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Foreclosure trauma depends on where you live because of the differences in state laws and the backlog of the court systems. Here are two tips for navigating the dangerous waters of potential foreclosure.
Before borrowers take the following steps, it's best to call lenders prior to missing payments to try to get payments frozen, delayed, or suspended for as long as the negotiation process results will allow---enough time to avoid any actions after the fact. People who waited for the default notice (especially in states where no court actions are necessary), the clock has pretty much struck midnight! Rick Sharga, VP of marketing for foreclosure listings firm RealtyTrac said "that the very first two calls distressed borrowers should make are to the lender loss-mitigation department and not collections -- and secondly, to a local real-estate agent to assess for how much the house will sell and how long it would take". More tips can be found at http://www.hud.gov/foreclosure/.
The degree of foreclosure trauma depends on where you live due to differences in state laws and the backlog of the court systems. Having owned and sold properties in Texas, the state allowed lenders to auction properties just 21 days after the notice of public sale (http://www.foreclosures.com/www/pages/state_laws2.asp?state=tx. Homeowners in New Jersey or New York could have more than a year to raise money http://www.foreclosures.com/www/pages/state_laws2.asp?state=ny), refinance or sell their place, courtesy of slow court systems.
It only makes sense then, that the timing difference for distressed borrowers who need to escape the huge balloon payments, depend upon this timing. This timing is especially important to borrowers with large equities at stake in typically hot markets like California. New York gives borrowers plenty of time to sell because the court system is so slow . However, in Texas, it would take way too long to sell properties that have gone to public auction and where payments have been missed, because of the numbers of new listings without all of the legal and paperwork hassles of foreclosed properties. Borrowers in states like MN (http://www.foreclosures.com/www/pages/state_laws2.asp?state=mn), CO (http://www.foreclosures.com/www/pages/state_laws2.asp?)state=co, New Hamphsire (http://www.foreclosures.com/www/pages/state_laws2.asp?state=nh) and GA (http://www.foreclosures.com/www/pages/state_laws2.asp?state=ga) aren't so lucky. Unlike New York (, no court action is needed and the owner of the note is able to have families out of their homes within about 60 days following the default notice. In Florida, the court system is backlogged about two years; giving borrowers plenty of time to either sell their homes or find new financing.The long foreclosure timeline in some states means more red ink for lenders due to court costs and missed loan payments stacking up. With a bigger risk on the other end, the underwriting standards are usually more difficult. Getting loans would be much harder for buyers in these markets. Complicating matters are right-of-redemption clauses that allow homeowners in many states to buy the house back for the amount of the note plus interest which can be found together with the following summary of foreclosure rules for each state (http://www.tryforeclosures.com/z-article-state-foreclosure-laws.shtml).
In Minnesota or Alabama (http://www.foreclosures.com/www/pages/state_laws2.asp?state=al), the previous owner has up to a year to buy it back, causing headaches for new buyers or investors if they don't get the previous owner to waive this right.
A long foreclosure process is no guarantee that owners can sell and duck foreclosure. In these cases, the "timing" wouldn't necessarily work to the borrower's advantage.
In hot markets like California or Florida, where real-estate values increased at such a dramatic and rapid rate before cooling off, recent buyers are stuck with notes worth much more than the house. James Gaines, a Texas economist said, "They can't afford to pay a 6% real-estate commission and come out whole". Also, if the mortgage has been securitized or sold on the secondary market, finding someone with the authority to agree to a short sale could be difficult". California timelines and procedures can be found at http://dca.lacounty.gov/TSForeclosure.html. Another source for the most common California forcelosure laws can be found at http://www.foreclosures.com/www/pages/state_laws2.asp?state=ca.
Real estate advisors say many foreclosures can be avoided if people call their lender and try to work something out before missing a payment. Most lenders don't want to incur the hassles and costs associated with the foreclosure process. Therefore, many are waiting a bit longer than state timelines to give buyers a better shot at keeping their homes. Freezes or delays in the foreclosure process are better options for lenders if borrowers are taking verifiable actions to work out the debt..
If a default notice has been issued, remember the advice provided by Rick Sharga, VP of marketing for foreclosure listings firm RealtyTrac. "The first two calls distressed borrowers should make are to the lender loss-mitigation department- not collections and the second call should be made to a local real-estate agent to assess sale value of the homel and how long it would take".
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Our economy has not been on
Our economy has not been on its greatest shape that a lot are badly affected by the economic crisis. A lot are having problems with their mortgage and towering debts everywhere just to make ends meet. Foreclosures and layoffs made the situation worse. Following the tips so that you can avoid your house to be foreclosed and also ask professional help and debt counseling might be a good idea. If you have a high debt to income ratio, some debt counseling would do you well, as well as laying off the credit cards. If your debt problems stem from a mortgage or personal loans for housing, then loan modification through the federal program might be what you're looking for. If you qualify for the program, then it would be in your best interest to file sooner rather than later, so you could avoid foreclosure.
Foreclosure Property
Despite the cons listed here, the cost savings on a foreclosure home can be significant enough to warrant the extra time, effort and minute amount of red tape involved.
thux for the sharing..
