Posts Tagged ‘Facing Foreclosure’
5 Foreclosure Myths – BUSTED!
Four years into the housing crisis, myths about foreclosure still litter the minds of even the smartest of real estate consumers. When it comes to matters as high stakes as your home, confusion can cost you thousands - or even your home. Whether you’re a buyer looking at foreclosures, a homeowner struggling to keep your home or a seller concerned making sure your home can compete with the foreclosed homes on your block, these foreclosure myths are prime for the busting, with no further ado. Myth #1: Foreclosure happens fast. With unemployment and underemployment still affecting nearly 1 in every 4 Americans, no one is immune from fears that a pink slip might quickly turn into a foreclosure notice. According to NeighborWorks America, nearly 60 percent of families seeking foreclosure counseling cited a lost job or cut wages as the reason they were facing foreclosure. While the Obama Administration's Home Affordable Programs haven't been nearly as effective as predicted in actually preventing foreclosures, they have had the effect of extending the foreclosure process for many families. Even though the legal process of foreclosure can happen in as few as 6 months in most states, it is currently taking much longer for the average foreclosure to get to completion. Recently, JP Morgan Chase revealed that their average borrower who loses a home to foreclosure has not made any payments in 14 months nationwide; 22 months in FLorida and 26 months in New York. To be sure, some see this as a good, others view it as unnecessarily dragging out the overall market's recovery. Many insiders will point out that these delays in foreclosure may be calculated to save the banks the costs of owning and maintaining foreclosed homes, not to help homeowners. In any event, the fact that foreclosure does not happen nearly as fast, in many cases, as expected does give families who are temporarily down on their luck some extra time to try to get back on their feet and save their homes. Myth #2: Buyers can’t get clear title or title insurance on foreclosed homes. When the foreclosure robo-signing scandal first hit, there was widespread concern that buyers would not be able to get clear title on foreclosed homes, because the former foreclosed owners might be able to come get their homes back when the improprieties in the bank's foreclosure documentation processes came fully to light. At the same time, several of the country's largest title insurance companies publicly balked at issuing policies on bank-owned homes until the issue was resolved. At this point, the banks claim they have revamped their processes, and all banks have stated that they have found not a single borrower whose home was repossessed without them having missed the requisite number of mortgage payments. Nevertheless, a number of governmental investigations are still in progress. The fact is, buyers of bank-owned properties in nearly every jurisdiction are protected from later title attacks by foreclosed homeowners by the bona fide purchaser rule, under which courts would prefer to simply award cash damages to be paid by the culpable bank to a wrongfully foreclosed-on homeowner, rather than reversing the sale or ownership to the new, innocent buyer. Additionally, the title insurers have now changed their tune and restarted issuing insurance policies on bank-owned homes which protect buyers' interests, after working with the banks for them to take responsibility in the event a former homeowner prevails in a wrongful foreclosure suit. While there are still many intricacies of title to be resolved for foreclosure buyers who purchase homes at trustee sales and auctions, or for cash buyers who often went without title insurance in the past, on the average, Trulia-listed, bank-owned property purchased with an average mortgage and title insurance, the chances a buyer's title will later be successfully challenged by the foreclosed homeowner on the basis of robo-signing? Exceedingly slim. Myth #3: Buyers should wait for the shadow inventory to be released. Many a buyer, discouraged with the homes they see on the the form in their price range, has decided to sit still and wait for the banks to release for sale what is called their "shadow inventory" - rumored to be anywhere from 4 to nearly 6 million homes that have already been foreclosed, but not listed for sale, or will be foreclosed in the near future. The fact is, to the extent that the banks have acknowledged the existence of a pool of homes they own but are not selling, they have expressed that their reasoning for holding the homes off the market is to avoid flooding the market and driving home values down any further. For that reason, buyers should not expect to see a massive influx of these shadow homes onto the market anytime soon - if ever. The banks' current modus operandi is that as they sell a home, the replace it with another home in that market - if they sell 50 homes in a town that month, they'll put another 50 on the next. So, don't hold your breath waiting for a fabulous new flood of homes. Instead, set up a Trulia alert to notify you when homes that fit your search criteria come on the market, and be ready to call your agent and go visit any and every one that looks like it might be a good fit. Myth #4: If you’re looking for a deal, you’re looking for a foreclosure. Despite what they may say, no buyer’s heart's fondest desire is to buy a foreclosure. But almost every buyer dreams of buying a great home - and getting a great deal on it. Many people think that to get a great value on their home on today's market, it means they must buy a foreclosure. As a result, the value and other advantages of buying an individually-owned home on today's market are frequently overlooked. Individual sellers with homes on the market right now are generally quite motivated, and