Posts Tagged ‘Foreclosure Process’
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.
Three scenarios from the foreclosure freeze
Gregor Watson, a principal with McKinley Partners, a development company that buys foreclosed homes, explained to listeners on a Citi home-builder conference call that there are three potential outcomes for the foreclosure fiasco: • Best case: Paperwork problems end up being technical issues that can be resolved quickly. The foreclosure process continues and the glut of foreclosed homes clears from the market. • Medium case: Significant fallout litigation takes years to sort out, slowing the already troubled housing market even more. • Worst case: The market grinds to a halt and title insurers refuse to insure mortgages involving foreclosed homes. “It would be devastating for the resale market if this robo-signer issue spiraled out of control,” Watson says. Source: The Wall Street Journal, Dawn Wotapka
Sales of foreclosure properties on the rise
Foreclosures accelerated in the second quarter, driving down home prices and accounting for nearly half of all sales in several states. Nationally, homes sold at foreclosure accounted for 24 percent of all residential sales in the second quarter of 2010, RealtyTrac reports. The average price of properties sold while in some stage of foreclosure was more than 26 percent below the average for properties not in the foreclosure process. “It’s obvious foreclosures remain a major drag across the U.S.,” says Robert Dye, senior economist at PNC Financial Services Group. “Pioneering buyers with low mortgage rates will continue to take advantage of these properties. It’s going to take quite awhile to work through this inventory. It will take a few years, not months.” A total of 248,534 U.S. properties in some stage of foreclosure – default, scheduled for auction or bank-owned – were sold to third parties in the second quarter. That’s up almost 5 percent from the first quarter, but down 20 percent from second-quarter 2009. Some states were especially hard hit. Foreclosure sales accounted for nearly 56 percent of all sales in Nevada in the second quarter, the highest percentage of any state. Ranked second was Arizona, where foreclosure sales accounted for 47 percent of all sales. In California, 43 percent of sales were foreclosure properties. Other states where foreclosures were large shares of all sales were Rhode Island, 37 percent; Massachusetts, 35 percent; Florida, 34 percent; and Michigan, 33 percent. The uptick in foreclosures comes despite a federal effort to help homeowners struggling to retain their homes get modified mortgages with more affordable payments, as well as efforts by lenders to reduce payments for some borrowers. “It’s clear this will be with us for some time,” says Lawrence Yun, chief economist with the National Association of Realtors. Foreclosures used to be rising because so many borrowers had taken on mortgages they couldn’t afford, he says. “The further we go, more foreclosures will be related to the job market rather than people who overstretched,” Yun says. “There will be more traditional reasons for the foreclosures.” Foreclosure sales could pick up now that a federal tax credit for home buyers has expired, economists say. The credit gave borrowers the flexibility to bid on houses at higher prices. Without the credit, demand for lower-priced foreclosed homes could pick up. And that could pull down overall prices further. “Prices will fall and will put more people into negative equity, which causes more people to (go into) foreclosure,” says Mark Zandi at Moody’s Analytics.com. Copyright 2009 USA TODAY
U.S. homes lost to foreclosure up 25%
Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis. The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure-listing firm RealtyTrac Inc. said Thursday. In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said. August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May. Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can’t afford to simply dump the properties on the market. Concerns are growing that the housing market recovery could stumble amid stubbornly high unemployment, a sluggish economy and faltering consumer confidence. U.S. home sales have collapsed since federal homebuyer tax credits expired in April. That’s one reason less than one-third of homes repossessed by lenders are on the market, said Rick Sharga, a senior vice president at RealtyTrac. “These (properties) are going to come to market, but very slowly because nobody wants to overwhelm a soft buyer’s market with too much distressed inventory for fear of what it would do for house prices,” he said. As a result, lenders are putting off initiating the foreclosure process on homeowners who have missed payments, letting borrowers stay in their homes longer. The number of properties receiving an initial default notice – the first step in the foreclosure process – slipped 1 percent last month from July, but was down 30 percent versus August last year, RealtyTrac said. Initial defaults have fallen on an annual basis the past seven months. They peaked in April 2009. Still, the number of homes scheduled to be sold at auction for the first time increased 9 percent from July and rose 2 percent from August last year. If they don’t sell at auction, these homes typically end up going back to the lender. Lenders have repossessed more than 2.3 million homes since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year. In all, 338,836 properties received a foreclosure-related warning in August, up 4 percent from July, but down 5 percent from the same month last year, RealtyTrac said. That translates to one in 381 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 last month, with one in every 84 households receiving a foreclosure notice. That’s 4.5 times the national average. Rounding out the top 10 states with the highest foreclosure rate in August were: Florida, Arizona, California, Idaho, Utah, Georgia, Michigan, Illinois and Hawaii. Economic woes, such as unemployment or reduced income, are now the main catalysts for 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. Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out. The program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners since March 2009. Regardless, many troubled borrowers have seen their efforts to get a loan modification stymied. Larry Book of Winter Garden, Fla., was one packet away from a permanent loan modification from Chase under the Obama administration’s foreclosure prevention plan after more than a year of back and forth and one failed attempt. But his modification never went through. Instead, his loan was transferred from Chase to IBM Lender Business Process Servicers in July and he was told he owed $9,562.62 and must bring his mortgage current by Sept. 15 or foreclosure proceedings will begin. “It just becomes too exhausting,” Book said about the modification process. “That’s why some people walk away. But I’ve invested too much and given up too much to just let it go.” AP Logo Copyright © 2010 The Associated Press, Alex Veiga, AP real estate writer
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.
