Archive for May, 2010
Why Purchase Homes Foreclosed by Banks?
Mostly you can purchase homes foreclosed by banks through an auction or through a bank-appointed real estate broker or agent. Banks attempt to sell off homes they foreclosed on at auctions but most of these homes do not actually get sold there. When no buyer is successful enough to purchase homes foreclosed by banks in this manner, the home reverts to the bank to become a real estate owned property, which they will then try to sell in the open market through an appointed broker If you wish to purchase homes foreclosed by banks through an auction know that there are many processes you need to be aware of. Needless to say, you need to know where the property is located and when it will be auctioned off. The best way to do this is to check out local newspapers, especially the weekend editions. This information will likewise be available on the bank's website. It is always prudent to conduct an earnest research on the property and its title because they are sold in their current condition at all times. Purchase Homes Foreclosed By Banks in the Open Market If you do not feel comfortable joining an auction to purchase homes foreclosed by banks you can also find them on the open market through a broker or through a good online foreclosure listing provider. When repossessed homes fail to sell at auctions they officially become the property of the bank. Since banks are not really in the housing business, they will be very keen on selling their inventory of foreclosed homes. They would normally release a list of foreclosed properties to the market through a broker or in the Internet, but they would most likely be open to directly dealing with individuals or their agents. These homes are sold at marked down prices with additional discounts and incentives to make the package more attractive to buyers. These houses really come cheap because banks only aim to recover enough from the sale to cover the unpaid portion of the debt owed by the previous owner. There really are a lot of good reasons to purchase homes foreclosed by banks but one needs to know the inner workings of this manner of investing to be successful in it. Joseph B. Smith has been educating buyers on the finer points of purchase homes foreclosed at ForeclosureDeals.com for over ten years. Contact Joseph B. Smith through ForeclosureDeals.com if you need help finding information about purchase homes foreclosed.
Is Mortgage Mediation the Answer?
Obviously, given the sheer number of troubled borrowers (approximately 6 million currently delinquent nationwide) there are ample opportunities for mistakes to be made.
Losing Your Home to Foreclosure – Is a Short Sale the Best Way to Go?
With the millions of Americans behind on their mortgage or are about to lose their home to foreclosure provides a great opportunity to look at some potential options for those folks in trouble with their homes. One of the most popular ways to go is what we call a "Short Sale." Essentially, this is a way that someone that can't make their mortgage payments AND the amount they could sell the house for is less than they owe on their mortgage(s). The short sale is not a new way to get rid of a house it is just become prevalent in today's world thanks to the millions of potential foreclosures that are out there. For example, let's say the Jones family has a house that they bought for $250,000 three years ago and put 5% down ($12,500) so they had a mortgage balance of $237,500 and over 3 years they paid it down to $228,199. Mr. Jones loses his job and they don't have enough savings to continue to make their house payment, in fact they are 2 months behind so they actually owe closer to $230,500 with interest and penalties. They would like to sell the house, but the market for their home could only get them about $225,000. This is what they call being "underwater on your mortgage." A majority of successful home sales are done with a Real Estate Agent, so if we factor in that we'd need to add at least 6% ($13,500 6% of $225,000) to the equation. So if the house sold for $225,000, we owe $230,500 and need another $13,500 to facilitate the sale. That means the Jones' family would need at least $19,000 (Owe $230,500 + $13,500 to sell = $244,000 minus $225,000 sale price = $19,000 difference) to facilitate the sale. Remember, they don't even have enough money to make their payments so how could they come up with $19,000? (To keep this simple we didn't include potential sales concessions, property taxes due, any repairs needed, etc. but all those costs would be added to the total the Jones family owes.) In order to sell the house the lender would have to agree to take $19,000 less than what is currently owed to them. Why would a lender want to do that? Well, when a house goes completely through the foreclosure process the costs could be much higher. The lender would have to pay the legal costs, it takes longer so they miss more payments (no interest payments), a lot of the time the house is left in poor condition so they either have to spend money to fix it or accept a lower price for its condition, and they have to pay a Real Estate Agent to sell the house and any other sales concessions. The bottom line is that the foreclosure process could cost the lender thousands and thousands more than to cut their losses and do a short sale. It makes sense to cut one's losses, yet the lenders still make this process extremely difficult and their delays can make it even tougher to get a buyer to stick thru the home buying process. Sounds like a great deal for the Jones family, they get rid of their house and don't have a foreclosure on their credit, right? It's not quite that simple. First of all, contrary to popular belief, a short sale has a very