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Posts Tagged ‘Bank Foreclosure’

Preventing Foreclosures

Losing a home is something that affects many of us, disrupting our lives and tearing our families apart. With an increase of more than 200% in recent years and no signs of decline, now is the time to ensure that you do not become part of the statistics. What can you do to prevent foreclosure? You will need to make decisions and focus on your desired outcome.

Temporary Delay in Payments

Do not delay in communicating with your lender. It is very important to contact your lender as soon as begin having difficulties that may lead to foreclosure. Lenders are interested in working with you so you can stay in your home ; they are not interested in selling your home. Work out a temporary delay in payments as you work at finding a way to keep your home. Be focused and diligent in working with your lender towards a solution. Be prepared to answer questions honestly about your finances.

Legal Advice

Speak to a trusted attorney. Stay away from « quick fix » attorneys. They may not give you the best advice as many times homeowners will be pushed to file for bankruptcy prematurely or unnecessarily. Facing a foreclosure can be very emotionally taxing and you need professional help. A legal representative’s advice may bring solution you haven’t considered as possibilities. Don’t wait until foreclosure is imminent. Get legal advice when you first become worried about making your mortgage payments.

Renegotiation

Lenders want you to be able to your mortgage and keep your house. They’re in the lending business, not in the repossessing business. Talk to your lender about renegotiating the terms of your mortgage. This is not a short term fix. This is a long term solution, with both lender and homeowner getting what they want. Lenders need to see a profit to stay in business so get all the details about fees and penalties, which may be rolled into the mortgage.

Refinance your Debt

Debt counseling with your lender can help you see how all your outstanding debt can best be handled. If you home was financed at a high interest rate, you can reduce your monthly payments by refinancing at a lower interest rate. A word of caution : be wary of fraudulent refinancing schemes. If you are having difficulty with your mortgage payments, chances are you’re having trouble with some of your other debt. Debt consolidation may be an option for you.

Loan Modification

A loan modification, a change in the terms of a loan without the need for complete refinancing, is considered the best way for homeowners to avoid foreclosure and remain in their homes. The subprime mortgage industry has given new life to loan modifications. The primary reason for foreclosure is the adjustable interest rate. With a loan modification you are able to go to a fixed interest rate, helping you adjust your current payment and allowing you to stay in your home. You have the ability to lengthen your loan payment so you will have a lower payment, making it easier to pay your bills.

Short Sale

A short sale is when a lender is willing to accept a discount on a mortgage to sell the home and avoid foreclosure. In the event that you are unable to keep the house, selling it yourself is preferable to repossession by the lender. If your home does not have enough equity the lender may agree to accept less than what is owed against it, resulting in a short sale. Get professional advice, such as a lawyer or real estate agent. They can be a tremendous help when negotiating with the lender.

Sell your Home

Selling your home may not be the option you want to exercise but if you can sell it and pay off your mortgage you will avoid foreclosure, providing you sell before the foreclosure date. Contacting a real estate agent familiar with foreclosure investing is the best route to take, in this situation, to sell your home.

Deed in Lieu of Foreclosure

You may have the option of signing the home over to the lender in exchange for having the lender canceling the loan. The lender agrees not to initiate foreclosure proceedings and to terminate any that are existing. Be sure the lender forgives the amount of loan not covered by the sale. You will probably be required to list your home for a short period of time before the lender will accept a deed in lieu of foreclosure.

File for Bankruptcy

Filing for bankruptcy can stop the foreclosure process and give you time to work out a plan to keep your home. Get professional advice – this is no time for trial and error. Keep in mind the process may still continue and your credit rating will suffer for 7 years.

Bank foreclosure lists provide a potential buyer with information on foreclosed properties that are up for sale. When a property is foreclosed, a lis pendens or default notice is filed and becomes a public record. For those seeking to purchase foreclosed properties, getting their hands on this document is the first step.

Lists of foreclosures can be accessed through local real estate agencies, government entities and even magazines that specialize in the area of foreclosure. However, there are foreclosed homes that are for sale that have never been lived in or do not belong to a homeowner. These properties are built by builders who reach the end of their loan period without finding buyers for what they are building. The banks that issued the loans to the builders then take possession of the property and put it up for sale. Properties like these usually do not appear on lists and are commonly handled by real estate agents.

A buyer can also go directly to lenders or banks and ask them for a list of their REOs or Real Estate Owned portfolio. When asking for this list, it is better to concentrate on one or two areas only and to give particular information on what kind of property is being sought. A bank prefers to deal with buyers who know what they are looking for and who provide specific criteria on what property they want to buy.

After identifying the preferred location, a buyer can ask the bank to provide a list of properties in the area or areas he has chosen that have been sold within the last few months. This list can be the buyer’s guide in making a price comparison. For a better analysis, the buyer can hire the services of a real estate agent to work on the comparison. There are also Web sites run by real estate associations that provide price lists of properties in various areas.

Buying foreclosed properties owned by banks is a relatively low-risk endeavor and a sound investment. Banks usually take care of eviction, taxes, liens and other obligations before they sell the property. This is because banks are not selling to make a profit but to unload the property and get back the unpaid balance of the mortgage loan that they issued to the homeowner who defaulted. REOs are not liquid assets and are more a burden than an asset to a bank. A buyer who purchases from a bank can also ask the same bank for financing. Since banks are always eager to unload real estate properties, they will likely provide a favorable financing scheme to the buyer.

Acquiring bank foreclosure lists is the first step towards a profitable real estate investment. Getting these lists will give the buyer an idea of what properties are available and how much they are worth. A bit of patience in studying these lists will go a long way towards making a great profit for someone who wants to get into the market of foreclosures.