Many, if not all, of us have been touched by the current state of the economy. This is a very scary time with people losing significant portions of their retirement, getting demotions at work, companies going out of business and people getting laid off. Foreclosure can happen to anyone. Today I wanted to share ten tips for avoiding foreclosure from www.hud.gov.
If you are having trouble keeping up with your mortgage payments or are not able to make them at all:
1. Don’t ignore the problem. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
2. Contact your lender as soon as you realize that you have a problem. Lenders do not want your house. They have options to help borrowers through difficult financial times.
3. Open and respond to all mail from your lender. The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights. Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options. Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at www.hud.gov.
6. Contact a HUD-approved housing counselor. The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287.
7. Prioritize your spending. After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit card and other “unsecured” debt until you have paid your mortgage.
8. Use your assets. Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies. You don’t need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.
10.Don’t lose your house to foreclosure recover scams! If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
With the increasing rate of foreclosures nationwide including Los Angeles – the largest city of California is attracting homebuyers and real estate investors to pour their money to buy them. Los Angeles foreclosures occur in the situation where lender repossesses the mortgage property and then sells it to recover the default loan.
But before sailing the boat into Los Angeles foreclosures one should educate oneself about the process involved and get ready with vital research with strong track. This can be done without visiting to a real estate broker that could be burdensome. Now days, web based real estate listing services are available which help you in your goal to get a right property. These services are flooded with necessary pre-foreclosure and foreclosures information.
All states have their different laws. Before venturing in Los Angeles foreclosures buyer should get familiar with the foreclosure law prevalent in the local state of his desired property. For example, some states like Florida and New York follow the judicial process which require the lender to file a lawsuit against borrower and when the court orders, only then the property is repossessed by the former party. Whereas, states like Texas and California follows the non-judicial process.
So, for prospective home buyers and investors, there are three different opportunities where he can bargain for Los Angeles foreclosures –
Pre-foreclosures: here the buyer can directly contact with the seller, inspect the property and close the deal. Public Auction: in this situation, the minimum bid is offered and whosoever bid the highest, will be the winner. But one should get ready with the finance as it required the cash payment. Moreover, there are cases where one do not get chance to inspect the property and know the actual status. Bank-Owned Properties: when the property is not sell out during the auction, the listing is sent back to the bank where the lender pay all taxes and get some necessary reconstructions done to take the property into real estate market.
Through online listings of Los Angeles Foreclosures one can get a series of property with a single search criteria like zip code, location, number of rooms, price etc. We have options of Los Angeles commercial foreclosures, repo homes and federal properties.
One should also check the status of taxes. It should be confirmed before finalizing the deal that no back taxes (that are to be paid to government on priority) are attached to the land which could move up the purchase price.
With the economy in state that it is currently in, many people are dealing with the threat of foreclosure. From personal experience I can tell you that nothing is more gut-wrenching and nausea inducing then the possibility of losing your home. Their is is no magic bullet solution to avoiding foreclosure; just your rights within the law, and the actions that you take as a homeowner to deal with, and prevent the process.
Step 1: Communicate.
The bank does not want your house; they want your money. A house might be a valuable asset, but to bank, it is a lose of liquidity and a hassle. This means that if you communicate with your lender as soon as you realize you might not be able to make a payment, they will be willing to work something out with you. Though they are perfectly willing to begin the process and take your home, banks would rather work out some sort of plan that will you in your home, and your cash in their pocket.
Step 2: Educate Yourself.
Though many foreclosure laws are universal on a national level, each state has specific laws governing the exact procedures surrounding the process. The only way in which you are helpless is if you do nothing. Contact local government counselors who will offer free, effective strategies for dealing with foreclosure. They will also inform you of your legally mandated rights, and what the bank can and cannot do to you during the foreclosure process.
Step 3: Be Proactive.
Stop feeling sorry for yourself and do something about your situation. Help is available to you if you are willing to step up and seize the situation. Yes, the situation is frightening and rustrating. Yes, you feel helpless, but that is a state of mind that you chose. The government will help you; your bank will work with you, but you have to educate yourself and become active. You are your greatest ally.
The consequences of foreclosure can be far reaching. While foreclosure laws vary from state to state, general strategies exist that apply in most situations. It should be kept in mind that stopping foreclosure does not always imply keeping the house. Stopping a foreclosure may only benefit the home owner by being able to keep a foreclosure off of their financial record. Keeping something like this out of the financial history can be beneficial as the home owner tries to get back on their feet. They will be more likely to be approved for a new home loan or allowed a faster approval for a new apartment.