similar impact on your credit and your ability to buy a home in the future. Future lenders will look at it much like they would a foreclosure. The credit score will suffer a significant drop, just like a foreclosure, maybe not quite as much but it will be very close. It will take a few years before you'd be able to get financing again and I would look for that time frame to be longer as this current crisis plays itself out. You will likely have to wait 3 to 4 years or more even with a short sale before you can qualify to get a new home loan AND your credit score will have to have come back up significantly, which doesn't just happen. Cleaning up your credit will take work on your part too. Another issue is the amount that the lender "wrote off" on what you owed them. The $19,000 in our example could be held as a "deficiency balance" that you would likely have to pay or some lenders would require the Jones family to sign a promissory note to repay that money (which can be a legally enforceable debt that could have a monthly payment attached to it). If the lender agreed to "forgive" the "deficiency balance" then they could issue you a 1099 form which would mean you would have to pay taxes on that money like it was income. The point here is there are many variables that must be fully understood before attempting a short sale so trying to do this on your own, or with the help of just a Real Estate Agent is probably not a good idea. You need to also involve a financial pro that understands all the possibilities and probably even look for a real estate attorney that can help to make sure you are fully protected from the lender coming back at you. I would also strongly recommend a conversation with a Bankruptcy Attorney to make sure you understand all your options. All in all "Short Sales" can be a viable way to get out from under a house you can no longer afford, but it isn't a quick and simple process. In fact it is such a complex process that trusting just one individual to guide you thru it is not a financially intelligent thing to do. Real Estate Agents are not necessarily financial experts or legal experts, financial people are not attorneys may not understand mortgages and how they work so you'll need to find one that understands this unique discipline and attorneys are not financial pros nor are they necessarily well versed in selling homes. Kurt Jackson, Financial Pro 4 the Average Joe is a credit expert and is well versed in the potential financial aspects of the short sale and other ways to minimize the damage that someone with mortgage and housing issues will be facing. If you or anyone you know is facing issues with paying for their home have them call me at 816.582.5532 for a Free Consultation to assess the situation. Kurt Jackson, Financial Pro 4 the Average Joe combines years in the mortgage and financial services to offer a unique way to help Average Americans have someone working for YOU in advising YOU to do what is best for YOUR interests. Check us out on line at http://www.FinancialPro4theAverageJoe.com. Article Source: http://EzineArticles.com/?expert=Kurt_Jackson
Are Home Builders on a Cliff?
The New Home Sales report today was nothing short of exceptional. The number beat all expectations and beat them by a lot. So are the builders back? Not so fast.
Something You May Not Know About Loan Modifications Under HAMP
Recently, we have seen a dramatic increase by almost 30% in the number of homeowners' mortgages that have been permanently modified. Almost 25% of the 1.2 million trial modifications that began over a year ago under the Treasury's Home Affordable Modification Program (also known as HAMP) have now been permanently modified. A problem many of these homeowners have been facing is the inability of the Loan Servicer to verify homeowners' incomes. This is something many people do not understand about the loan modification process. You must have some sort of income before you qualify for a loan modification. Being unemployed with no source of steady income does not automatically qualify you for a modification and in most instances, makes it even harder for you to be able to gain the approval you need to modify your existing mortgage payment. To combat this problem, beginning later this year on June 1, the HAMP program will now require that ALL modifications be based on VERIFIED income statements. By doing so, the Treasury is effectively guaranteeing that less modifications will be cancelled once the application process has begun. What this means for homeowners is that they will need income, verified and evidenced before they will be able to qualify for a modification of any sort under the Home Affordable Modification Program. The economy being what it is, it may not be possible for a homeowner to maintain a steady income and when faced with such a situation, will need to seek out other methods of alleviating the burden of a cumbersome mortgage payment. This is when short sales and Deed in lieu of foreclosure options present themselves the next likely means for a homeowner in this situation to explore. Mitra Karimi, President Crestico Realty http://www.crestico.com Article Source: http://EzineArticles.com/?expert=Mitra_Karimi-Paydar
Existing Homes Sales are Up-But Realtors are Still Down
Today's existing home sales report should have had analysts, experts, economists, and Realtors dancing in the streets.
Home Buyer Tax Credit Snafu: No USDA Loans
In 2006, the USDA program backed about 31,000 loans or $3 billion worth. In 2009, that had grown to 133,000 loans worth $16.2 billion. The good news is the standards are tight and the default rates far better than the FHA. The bad news is the program wasn't meant to handle that many loans, and it ran out of money.
Which Distressed Home For Sale is For You?
