Stop Foreclosure Guide

Foreclosure news continues to dominate national headlines as the unemployement rate keeps climbing.  The first quarter of 2009 reported that nearly 6% of borrowers are already behind on their mortgage payments or are in the brink of foreclosure.  This number has doubled as compared to just a year ago.  The MBA (Mortgage Bankers Association) has stated that it sees this news as very “troubling”.

In the month of April, there were more than 342,000 foreclosed properties in the US.  Of these, 96,500 of them were in California alone.  This data is according to a web-based company, RealtyTrac.  Senior citizens are also greatly affected with a reported more than 600,000 of them are delinquent on mortgage payments or have already foreclosed properties.  According to the AARP, when you look at subprime loans, senior citizens are 17 times more likely to lose their homes to foreclosure than those with prime rate loans of the same age.

Subprime loans contribute a big factor in the number of foreclosures in a community.  A study showed that in areas where subprime loans are prevalent, the number of foreclosure filings is also high.  In states where there is a predominance of foreclosure news, subprime mortgages consist of as much as 50 percent of the cases.

Researchers tried to study other factors which could affect the number of foreclosures in an area.  They considered home value, race and income but arrived at a conclusion that subprime lending is the major factor for foreclosures.  Unemployment also added to the increase of foreclosure rates.  People don’t have enough income to keep up with their mortgage.  That’s why MS Foreclosures and other areas as well are skyrocketing.  This fact has lead agencies such as the Federal Reserve Bank of Boston to take up the cause of unemployed homeowners and recommend for more lenient policies in their behalf.

Many more Americans are still at risk of having their properties foreclosed. (Note: When doing your research online make sure to search for ‘forecloser‘ as well as it is a very common miss-spelling.)  The government is trying to assist with various policies and legislation, but it is unclear on what impact it will have.  The biggest drawback of such policy changes, is that they take many months to be approved and applied.  Until these plans have proven to be effective, we may have to brace ourselves for more foreclosure news to come in the future.

In 2006, the housing boom in the US began to cool down and increasing foreclosure news has dominated the media ever since.  Many of today’s homeowner’s (maybe as much as 10% of them) simply cannot keep up with their payments.

Many of the foreclosed homes are tied to neighborhoods where subprime martgages were widespread.  MS Foreclosures are just one example. Unfortunately this has led to a decrease in home values as well which just adds fuel to the fire.  Additionally, state and most local governments were forced to cut back on their spending because the drop in the value of these properties sharply decreased their tax bases.

There were signs of this coming however, three of them in fact.  The first sign was the massive bailout of home owners that came.  The secondary sign involved previous borrowers with expired introductory interest rates resulting to keeping up with a higher rate and the third one, which is currently beginning to build up, are the people holding prime mortgages and who have lost their jobs due to the economic meltdown and are now unable to pay on their mortgages.  Most of them even have good credit ratings.  It is expected that unemployment would contribute to almost 60 percent of mortgage defaults.  Basically, more foreclosure news is expected to arrive this year.

According to an analysis made by New York Times in February 2009 (data provided by First American Core Logic), the number of prime mortgages that have delinquent payments exceeded 1.5 million with loans totaling to $224 billion.  In that same month, the delinquencies on the even worse off subprime mortgages were as high as 1.65 million.  Shockingly over $717 billion in bad loans were on the books for February – up over 60 percent from the same time period a year ago.  These foreclosures spelled catastrophe for Wall Street due to the mortgage bonds that they are securitizing.  These also lead to bank loses of hundreds of billions. (Note: Search on ‘forecloser‘ as well because it is a very common miss-spelling of foreclosure and is prevalent in the foreclosure news posts.)

The new Obama administration has announced a plan to try and help as many as four million homeowners via a $75 billion dollar spending bill.  The effects of this plan are expected to be felt in the next coming months.  Until then, we should brace ourselves for more foreclosure news that is looming in the neighborhood.

Repossession of your House - one of the most traumatic events in any person’s life.

In the current economic climate it is distinctly possible that even somebody who is very careful with money can fall on hard times.