One way to stop a foreclosure is to pay off the defaulted loan amount during the pre-foreclosure grace period. This grace period is the last chance the home owner has to stop the foreclosure process before being forced to leave the residence. Each state has their own rules as to how long the grace period must be. The law requires that a grace period be given before an attempt to take the house back is made by the lender. This allows the home owner a chance to rectify the situation before the lender takes more drastic actions.
The homeowner can avoid a foreclosure in their financial history if they can sell their property to another person and make enough money from the sale to cover the balance of the mortgage. Since the new buyer will pay off the original lender, the former home owner’s record will not reflect that they lost their home because of foreclosure, it will just show up as a normal sale in their past. A person can buy the property from the owner or from the lender in a public auction after the grace period. If the home owner can find a buyer willing to pay more than the remaining amount of the loan, the home owner may even be able to walk away with some cash in hand for the deal.
If the lender is willing to accept less money than what is left of the loan, they may approve the owner to complete a short sale. If the home owner can find a buyer for the property for an amount lower than what remains on the loan, the lender will have the option of approving the sale and forgiving the difference, approving the short sale and demanding the difference of the loan, or refusing to approve the sale and allowing the house to fall into full foreclosure status, public auction and all.
It may seem like the above listed information is “not good enough”, but quite frankly, few options exist for keeping a home after a foreclosure has already been initiated. This does not mean that a person has to have the rug torn completely out from under them, it just means that a person shouldn’t expect miracles. While it may take some time and a willingness to adapt to the new change, recovering from a foreclosure is possible. Recovery is also possible if a person avoids a foreclosure but is still required to leave the residence.
Fighting a foreclosure alone can be a stressful event in a person’s life. Hiring a lawyer specially trained to deal with banks and lenders may stall the process considerably in favor of the home owner. Even a few extra days to fight the process can help the home owner prepare for life after losing their home. The home owner should never forget that they have rights during the foreclosure process as well, and a lawyer can make sure that those rights remain in tact.
Is it that your recent financial condition is worrying you? Do you feel that your property is now on the brink of a foreclosure? Do you think that you are alone in this suffering? Well not at all because with the economic meltdown now there are many like you finding ways for filing Massachusetts bankruptcy.
So, do not just shy away and suffer alone. Who told you that it’s your fault that you have failed to meet both the ends and now facing foreclosure on your home; after all you were fulfilling the great American dream’ of owning a home. And now the state law has come up with solutions to deal with the most harrowing issue., i.e., your home foreclosure. Now you can go with the option of loan modification to stop Massachusetts foreclosure.
Let’s do it step wise. First stop panicking and do not be into you are actually robbing Peter to pay Paul. In fact there could be a thousand reasons like, sudden unemployment, devastating credit card debt, prolonged illness, death in the family, or even for poorly managed finances, which can lead you to financial imbalance. So it’s much better to stay weathered. There are certain important aspects, which you should know about Massachusetts foreclosure prior leaving your house to the lenders.
Talk with your lender even if you are behind on your mortgage payment. Honestly, your lenders have no interest in foreclosed properties and he will be much interested in collecting at least something on a loan rather than nothing at all. So talk to him to find out any ways of negotiation. Be proactive and work out for a foreclosure avoidance solution. The Massachusetts foreclosure law has introduced a number of options and one such option is the ‘deed in lieu of foreclosure’. Consult the Massachusetts foreclosure attorneys for this to enter into an agreement with lender. In lay language, a deed in lieu foreclosure is all about giving back the property to the lender if you are not capable of paying the remaining balance of the loan. Boasting a team of experienced attorneys the Massachusetts foreclosure center has helped hundreds of people in saving their homes. When the wolves are at the bay, consult the Massachusetts foreclosure center to preserve and protect your home from foreclosure.
If you are in the real estate business, then you might already know that the cheapest place to buy the best property is the real estate foreclosure auction. You can actually get the property for peanuts. This is a very profitable strategy for professional real estate agencies.
You should have a fair knowledge of the market if you want to get the best deals. You have the option to subscribe to periodic e-newsletters.
If you do not have enough knowledge about the local market then you might get yourself into some trouble, as you might later find out that the realty rates were already too low in that area.
First of all you need to prioritize your market and then remain in touch with the current affairs for quite some time. After that you should start bidding in auctions.
You can do some smart business and deal directly with the owner of the realty before it is put up on auction. Actually this is totally ethical and more profitable for you. The mortgage lenders also like this as it becomes a lot easier for them, rather than organizing and managing an auction.
However, if you do not reach an agreement over the rates with the other party you can always go for the bidding. The bidding, mortgage and foreclosure laws vary from state to state, so you would have to do a bit of research in this area.
If you know all the provisions regarding the whole process then it will be a lot easier for you to win the bid, by providing you an intellectual advantage over the other bidders.
What Should I Bid?