In the world of foreclosure investing, you have to realize as early as possible that success lies with your property choice. Remember that there are actually different kinds of distressed homes for sale and you should be aware of the advantages and disadvantages of each type. Basically, there are: Pre Foreclosures - these distressed properties are the hardest to find but the easiest to buy. Advantages of choosing these homes include faster transaction since you will be dealing with the seller directly; home is in a much better shape since the owner is still living there, easier to negotiate since the owner is under time pressure to avoid foreclosure and cheaper since there are no foreclosure cost that will weigh you down. The only downside is that you might get too excited and neglect to check the property's condition as well as the title. You can expect the owner not to disclose everything so it would be up to you to discover hidden problems with the property by hiring a professional home inspector. Short Sale - owners who are exploring a short sale is also a pleasure to talk to since they are also desperate to stop foreclosure and save their credit. In a short sale, you can make an offer that is close to what the property is currently worth in the market. The key, obviously, is to find homes whose values have declined considerably. Unfortunately, your offer should be accepted by the lender or else, the short sale cannot proceed. Foreclosures at Auctions - looking for distressed homes for sale will be easiest if you attend foreclosure sales. All you need to do is place a bid and you can go home with one of these foreclosed properties. Of course, you have to consider that there are certain requirements that you need to fulfill if you want to participate. Some auctions require you to pay cash so you should be ready to do so. REOs - distressed houses that survived foreclosure auctions are reverted to their lenders. As their inventory grows, banks offer more discounts and incentives. For them, selling these properties at half their market values is better than keeping them. So as a last resort, you can find distressed homes for sale this way. You can also be sure that all secondary liens will be cleared from the property. Actually, it does not matter which repo property you choose since any one of these homes can offer savings and instant equity. But with the millions of distressed homes for sale in the market today, finding one that will be able to meet all your preferences as well as budget will be a daunting task. Experts recommend that you use foreclosure listings. These listings are actually search tools that will make everything convenient for you. You can search home by location or list price. Also, some providers even offer tips and helpful information as part of their service. You can subscribe to an online listing and there will be no need for you to leave your home. All you need to do is to point and click. Joseph B. Smith has been educating buyers on the finer points of Distressed Homes for Sale at DistressedPropertiesSale.com for over five years. Contact Joseph B. Smith through DistressedPropertiesSale.com if you need help finding information about Distressed Homes for Sale. Article Source: http://EzineArticles.com/?expert=Joseph_B._Smith
Bye Bye Bob Toll
Toll Brothers CEO Bob Toll was the first home builder I ever interviewed, and he was tough on me. I'll never forget standing at a J.P. Morgan housing conference in New York City, asking Mr. Toll if he thought there were any red flags in the housing market, given how fast and how high prices were rising.
How to Break Into the Real Estate Market Through a Bank Foreclosure List
Bank foreclosures are known in the real estate market as the safest foreclosed properties to buy. This is due to the clean, good titles that they usually come with. Essentially, when a bank forecloses on a property, it erases all liens and outstanding debts owed by the property. When you buy a bank owned house and the bank subsequently turns over the property to you, it also turns over a clean title that has no outstanding obligation or judgment to it. This is very important especially if you have not intended, in the first place, to pay for any debts or unpaid mortgage on the property. If you want to take advantage of the low rates that bank foreclosures are usually priced at, you should have access to a bank foreclosure list. This list contains all foreclosures being offered by the bank. Typically, when bank repossession is complete, the bank forwards the property details to a multiple listings service (MLS) provider or to other listings brokers. The goal is to provide the maximum possible exposure for the property to easily fetch offers and bids. Set Your Purchase Objectives Early Finding the right property is only part of the task that you need to accomplish in foreclosure investing. In fact, before you shop for a home or a foreclosed property, it is necessary that you should first set your purchase goals. Determine whether you are purchasing a property for your own use or you are planning to turn it into an investment property. Either way, these goals will help you maintain your focus and avoid hasty decisions that can cost you thousands of dollars in the end. In addition, having purchase goals should enable you to save valuable time as it narrows down your search within those properties in a bank foreclosure list that meet your buying criteria. And a few minutes of extra time can be critical especially if you are dealing with a highly desirable and much coveted property. Purchase objectives will ensure that you are on the right track and will help eliminate any confusion and misguided judgment. Analyze Your Finances Buying a house is always a huge decision. Once the transaction is complete and a contract is perfected between you and the seller, there is no longer room for backing out. It will do you no good to plunge into the foreclosures market without knowing how you stand financially. Analyzing your finances before you look at a bank foreclosure list is extremely important since lenders would necessarily want to know how you are going to finance your purchase. When dealing with banks especially, you will be required to submit documents that show your financial capability. Banks tend to regard offers judiciously to see if the bid is reasonable and can be carried out by the prospective buyer. It is important for you to take note that preparing your finances also means that you should strive to maintain a sturdy credit rating. Large purchases that amount to a huge collective sum prior to buying a house or property can largely affect your credit score and in some cases, pull your ratings down. You do not want to spend a considerable time on research and efforts only to find out that you do not qualify for a loan. Joseph B. Smith has been educating buyers on the finer points of Bank Foreclosure List at BankForeclosuresSale.com for over ten years. Contact Joseph B. Smith through BankForeclosuresSale.com if you need help finding information about Bank Foreclosure List. Article Source: http://EzineArticles.com/?expert=Joseph_B._Smith