understand that their homes are competing with discounted short sales and foreclosed homes. Many of these sellers are slashing prices in an effort to get them sold - the most recent Trulia Price Reduction Report revealed that 27 percent of homes on the market across the country have had at least one price reduction. Now that's what I call a sale! Further, individual owners are often much more negotiable on a wide range of contract terms than a bank which owns a foreclosed home. You can work with non-bank owners on things like repairs, closing dates, choice of escrow provider, closing costs and even included personal property much more flexibly than you can when the bank is on the other side of the bargaining table. On top of that, many individually-owned homes are in pristine, move-in condition; that is much rarer with foreclosures. So, don't underestimate the value of the deal you might be able to get on a non-foreclosed home. Just get clear on what you can afford and look at all the homes that are available in that price range, without discriminating against non-foreclosures. Myth #5: Having a foreclosure on your credit history means it'll take years and years before you can buy again. One of the most Frequently Asked Questions in the Trulia Voices Community by homeowners who are facing or have just lost a home through foreclosure is how long it will take before they'll be able to buy again. Until recently, the standard wisdom was that 5 years, minimum, would have to have elapsed between the foreclosure and the new home purchase. Now, though, borrowers can obtain an FHA loan with the low, 3.5 minimum down payment requirement as soon as 3 years following a foreclosure. To do so, though, all your other ducks must be in a row. Post-foreclosure buyers need a credit score of 620-640 to qualify for an FHA loan; higher for a non-FHA loan - given that the foreclosure itself usually dings anywhere from 100-150 points off the credit score (not necessarily counting a full year or more of pre-foreclosure missed payments), former homeowners who want to buy again need to ensure they have no other late payments or credit dings after they lose thier home. You must have clean credit with no derogatory marks like late credit card payments following the foreclosure, and you may also be required to document 12 to 24 months straight of on-time rent payments after the foreclosure. Further, the bank may impose a lower debt-to-income ratio on post-foreclosure borrowers than on borrowers who have not had a foreclosure, in an effort to keep your mortgage payments low, keep you from overextending yourself and boost the chances you'll be a successful homeowner over the long-term this time around. The bank will also need to see 2 years of continuous employment history in the same field, and documentation that you meet other loan qualification requirements.
Pros & Cons of the Foreclosure Freeze
Many states in America were struck when orders of foreclosure freeze were released. On Friday, Bank of America announced to the world about their plans of halting all foreclosure sales nationwide. This, according to many news websites is the aftermath of revelations by so-called "robo-signers.'' Many popular lending companies like JPMorgan Chase, PNC and GMAC have also suspended their foreclosure operations as well as Fannie Mae foreclosure sales. Together, these lenders own more than 3,000 properties for sale in Florida alone. So what will happen with this foreclosure freeze? Halting the foreclosure sales means the bank will continue to bear the costs of maintaining properties it has reclaimed, and won't be able to cash in on bank-owned sales, which move relatively quickly and often above asking prices. The already hurting housing market will most likely see a record setting low fourth quarter for sales since foreclosure sales make up more than 25% of the homes sold in Florida. When you look at it closely, the freeze could actually benefit both homeowners and the housing market. Homeowners facing foreclosure will have extra time to stay in their home while the effects of robo-signing are figured out and fixed. Prices might stabilize because so many homes are penned up. People trying to buy these foreclosed homes will have to wait out the freeze or find another home if they are in a rush to move in. Click here for a free Central Florida Real Estate Market report.
Tips to help owners spot foreclosure scams
Last year, the U.S. Federal Trade Commission identified 71 companies running suspicious foreclosure rescue ads. This year, the Better Business Bureau named foreclosure rescue rip-offs among its top 10 scams. Here are just two common scams identified in the September “Foreclosure Resource Guide” now available at the National Association of Realtors® (NAR) Realtor Content Resource: • A representative of a so-called foreclosure rescue company promises to negotiate a deal with your lender, instructing you not to contact your lender, lawyer or credit counselor during the supposed negotiations. After you pay an up-front fee or a few months of mortgage payments, the scam artist disappears. • A scam artist promises to fend off foreclosure in exchange for an up-front fee. Instead of getting you legitimate relief, the fraudster pockets the fee and secretly files a bankruptcy case in your name. Also covered in the “Foreclosure Resource Guide” are free tips on what to do immediately if you’re facing foreclosure, five foreclosure pros you need on your team, what foreclosure counselors can and can’t do, and website resources for foreclosure help. NAR’s Realtor Content Resource is an exclusive member benefit that entitles Realtors to download free homeownership content from HouseLogic to your consumer website, blog, or e-newsletter. HouseLogic is NAR’s consumer website geared to helping homeowners make smart decisions to enhance, maintain and protect the value of their home.