You should never bid anything that is greater than 20 % of the actual value of the property that is being auctioned. The estimated actual value can be found out from the property evaluation reports.
It is a standard practice to have a look at the property before you bid on it. You can also hire the services of a professional inspector, if you want.
In some states the laws require you to make one hundred percent down payment in case you win the bid.
So, as I said before, you will have to study the laws of foreclosure in detail. This is very important otherwise you will be stunned if you would be asked to make the full payment at the auction site.
Most people believe that foreclosure laws are designed to hurt rather than help them. Not so. The truth is, foreclosure laws have evolved to protect the borrower -not the lender. The foreclosure process gives you, the borrower, specific periods of time in which to:
• bring your loan current by making up the missed payments (known as “reinstatement”), or
• pay off your loan in its entirety (called “redemption”).
If neither of these options is feasible, you will still have time to prevent your property from being sold at a public auction (the foreclosure sale). You will get the most benefi t out of the foreclosure process if you envision it as a “window of opportunity” to resolve your financial problems. During this period, you have time to learn about the foreclosure process and implement a strategy to stop foreclosure. Another basic misconception about foreclosure is that lenders want to foreclose.
Nothing could be further from the truth! Lenders are in the business of loaning money—not owning real estate. Lenders are also reluctant to incur the costs of a foreclosure. For example, if your lender is forced to foreclose, it will not only lose your back payments, but it will also incur foreclosure expenses, taxes, insurance, wear and tear while you (or your tenant) live in the property, rehabilitation expenses to refurbish the property for sale, and a real estate agent’s commission once the property is sold. As a result, many lenders will go out of their way to work out a resolution– short of actually foreclosing–if given the opportunity to avoid paying these costs.
Communicate With Your Lender
At the heart of stopping your foreclosure is communicating with your lender. Don’t shy away because you’ve missed payments, concerned that you will miss some payments in the future, or that your property has already gone into foreclosure. Whether you communicate by telephone, le_er, email, fax, or in person, you will have a much easier time stopping (or at the very least, delaying) the foreclosure if you talk to your lender rather than adopting a code of silence. The first step is to determine who your lender actually is. (This is no small feat these days with lenders selling their loans to other lenders like hot potatoes.)
If your property has already gone into foreclosure, the fi rst person you will be dealing with either the foreclosing trustee, or the attorney for the lender. The trustee is responsible for handling the foreclosure process if it is nonjudicial If it is a judicial foreclosure, you will most likely be contacted by a process server, sent by the lender’s attorney. But the problem is that you need to communicate with your lender, not the trustee or the attorney.
So you should request from the trustee or the a_orney, the name, telephone number, and address of the foreclosing lender. In the unlikely event that they refuse to disclose the name of your lender, you can look on the Notice of Default, or the summons and complaint, or telephone the customer service department of a local title insurance company. Another situation may occur where you discover the name of your lender, but it turns out to be a servicing agent rather than the party that actually holds the deed of trust or mortgage.
A servicing agent is a company (sometimes it can be a bank, mortgage company, or private corporation) that is hired by the actual lender to “service” the loan, including the collection of payments, issuing of payment coupons and late notices, monitoring the impounding of insurance and tax payments, and handling foreclosures if necessary. Fortunately, most servicing agents will disclose the name of the lender. If they won’t, you may be forced to negotiate with the servicing agent. In either event, follow the guidelines in this book to communicate and negotiate with them.
Do not under any circumstance ignore your lender’s contacts. Your goal should be to respond to every phone call or letter. Diffi cult as it may be to talk about your financial problems, be polite and cooperative. Follow up all telephone calls with a letter to the person you spoke to, confi rming what was said. If you’re not in when a call comes, return it as soon as you can. When you receive a le_ er from your lender (always keep the original), immediately write a letter in response. It is important to establish a paper trail so you can prove to your lender (or a court, if necessary) that you have been cooperative, especially during the initial stages of the foreclosure process. It is also important to send copies of all of your letters to:
• the lender’s CEO
• the branch manager (if applicable)
• the loan offi cer who helped you obtain your loan, and
• any other person you know by name at your lender’s office.
Properties appearing at Miami foreclosure listings are primarily the judicial foreclosed ones and sold through open auction. Florida foreclosure law is applied to foreclose and sale properties defaulting in home equity loan and home tax payment in Miami. Low of redemption is applicable here. But, redemption facility is restricted only till the date of auction. It means, the homeowner can stop the foreclosure and auction between approval of foreclosure notice and auction date. The time gap here is thirty days. To stop auction, the homeowner has to pay the outstanding amount and foreclosure expenses. If the homeowner can not pay this on or before commencement of auction, he/she looses right of redemption forever on the said property.
