letter and follow up with a phone call.
Always thoroughly research the properties that interested you. Avoid places with tax liens, multiple mortgages or other legal issues.
Buying a foreclosed home takes patience and diligence, so do not be discouraged if you cannot find something right away. However, with so many homes flooding the market, the chances of finding a good deal are not that difficult.
The real estate market has been known to be the best kind of investment someone can initiate, compared to other forms of investments which are highly risky such as currency exchange and stock trading, real estate or the housing market tends to deliver better revenues at a much steady pace.
As we all know the US is currently going through a very difficult economic transition, some people may call it recession, however we can’t be completely sure if we are in one due to the fact that the definition of such term is not exact, in other words it is quite vague; in reality the effect hearing this word over and over by other people is what ultimately drives a nation into such economic chaos! Taking that in consideration many people who did not originally qualify for loans were given one and when the time for interest changes came, they were unprepared and couldn’t handle the financial stretch, therefore their properties were foreclosed, due to this housing sector many may consider using, and even over-using, the “R” word.
There are many reasons for a property to go on foreclosure but when it does a great opportunity is available for those who are smart investors. Due to the financial crunch banks have opted to accept “discounted payoffs” in order to recover some of their loses and not close the books with such huge revenue discrepancies. Just like all of us, banks rely on cash flow to keep their operations running, so a piece of property which is placed on the “current” market at a high price will most likely not sell due to the fact that no one is willing to pay such a high price, so they have no other option but to discount it until they find an equilibrium price according to current market conditions.
Taking in consideration this last thought, where some people see fear and despair, savvy investors see chance, they see opportunity and great revenues. Las Vegas is known to be a real estate powerhouse, in other words the rate at which this city is growing is incredible so the more the downtown expands the higher the value of nearby houses will be, this is not a speculation, it is a fact. Some casino owners have even opted to move away from the strip to “near by areas” which are usually a few blocks away from the strip, in order to build or re-build their gambling-fueled ventures. A great example is the “Palms” this casino is not located exactly at Vegas strip but non the less, its has great fame and draws a lot of attention, another example is the famous “Rio” which is some blocks away from the main action but it still grabs everyone’s attention; these super casinos which are built away from the strip tend to increase the value of any piece of property which is built near by, hence the brilliant value of Las Vegas real estate market.
Currently, interest rates have been brought down to an all-time-low, from the high 7-10% interest rates to 5% and the best part is that it will stay that way for a long time in order to alleviate the great housing deficit, these are all fixed rate loans so keep that in mind. Also, savvy investors know that during this time of financial need, banks are practically giving these properties away in order to get their cash flow going and keep their balance sheets from scaring stock holders so many will even provide no payments for up to 6 months, just so that the property can be sold, again this is not promotional/sales speech, these are the facts and because bad loans (no doc, etc) have been removed, investors know that the new “stated” loan requirements will take their interest rate related risks away. Taking all of these facts in consideration, property foreclosures in Las Vegas represent a great opportunity for buyers and and investors alike.