The bond repayment that was well within your reach when you bought the house has now become a commitment that you cannot manage - because of rising interest rates, and the price of fuel, food and other essential items.

Irrespective of the reason why you have stopped paying your mortgage - redundancy, death of the breadwinner, divorce, failed business venture, inability to refinance and many more - the bank will take action as soon as mortgage payments are not kept up to date, and will repossess your house if they feel you are unable to meet your monthly repayments presently or in the future.

What a wonderful relief it would be if you could go to bed again at night and fall asleep without this sword hanging over your head.

The good news is that we can prevent the repossession of your house, if you are willing to work with us.

There are, however, a few things that you must understand beforehand:

The biggest mistake that property owners make who cannot meet their bond payments, is not to contact the bank in good time before the trouble begins, but wait until the bank contacts them first to ask for an explanation. Many property owners then ignore the bank’s calls and letters.

Now alarm bells will ring at the bank immediately! If you see that you will not be able to make any month’s payment, you must contact the bank, explain your situation, and make an appointment to see them. It is in the bank’s interest to find a solution to the problem.

There are various possible solutions - each person’s situation is unique:

The bank may give you a payment ‘holiday’ until your situation has improved - like 6 months of paying only half the monthly amount, or 3 months of making no payments, depending on your personal situation.

You could extent your mortgage payback period to 30 years, or apply for an interest only mortgage (SA Homeloans, for instance offers interest only mortgages). This will give you more money in your pocket, but you will be paying more interest. You could change the mortgage repayment again after reorganising your finances.

Your accountant or financial advisor could give you financial advice (NOT an insurance broker!). They have seen situations like this before and might give you feasible ideas that can be implemented.

The consequences of not keeping up with your mortgage payments:

The bank will repossess your property if you do not keep up with your monthly payments, and do not communicate with them to find a solution. If a solution cannot be found, the bank will take steps to have the property repossessed.

Some people give up and wait for the bank to do the repossession. They think that all their financial worries will be over after the bank has repossessed the house - but as soon as your house has been repossessed, all your creditors will be knocking on your door.

Someone who has gone through repossession might be financially ruined for a very long time, because he will not be able to get credit for a very long time.

When the house has been repossessed, the Sheriff will auction it. The bank will send an official to also bid at this auction. If the property is worth $1 000 000, for instance, and the outstanding bond is $500 000, the bank will bid at the auction up to a price of $500 000, and then leave the auction. If the bid is granted at $500 000, the bank will get their outstanding money back.

If you think you will get some money back after the auction, you may be in for a very nasty surprise. Many auctions do not go much higher than the reserve price that the bank has asked for. Now the owner has no house PLUS a bad credit record. He may not be able to get any credit for a very long time (talking in years!), and struggle to rebuild his life.

How we can help you

The best action to take to prevent repossession is to sell your property to a reputable property investor and settle all outstanding debts as soon as possible. The property owner might have some late payments listed on his credit file - but not a repossession that might take years to repair or clear. He can rebuild his life again by starting afresh, and may soon be able to buy a property again.

We are property investors who will valuate your property and give you an offer to purchase within days. We will even settle your outstanding payments with the bank before the transfer has taken place. So you will not have to worry about a creditor every time the phone rings; or that the Sheriff or Bailiff will come knocking on your house front door.

Thanks to the NCA (National Credit Act) there is another way to save your house from repossession and that is Debt Counselling.

You can apply for Debt Review at any time. As long as your income is lower than your expenses and you have a regular income every month. While you are in debt review or applying for debt review the bank may not repossess your property or any other asset in your name. You will have more time to reorganise your finances.

Our Criteria to help you:

We are not able to help everyone. There are certain criteria according to which we can help you:

We must be your last resort, and you must be willing to work with us to find an solution. First of all we must valuate your property to see if you have enough equity in it. Equity is the difference between the market value of your property and your outstanding bond. Should you meet the criteria, we will make you an offer up to 70% of the property market value.

We can also help with fast sales in cases where people are relocating abroad, or have been divorced or separated.

Applying for debt review is a simple process. You can send me an email to help you apply for debt counselling or you can contact me for more information on debt counselling.