All mortgages on residential or commercial properties and condominiums for sale are foreclosed in equity. County court of Florida conducts separate trial all parties having interest in the foreclosing property. The county court approves the foreclosure notice. But, publishing it in local dailies is the responsibility of petitioner’s attorney. No foreclosed property is sold without proper advertisement of sale notice. Other people who can advertise regarding this foreclosure sale are the lender (or the petitioner) and court clerk. After the first publication of this notice, the homeowner can request for review of the notice. Hearing of this review plea is immediately commenced in the county court and all the complaints are verified minutely once again. If the court finds substantial default history of the home owner once again, then foreclosure notice is approved.
Before intimating county court regarding residential or commercial properties and condominiums for sale, the lender has to give twenty days interim time period to the land lord for repayment of outstanding amount. This period in legal terms is also known as pre-foreclosure. In this time, many landlords sell their property to avoid unnecessary legal hassles.
All properties appearing at Miami foreclosure listings are sold only through open auctions. Its open to all and all participants have to deposit a security amount (as mentioned in the sale notice advertisement) to bid in the auction. The said property goes to the highest bidder if payment of the remaining amount within a fixed time period by the bidder. Otherwise, the security is confiscated and court orders for a fresh auction.
As of July 5, 2009, homeowners with mortgages finally have some rights in Michigan. In the past, if the home went into foreclosure, the lender could just advertise for four weeks in a legal newspaper that only went to attorneys, and the house could be sold at a sheriff’s sale. While the lender was required to post the notice of sale on the property (e.g., nailing it to a door), homeowners often had no actual notice that they were about to lose their homes.
Meanwhile, if a homeowner had problems paying the mortgage and wanted to discuss a loan modification, that was like arranging an appointment to talk to the real Santa Claus in person. Calls went unanswered or homeowners were transferred from phone number to phone number with little success. Some spent hours listening to phone menus that led them to nowhere. Since mortgages are often assigned from one lender to another, or are placed with companies whose duty was to “service” them, it was often impossible to find your way to anyone with information about the loan or the authority to deal with you and your loan.
All that changed when the Michigan Legislature enacted new provisions to the foreclosure law in Michigan. Under the new provisions (contained at MCLA 600.3404 through 600.3205e), before foreclosure proceedings can be commenced on a primary residence, the lender must actually give you the name, address, and telephone number of someone you can contact with authority to discuss a loan modification with you.
In addition, the lender must give you the names of housing counselors who can help you navigate your way to a loan modification. If you request a meeting with the person in authority, then no foreclosure proceeding can be commenced for 90 days. If you reach an agreement and comply with it, the foreclosure cannot go forward. If the lender will not agree to a loan modification, you have a right to go before a judge.
The lender even has to advise you of your right to an attorney and give you the number of a lawyer referral service of legal aid. All of these notices must be mailed to you by first class mail and certified mail. In addition, the lender has to publish a notice in the newspaper that the homeowner has the right to contact an attorney, and/or the lender, and/or a housing counselor. The homeowner has a right to go to court. That notice must also provide contact information for the lender and advise the homeowner that if an agreement is reached to modify the loan and the homeowner complies with the agreement, there will be no foreclosure. The notice must advise the homeowner that if he/she requests a meeting with the lender, foreclosure proceedings cannot be commenced until 90 days after the date that notice was mailed to the borrower.
Under MCLA 600.3205b, if a homeowner wants to discuss a loan modification, he must contact a housing counselor from the list provided within 14 days after the list of counselors is mailed to him by the lender. Then the counselor has 10 days to contact the lender. After that, financial information regarding the homeowner is provided to the lender and an in person meeting between the homeowner and the lender is arranged. The counselor may attend if the homeowner requests that. If a loan modification agreement is not reached, then the lender must work with the homeowner to determine if he is “eligible” for a loan modification. To be eligible, the total housing costs (including the house payment, property taxes, insurance, and any homeowner fees) must not exceed 38% of the homeowners’ gross income. This ratio could be reached if, for example, the lender reduced the interest rate or extended the length of time for repaying the loan or stalled payment of part of the loan until the end of the loan. The lender has to provide any calculations that it did to the homeowner.
If the homeowner is “eligible” for the modification under the guidelines above and in good faith and the lender has offered a loan modification to the homeowner (but the homeowner does not agree to it), or if the homeowner is not eligible for loan modification, then the lender can proceed with a typical out-of-court sheriff’s sale.
Unfortunately, this law has a “sunset” provision. It will expire on July 5, 2011 if it is not extended by the Legislature. Meanwhile, this law is certainly good news for homeowners in Michigan, especially those whose houses are “under water” or those who have become unable to pay their housing costs in full each month.