Facing foreclosure? New Fannie Mae website helps consumers find options
Fannie Mae launched a new website to help consumers understand their options when facing foreclosure and the possible loss of their home. Called KnowYourOptions.com, it outlines the choices available to homeowners struggling to make mortgage payments, and provides guidance on how they can contact and work with their mortgage company to find a back-up plan. KnowYourOptions.com provides information in both English and Spanish. Features include: • Interactive Options Finder helps homeowners identify options. • Calculators help borrowers understand how many of the options would work in their situation, including calculations about refinance, repayment, forbearance, and modification. • Videos feature real homeowners discussing how they received help; others feature housing counselors giving advice. • Forms – including a financial checklist and contact log – to help borrowers prepare for a meeting with their mortgage company or housing counselor. • Information on refinancing, repayment plans, forbearance, modifications and Deed-for-Lease. • Out-of-the-box alternatives, including short sales and deeds-in-lieu for homeowners who recognize that they can no longer afford their mortgages, but want to avoid a foreclosure on their credit history More info: www.KnowYourOptions.com.
Homes lost to foreclosure up 6% from last year
The number of U.S. homes lost to foreclosure surged in July, another sign lenders are moving quicker to take back properties from homeowners behind in payments. Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009, foreclosure listing firm RealtyTrac Inc. said Thursday. Banks have stepped up repossessions this year to clear out the backlog of bad loans. July makes the eighth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. Meanwhile, homeowners who are falling behind on their payments are being allowed to stay in their homes longer because lenders are reluctant to add to the glut of foreclosed homes on the market. The number of properties receiving an initial default notice – the first step in the foreclosure process – rose 1 percent last month from June, but tumbled 28 percent versus July last year, RealtyTrac said. Initial defaults have fallen on an annual basis the past six months. The latest data reflect a foreclosure crisis that continues to drag on as many homeowners struggle to make their monthly payments amid high unemployment, slow job growth and an uneven rebound in home prices. Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures. Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can’t qualify or fall back into default. The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 percent, or about 530,000 homeowners, have fallen out of the administration’s main effort to assist those facing foreclosure. That program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners, or 30 percent of the 1.3 million who have enrolled since March 2009. Still, RealtyTrac estimates more than 1 million American households are likely to lose their homes to foreclosure this year. In all, 325,229 properties received a foreclosure-related warning in July, up 4 percent from June, but down 10 percent from the same month last year, RealtyTrac said. That translates to one in 397 U.S. homes. The firm tracks notices for defaults, scheduled home auctions and home repossessions - warnings that can lead up to a home eventually being lost to foreclosure. Among states, Nevada posted the highest foreclosure rate in July, with one in every 82 households receiving a foreclosure notice. The number of properties in Nevada receiving a foreclosure warning last month rose nearly 7 percent from June, but fell nearly 30 percent from the same month last year. Rounding out the top 10 states with the highest foreclosure rate last month were: Arizona, Florida, California, Idaho, Michigan, Utah, Illinois, Georgia and Maryland. Las Vegas continued to be the city with the highest foreclosure rate in the U.S., with one in every 71 homes receiving a foreclosure notice in July – more than five times the national average. Copyright © 2010 The Associated Press, Alex Veiga, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Related Topics: Foreclosures
Evaluating Your Foreclosure Defense Options
In the wake of the greatest financial crisis since the Great Depression, many people have found it difficult to keep up with their mortgage payments. Factors like high unemployment have caused financial distress for many households. When a borrower is unable to make mortgage payments on time, banks and other lenders can take legal action to repossess and auction off that person's home in a process known as foreclosure. If you are struggling with heavy debt or facing foreclosure, you are not alone. Many people do not realize that, with the help of an experienced foreclosure defense attorney, they can put an end to the foreclosure process. Attorneys can help their clients evaluate their situations and avoid the fate that has disrupted the lives and taken the homes of millions of people. It is an unfortunate truth that many homeowners every year could have protected their homes from an impending foreclosure. Had they explored their legal options fully, many homeowners could have protected their livelihoods from foreclosure. An experienced foreclosure defense attorney has a deep and detailed knowledge of the foreclosure process and what can be done to bring it to a halt. By