Do not hesitate to contact Colin Brazendale at colin@prevent-repossession.co.za for help.

With lots of people unemployed right now, a lot of homeowners cannot keep paying their mortgage payments. Some of them have good rates but, without regular income, they still cannot keep up. Some homeowners have adjustable rate mortgages and find their home payments adjust to something they cannot afford. Many homeowners cannot afford to stay in their current homes so they should sell and move on. The problem is that, with falling home prices, they also find themselves having upside down mortgages. That means, they owe the banks more than their homes are worth. So, what can they do?

Should Homeowners Sell Their Homes?

The first option that comes to mind for many homeowners is to sell and move on. The problem is that, if they were to sell their homes, they will get less for them than what they owe the banks. So, selling might not be the right choice. But, it is always a good idea to consult a real estate professional to make absolutely sure that there is not a way to sell and walk away free and clear without having to come up with the rest of the money for the mortgage balance later on.

Is Refinancing an Option?

Usually when you owe more than your home is worth, banks are not going to lend. However, there could be options that allow you to refinance your home or modify your loan especially when the rates are very low right now. If your credit is good and you wonder if refinancing is right for you or have any home loan questions, call your lender as well as other banks for comparison. Sometimes, your own mortgage company cannot help you but other banks may be able to.

Debt Relief Act After Foreclosure

A lot of homeowners cannot sell their homes, cannot refinance and cannot modify their loans. Then their mortgage companies try to foreclose on them. Foreclosure severely hurt your credit so it is advisable to call your bank and try to negotiate with them before they foreclose. If they do go ahead with foreclosure, however, there is the new Mortgage Forgiveness Debt Relief Act of 2007 that will work on your side. This Act allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Think of investing in properties, the best option to go is for a Foreclosure property or home. Though there is certain amount of risk involved, the profit margins are very tempting.

If you are going for a foreclosure property then you need to know which all properties are available for it. There are sources like the real estate agents, court houses, tax offices and also the financial institutions which will provide you that list and that to free of cost. You can also search for its information on the magazines and newspapers. If you are opting for a property whose location is best then when the economy will raise the price of the property will also rise and your profit margin will be high.

Once you come to a decision of buying a particular property available for foreclosure and which suits your needs and funds and after that a detailed assessment is suggested because if there is any kind of problem then you can detect it before buying the property.

Make sure that there is no previous wreckage and all the utilities are also in a working condition. The process can also be carried out by hiring a professional who can charge for his services from $200 to $400.

It is also necessary to opt for title insurance. Title insurance gives you protection against any liens to the property. Protection is also provided in case you get sued by any previous owners.

Title insurance will also keep you away from the various harassment’s that may be involved in the deal or during the contract if you consult a lawyer.

Before making any such deal an awareness of the rules and regulations affixed to it is very important as they are different for different places. Like in some states of the United States it is a rule that the original owner has a time period of six months after the completion of the foreclosure to pay back loan and can claim the property.

Foreseeing the returns involved in such deals many people do not mind going through the time consuming and tedious process involved in buying the property. At a time of economic slow-down and recession it is a smart judgment to make such a deal.

There are simple techniques to help stop foreclosure on your home. Many more homes could be saved from foreclosure if people were educationed on what to do and then they did it. You can help stop foreclosure processes before they even get started.

Save Your Home With These Steps

1. Some lenders may want you to believe that in order to avoid foreclosure you must pay everything you owe in one fell swoop. In actuality, numerous possibilities allow individuals to avoid both losing their home and paying the full amount of their arrears at once. The more slowly people act on them, the fewer options they’ll find available to them other than foreclosure.

2. Make not missing a mortgage payment your top priority. Think about the following points:

• Missing the first payment makes it psychologically easier to miss subsequent payments.

• A home owner’s credit scores go down the minute he misses a mortgage payment. This could prevent him from obtaining or reduce the allowable amount of the loan he requires to save his home.

• It’s far more dangeous to your financial well-being to miss even one mortgage payment than it is to miss a credit card or utility bill payment. Help stop foreclosure by minimizing spending on the unnecessary.