Cons of Foreclosure Properties
Tips For Distressed Home Owners
Iwant to share a little story :
Have the payments on your adjustable-rate mortgage loan become unmanageable, or are they about to increase beyond your ability to afford them? Loan-workout experts offer the following tips to maximize your chances of getting significant relief:1. Act quickly. Don?t wait until your bank initiates the foreclosure process with a notice of trustee sale. Loan workouts can take months to complete, so it?s best to notify your lender before you miss the first payment. 2. Keep calling. If the bank tells you to call back after you miss a payment, don?t give up. Lenders do not have to wait until you miss a loan payment, but right now they are swamped with workout requests, so past-due borrowers are getting first priority. If the employee you speak to isn?t helpful, call back and you are likely to get someone else. Don?t give up. If you need to, hire an attorney to get better results. 3. Have your finances in order. The bank?s loan-servicing agent will ask you to provide information about your income and expenses such as credit- card, utility and car payments. You must prove financial hardship to get a loan workout. Be careful that you don?t provide information to your lender that will cause them to decline a loan modification and cause you even more hardship.4. Talk to a HUD-approved foreclosure-intervention specialist or an Attorney that specializes in real estate law. Their services are free, they understand how to work with lenders, and they won?t let emotions get in the way. Call the state?s Foreclosure Prevention Hotline at 877-448-1211. 5. Consult with the loan officer who originated your loan, if that person is still in the business. He or she might be able to provide some assistance in getting the loan adjusted.6. Ask an attorney to send a letter to the bank with your request for a loan workout. Some lenders pay more attention when the request is on a lawyer?s letterhead.The 7 loan ?workouts?Any adjustment to a loan?s original terms and conditions is known as a ?workout.? Here are the seven most-common types of mortgage- loan workouts, in order from most to least common:Repayment plan. The borrower is allowed to make up past-due payments over time by adding them on to future loan payments.Forbearance. The lender forgives past-due payments to bring the borrower current, thus extending the loan?s payoff schedule by the number of months in which payments were missed.Loan modification. The lender reduces a borrower?s monthly payment by adjusting the terms of the loan, such as by lowering the interest rate. Modifications usually are temporary and don?t involve reducing the loan?s principal, although there are some exceptions. A typical modification involves reducing the interest rate to 5 percent for five years. An attorney may be able to negotiate a principal balance reduction as well by showing the lender the property is upside down and the client may walk away.Short sale. The lender agrees to let the borrower sell the home for less than the remaining loan balance. Speak to an attorney about the potential for a deficiency judgment or tax implications. Short refinance. A special loan modification in which the lender agrees to refinance the loan at a lower rate and reduce the principal. The federal housing bill approved in July proposes short refinancing to a fixed-rate FHA loan at no more than 90 percent of the original loan?s value. You must be current to qualify for a short-refi and have good credit scores.Loan assumption. A new borrower assumes the original borrower?s mortgage debt in exchange for the property.Deed In Lieu. The borrower surrenders the mortgaged home to the lender in exchange for forgiveness of all mortgage debt.The Feldman Law Center is located in California and negotiates loan modifications and stops the foreclosure process in all 50 states. Visit them at www.feldmanlawcenter.com
Foreclosure Tips for Distressed Borrowers
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What To Do After You’re
What To Do After You’re Debt Free
Once you’ve focused and sacrificed and buckled down to pay off all your parasitic interest charging debts, what will you do? No point in going back to your old habits. Do something productive with all that extra cash!
Paying Yourself After You’re Debt Free – The 50/50 Plan
If you take 50% of your money that was previously allocated to paying off your debt and invest it and the other 50% of that money and spend it, you’ll be golden.
Not only will you have increased quality of life from being debt free but you’ll build a nest egg for the future. And, you can now afford to splurge a little bit so enjoy the newfound financial security. You’ve earned it!
If you’re not there yet, there are many resources to help you become debt-free once you put your mind to it.
Foreclosure Tips
Potential Drawbacks of Buying A Foreclosure Property
Perhaps you’ve heard about the potential benefits of buying a foreclosure property. A great deal can be the biggest pro possible resulting in thousands or even tens of thousands of dollars in cost savings. But are there cons to buying a foreclosure building? Sadly, yes.
Cons of Foreclosure Properties
1. Perhaps the unit isn’t yet vacant. If you’re watching a property that you know will be foreclosed, the part where people are being evicted can get a bit ugly and present delays.
2. The wait time and red tape. Foreclosures have processes that take time and it might be a while waiting for a property you have an eye on to become yours. There can be administrative processes that take time.
3. The condition of the property. Some foreclosure properties can be real fixer uppers because of neglect or financial hardship to the family that previously held the mortgage. It can be difficult to ascertain exactly what repairs might be needed until you actually buy the home unless it has been on the market vacant. Sometimes foreclosure properties sell quickly due to a great deal so there may not be a lot of time available to ascertain potential repair costs.
Despite the cons listed here, the cost savings on a foreclosure home can be significant enough to warrant the extra time, effort and minute amount of red tape involved.
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