evaluating your situation thoroughly and giving weight to all of your options, you and your attorney may be able to put a stop to the foreclosure and reorganize your debt. Negotiating with mortgage lenders can help you find a new repayment arrangement. You can work to reduce, eliminate, or consolidate your debts and finally return to a normal life. Living under the threat of foreclosure is a profoundly stressful and emotionally difficult time. If you are struggling to protect your home from the hands of mortgage lenders, an foreclosure defense attorney can help you make the right decisions and may be able to help you safeguard your home from repossession. For more information, visit the website of the Boston foreclosure defense attorneys of Spirn & Associates today. Article Source: http://EzineArticles.com/?expert=David_S_Caldwell
When to Hire an Attorney to Fight Your Foreclosure
Both the economy in general and housing market in particular have experienced major upheavals. This combined with a several additional negative economic factors has resulted in a record number of foreclosures throughout the United States, causing untold devastation for American families. Innumerable homeowners and renters facing foreclosure have no idea where to turn to for help. Despite all the lawyer jokes, an attorney can actually be your best asset in the fight against foreclosure. Renters Can Be Foreclosure Victims Too Homeowners far outnumber renders in terms of the percentage of people affected by foreclosures. However, renters can certainly be foreclosure victims as well - and in no small measure - if their landlords lose their homes or apartments to the foreclosure process. Being a renter in a property pending foreclosure can be extremely confusing, so contacting an attorney early on would be prudent - unless you are already prepared to leave anyway. You will want an attorney who specializes in real estate and foreclosures. What is the Foreclosure Process for Renters Renters must be provided advance notice of the foreclosure and impending eviction well ahead of the day they are required to move out. This is mandated by law in most U.S. states. Even if you have a new landlord, that person still must give you at least several weeks notice if they need to evict you. Depending on the laws in your geography, they may even be required to honor your lease to its expiration. This would allow you to remain in your house or apartment until your lease is up, buying you much more time to locate an alternative living arrangement. The Foreclosure Process for Homeowners Homeowners should still consider seeking the assistance of a qualified attorney to help push back on the foreclosure. A real estate attorney - primarily one specializing in foreclosures - will certainly know the ins and outs of the foreclosure process, helping you take advantage of legitimate loopholes and small windows of opportunities available to you. Why Hire an Attorney Attorneys are familiar with foreclosure procedures and possible means of stopping one. They can provide you expert advice on prudent actions to take and can also assist in dealing directly with your lender, thus preventing you from making costly mistakes that would normally decrease your chances of holding onto your home. The foreclosure process is a grim reality, but you almost certainly do not know the specifics of all the laws and procedures involved. This is why tapping into the expertise of a real estate attorney can be your best opportunity to fight foreclosure.
The Importance of Using a Short Sale Expert
In many cities there are hundreds, maybe thousands, of homeowners who unnecessarily lose their homes to foreclosure each year who could have avoided it if their Realtor would have successfully procured a short sale. Even a highly trained short sale expert cannot stop a bank from defeating itself and not every short payoff negotiation will get to closing. But it is the Realtor's responsibility to diligently and methodically go through the dozens of extra steps that don't exist in a traditional listing. With the introduction of HAFA short sales the homeowner has the opportunity of receiving great incentives for successfully completing the transaction, namely mandatory debt forgiveness and a $3,000 cash payment from the lender. Realtors who fail to procure the discounted sale can cause their clients to lose these monetary incentives. Realtors who are not thoroughly trained and don't have the time, staff or resources to handle short payoff negotiations should simply not take on this complex negotiation. The clients come first and it is imperative that they get the best chance of avoiding foreclosure. If a traditional sale doesn't sell in a timely manner the seller will endure some sort of inconvenience. However, if a client is facing foreclosure and the sale doesn't happen on time or doesn't take place at all, the seller can suffer irreversible damage. Often Realtors feel obligated to take a short sale listing because of their friendship or prior relationship with the seller. Other professionals such as doctors and lawyers refer clients to specialists. Contractors bring in specialized subcontractors. Likewise, Realtors should refer their short sales to Realtors who are experts in this highly specialized field. This way their clients receive the best care and the referring Realtor still gets some compensation. The referring Realtor is still the hero because he or she was resourceful enough to bring in the expert.