3. NEVER ignore lenders’ phone calls and letters. Remember that banks don’t want your home, they want your payments. Although it can seem embarassing, your lender would much rather that you admit to a problem and work with them to help stop the foreclosure, rather than dodge them and hide your head in the sand.

4. Don’t miss Chapter 13 bankruptcy filing deadlines. Prompt filing can help stop foreclosure from materializing. Court-approved repayment plans that are followed as ordered will enable home owners to keep foreclosure from going through.

Your plan to avoid foreclosure should being with making mortgage payements on time. But once you become aware that there’s no way you’re going to be able to pay ontime, immediately contact your mortgage lenders to help stop foreclosure proceedings from starting up. Procrastination won’t help stop foreclosure, doing something will.

Editor’s note:  Due to popular demand, this article is now syndicated on hundreds of websites throughout the internet.  For more information, check out BulkREO.net

With more foreclosures now than ever before, America’s weak real estate market seems to set new dismal records each month. But challenge always gives rise to opportunity, and opportunistic real estate investors are rising to the challenge.

This new opportunity - known as ‘Bulk REO Investing‘ - is so huge it’s captured attention from wealthy investors and private investment funds alike.

The basis of the Bulk REO business is foreclosures, so let’s analyze the foreclosure process now.

Understanding the notion of Bulk REO’s requires understanding of the foreclosure process.

As a home owner misses a payment or two, the lender sends the predictable barage of threatening letters and warnings. The formal process of foreclosure begins at the lender’s discretion. The name for this period is ‘preforeclosure’.

Foreclosure is completed when the property is put up for auction. If there are no buyers for the property at auction, the property is returned to the lender. The property then receives the designation of being an ‘REO’ or the more formal name, ‘Real Estate Owned’.

Lenders have no interest in owning property, and thus usually opt to list their REO properties with a local real estate broker in hopes of a retail sale. Yet with increasing frequency, REO properties are being sold for pennies or dimes on the dollar. This happens because the buyer of the REO is required to purchase multiple REO’s in a single transaction.

These REO packages represent the potential to acquire huge amounts of equity for savvy real estate investors. The most successful Bulk REO Investors will have a well-respected source of funding for their transactions. Some sources of funding for these transactions are: personal funds, hard money lenders, commercial lenders and non-conventional sources such as private investors and hedge funds. One excellent source of funding for Bulk REO Investment transactions can be found here: Bulk REO Investment Training.

Many wealthy people have made their millions by investing in real estate. The old adage “buy low and sell high” is what a lot of real estate investors live by. I’ve heard a number of different real estate investors say that you make money in real estate not when you sell it, but when you buy it. This basically means that if you buy at a low enough price it’s nearly impossible not to make a good profit.

A great way for investors to put the buy low sell high method into practice is to invest in foreclosures. Foreclosures are at an all-time high and because of this there are opportunities everywhere for investors to find great houses at bargain prices.

A lot of real estate investors like to look at a bank foreclosure list and see what kind of inventory their local banks are trying to unload. When most people need to get a loan to buy a house they go to a bank so it makes sense that banks would have some people default on their loans and that the banks would then have a large inventory of houses that they want to sell. Banks do not want to be in the real estate business. They don’t want to get into flipping houses or owning rental properties. Banks want to have a portfolio of good loans, loans in which people make regular payments. Because banks want to have good loans on the books and because there are so many foreclosures now, banks are accepting short sales more than ever. This means that banks are prepared to accept offers for less than what is actually owed on the property.

Another way that investors like to find bargain properties is to look for government foreclosed homes. Banks are not the only institutions that make real estate loans. The Veterans Administration makes financing available to men and women who have served in the armed forces so that they can purchase homes, often with little down payment money and favorable interest rates. Like any other lender, the Veterans Administration does have people that default on their loans and they do sometimes have to take houses back in foreclosure.