How to Fight the Foreclosure Process – Little Known Strategies to Stop Foreclosure!
There is a way to delay foreclosure process for years in a legal manner even without paying monthly mortgage, sounds bogus?!? But there is actually a way, and its more than one way only if the homeowners are well informed and know how to use the law for their own benefit. Here are just some tips out of a hundred ways that you can use to successfully prevent foreclosure against your creditor. First on the list is a well written Hardship Letter. A hardship Letter is a letter containing reasons why a person is in a current financial crisis and that hinders his/her ability to pay the monthly mortgage. Usually this letter is used to either apply for refinancing or mortgage modification. A well-thought Hardship Letter will do a lot in postponing the foreclosure process for some time after the summons have been served. Second on the list is a Homeowner Court Hearing. Every homeowner has a right to request for a court hearing in their local Circuit Court. When used properly, this approach can be very advantageous on the homeowner's part. Through this process, the court hearing can even last for a year delaying the foreclosure process if the right buttons are pushed. And the good part is a homeowner does not need a lawyer's service to be successful using this approach. Third and can be considered the most effective among the three, is Finding Inaccuracies on your Housing Contract. This strategy is considered the most effective because it can actually delay the foreclosure process for more than 2 year and save the homeowner's property. Few homeowners have ideas that contracts made from the last 2 to 5 years contain inaccuracies, but lawyers do and in fact most of them are not willing to share their knowledge with just an ordinary homeowner because they themselves use this strategy to earn more money from their clients with the same case. It is not just the lawyers who knew about the inaccuracies on the housing contracts but mortgage companies do too. These mortgage companies have been vigilant in keeping this information from the homeowners for years. With this approach the tides can surely be turned, it is the homeowners who will have the power over their lenders and not the other way around. So, while Obama's administration is finding a way on how to reform the Mortgage Modification Program, which is clearly not working and will not work unless it is revised, every homeowner will have to learn how to defend themselves from foreclosure and from ending up losing their property.
The Story Behind Repo Houses (And Why They Are Good Buys)
Foreclosure houses are flooding the market, creating a niche of their own in the real estate industry. They are cheap buys and many people have recognized their investment potentials. Why Foreclosures Houses are Cheap Buys: Repossession houses are on the market for sale at very low prices. Basically, these houses were foreclosed by banks and mortgage lenders because the homeowners defaulted on their mortgage. To recover the unpaid balance of the loan, banks and mortgage lenders do not have a choice but to foreclose the properties. On the part of banks, many want to sell the foreclosed properties immediately to recover the unpaid loan balance. Banks also want to cut their losses because they know that the longer a foreclosed property remains unsold on the market, the bigger their losses will be. Also, having a long list of foreclosure homes on their inventory would not look good on their business image. If you are planning to buy a distressed property directly from a troubled homeowner, you can also expect a bargain. Many foreclosure property owners prefer to avoid the trouble and stress of getting into the foreclosure process. This is the primary reason why they are willing to sell their homes at real bargain prices. Pre-foreclosure sale is also one way to save their credit rating which will be completely ruined if they allowed banks or mortgage lenders to foreclose on their houses. The Many Opportunities of Foreclosure Houses: Foreclosure houses represent many possibilities for smart investors. They buy these properties at almost 50 percent below their market value, do some minor repair and re-sell them at a profit. Some rent these properties while waiting for the real estate market to bounce from its current slump. For other people, foreclosed homes are the only option they have to own properties. The cheap prices allow them to finally be able to afford to buy homes they can call their own. And as long as you do some research before making a buying decision, you can be sure that repossessed houses are the best buys to make. Joseph B. Smith has been educating buyers on the finer points of Repossession Houses at Repo-Homes.com for over five years. Contact Joseph B. Smith through Repo-Homes.com if you need help finding information about Repossession Houses. Article Source: http://EzineArticles.com/?expert=Joseph_B._Smith