The Veterans Administration is not the only government agency that ends up with foreclosures. A lot of investors like to buy HUD foreclosures. HUD stands for the Department of Housing and Urban Development. HUD does not actually loan people money but it is responsible for overseeing the activities of the FHA or Federal housing administration which provides insurance to approved mortgage lenders. If someone has a bank loan that is insured by the FHA and that person then defaults on their loan, and if the property were to go through the entire foreclosure process it would eventually go back to the Department of Housing and Urban Development which would then have the responsibility of selling that house to recoup losses.

HUD ends up with a lot of foreclosures because FHA insured loans are often times given to people with very little down payment money and a lot more flexibility when it comes to qualifying for a loan. The FHA makes buying a home easier for a lot of people but this also makes it easier for people to get in over their heads and lose their homes in foreclosure.

Times are tough for a lot of people and foreclosures are at an all-time high but if you are an investor now is the time to buy. There is more opportunity now than ever before to get quality properties at rock-bottom prices and real estate prices will not stay this low forever. This is one of the best times in history to buy low and sell high.

It is normal to find yourself at a loss if your property is in the process of being taken back by your bank or financer.   Keeping up the latest foreclosure news can really help you out.  And during these hard times, getting legal help is impossible.  It is still more effective to seek the help of a lawyer but the internet could be an alternative solution to your problem.

The best place to search for information about mortgages and home ownership is your state’s website.  You should go to this website first.  Search the website for articles about home foreclosures.  Information about how to proceed and legalities of foreclosure should be generated from the search.  Other information may be found on other websites, but it is important to be precise about the information so you have to go directly to the website of your state of residence.

You can also seek information from lawyers’ sites, those who are experts in foreclosures.  Websites such as these provide great advice for free.  There was a search done for real estate lawyers that gave some information about bankruptcy and foreclosure, that bankruptcy can put a halt to the seizure of your home.  Not all legal websites will give you all the information you need, but surely the internet will provide you with some, if not all of the answers you need.

You can also easily get a lawyer online.  Although money is a problem, there is always a solution.  (Note: When searching online for foreclosure news and information make sure to use commonly misspelled phrases like forecloser as well.)  There are lawyers who give services for free and there are those who accept staggered payments.  A lawyer is needed if you are being fooled or if your bank or financer is doing something illegal.  It is imperative to get an attorney’s help in these matters.

Another good source of information are debt counseling websites.  There is a risk, but they can be of assistance to you.  These companies may negotiate with your bank or financer.  They might be able to lower your monthly payments rather than foreclosing.  Be careful in availing of the services of these companies, though, as there is a number of companies out there that may fool you.  You have to check the internet if the company really is legitimate before you seek their help.

You can also find help at  www.hud.gov.  This is the website of the US Department of Housing and Urban development and you can find precise information here.  The website will be of great help.  The whole process of foreclosure will be given in detailed there and you can even talk  to a HUD professional directly.

Advice columns written by people who have gone through the foreclosure process can also be found online.  You can read about their ups and downs, successes or failures on some websites.  You can go to these websites for more information and also to find out that there is hope.  Getting information from people who have gone through what you are going through now can make you feel better for sure.  To keep up with the latest foreclosure news you must continue your online education and research.

A real estate auction works pretty much like any other type of auction. It does not matter if the property is owned by the seller, or a government auction of foreclosed property, auctions are an exceptional way for selling and buying property fast, with the prospect of receiving a great deal.

The government has these auctions both on-site and online, depending on the kind of property. Government auctions are stricter in regard to deposits and closing times, but the measures for registering and bidding on government property auctions are basically the same as for any other auction. You can find good deals at government auctions.

These auctions are run just like any other auction. The highest bidder wins. These auctions can be for a home on land, or an office building that was owned by a company that went out of business, or just for land. If you want to build a home, this is a good place to purchase a parcel of land in a good area for an affordable price.

Public auction is the type of auction that is most common, and bidders bring bid deposits. The auctioneer starts the auction and the bids continue until there are no more bids. The highest bidder wins the property.

Auction by Mail is where bid deposits are mailed to the appointed office and bidders are able to raise their bids by mail, e-mail, fax, on-line, or in person. The auction lasts a few days, and the high bidder is awarded the property when bidding stops.

On-line Auction is where the bidding is done online and the highest bidder at the end of the auction wins the property.