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Archive for Foreclosure
Jan
18
Understanding the Short Sale Process
Posted by: | CommentsSan Diego Foreclosures For Sale
In real estate industry, short sale has been considered to be one of the worst things that can happen to your house. Of course the top notch on the list is no other than foreclosure. Short sales seem to be much better than bankruptcy and foreclosure. When you plan to sell your house, majority might think you are doing a short sale. This is very common in the areas where house market values went down substantially. And such process has several advantages to those sellers who are on the verge of getting a foreclosure as well as buyers who find for a deal on their next house to live. But short sales can also be confusing, to give you an overview of this complexity, go over the rest of this article.
When you talk of short sale, this is primarily selling a house with a price lower than the mortgage value. A seller who faces the threat of foreclosure engages into a contract with their mortgage lender to get a price for the house that is less than the amount they borrowed. The seller has no income on the sale but stays away from the probable issues and prevents from making it a foreclosed property.
On the other hand, short sale can have some benefits. When sellers decide to dispose the property, they are free from going through the tedious process of foreclosure and avoid the impact of such on their credit record. In a short sale, the seller and the lender talk together and determine the details of the agreement, but it is usually the sellers who finish a short sale to put an end to the existing loan.
The major advantage to the buyers is the fact that they are transferring into a new house at a cheaper price. In addition to that, buyers may think that short sales have other advantage over foreclosures since they will not have any problems on removing the seller from the property.
Certainly, mortgage lenders have other advantages also. In such process, lenders do not have to undergo the complicated foreclosure proceedings. More than anything else, lenders are concerned in getting their money back, and they basically want to stay away from taking the responsibility for disposing the property. Thus, short sale can actually do well to them.
On the other hand, it is inevitable that you can encounter some drawbacks in this process. Initially, lenders will propose to ease the seller of the responsibility of settling the balance of the loan. Thus, sellers should obtain a firm commitment from lenders that says this is part of the agreement. Furthermore, as much as the sellers want to avoid foreclosure, short sale can still affect their credit record to some extent. Hence, sellers should tackle this matter with their lender to know how the procedures will be reported to the credit institutions.
One important thing to consider is that sellers are evaluated if they are qualified for a short sale or not. Take this as an example, few lenders will engage into a short sale transaction with sellers who have a good mode of payment. So, if you are a seller and planning to get a short sale, you will have to talk to your lender and ask the available alternatives.
Overall, if you are a buyer who is planning to enter into a short sale, it would be prudent to get an advice from a real estate broker who can give you a complete explanation of how the process works. In this manner, you can be prepared to incorporate all the necessary information to complete the transaction and live into you new abode.
Jan
18
Some Advice On How To Avoid Foreclosure
Posted by: | CommentsEspecially in today’s economy, thousands of people are struggling to pay the bills. This, unfortunately, includes dealing with the threat of foreclosure on their homes. It is possible; however, to avoid foreclosure. Follow these few guidelines to avoid having your home taken away from you.
The very first thing you should do, when you run into trouble, is call your mortgage company. You will need to, specifically, talk to someone in their Loss Mitigation department. Explain your personal and financial situation to them. Plan to divulge information you may not want to share, and be ready to give them proof.
Mortgage companies are prepared to deal with many different financial hardship situations. Depending on your specific situation there are several different options that the mortgage company can take with you. One of the most common is known as forbearance. This action allows you to repay missed payments.
Other approaches are available. Mortgage companies may give you another loan for the late amount, add the late amount onto the end of the mortgage, or even consider waiving a payment. All of which are fully dependent upon your exact situation.
You may not have even considered this, but some people leave their home as soon as they think they will lose it. This; however, will put you in a place where you can no longer be assisted. There are counseling agencies, in your area, designed for helping with these particular cases. They are more than willing to help, providing you still reside at the property. Take all the help you can get.
If your mortgage company has already formed a Notice of Default, your options have just lessened. At this point you will have a much more difficult time getting assistance from anyone, including your mortgage company. One of the only options you have, if you want to save your credit, is to sell your house. Problem is, you might not get enough money and you still have to pay off the remainder of the loan. On the other hand, a few grand is way less than a house.
There are a couple other options, at this point, but they will you’re your credit almost as bad as the foreclosure would. Just keep in mind that you have options. Acting before things get out of hand is your best option and will be the one that works for you. Do not let things get to the point that there is no return. If you want to avoid foreclosure, work with your mortgage company immediately.
Learn how to avoid foreclosure by using short sales. Head online today and you can learn how a short sale will help you out.
Jan
17
Foreclosure or Short Sale?
Posted by: | CommentsSan Diego Foreclosures For Sale
In June 2009 there were over 16,000 new foreclosure filings with a total of over 101,000 for the first six months of 2009. This figure is continuing to rise because many homeowners are unable to meet their mortgage payments each month. In the majority of cases this problem is out of their control. In the current economic climate many people are losing their jobs making it impossible for them to meet their living expenses. In the US more than 535,000 jobs were lost in April of 2009 and although the rate of job losses is levelling off, there really doesn’t seem to be an end in sight. In Phoenix, Arizona nearly 75% of homes for sale in June 2009 were foreclosures. An increasing number of homeowners are using a short sale to extract themselves from the foreclosure procedure.
When a lender issues a foreclosure, there are certain steps he needs to complete, according to the laws of Arizona. The process begins when the lender files for foreclosure. Filed with the court are the actual debt and the amount of the default. The homeowner has to be notified either in person or by publication. If the homeowner does nothing, the court can rule against them in their absence. The court then directs that a sale of the property must occur for the lender to recover the amount owed. For court foreclosures, the sale is conducted about 45 days after the court directs the sale
As soon as a foreclosure notice is issued the homeowner must take steps to stop it from reaching a conclusion. One way to do this is to consider a short sale. This is a process that involves persuading the lender to accept less than is actually outstanding on the loan. This process is a very time consuming and complicated one but, if it can be successfully negotiated, in most cases the homeowner can walk away without any additional costs. However, if the amount of the sale at foreclosure does not meet the debt, the lender can sue for the difference. But, in the State of Arizona, this is not allowed on single one or two family homes of less than 2.5 acres.
For most homeowners the complex process of negotiating a short sale would not be an option. So the solution would be to find a reputable Short Sale Investor to negotiate on their behalf. A Short Sale Investor has all the necessary experience to negotiate with the lender in order for an agreement to be reached. His expertise in this field means that the bulk of the work in done by him. It will be necessary to provide him with a lot of information about your financial situation in order for him to put together the best possible argument so your lender will accept your application for a short sale.
You may have given up on the prospect of holding on to your home but negotiating a successful short sale means you can walk away from this with dignity and begin to look forward
Nick Johnson or Motiv8td Investments LLC has been helping homeowners through the process of Short Sales and successfully helping them from a foreclosures in the Phoenix, Arizona market. Make sure to download your FREE report on what options you have in stopping foreclosure in Phoenix, Arizona at Payment-Takeover.com
Jan
02
Short Sale Hardship Letter: Tips For Writing A Letter Of Hardship To Your Bank
Posted by: | CommentsSan Diego Foreclosures For Sale
A short sale hardship letter must be provided to mortgage lenders when borrowers engage in short sale transactions. When banks enter into shorts sales they agree to accept less than the borrower owes, as long as the borrower can sell their home within a certain time period.
The short sale hardship letter is used to provide details of the events which caused the borrower to become delinquent on their mortgage. Lenders require borrowers to submit financial documentation proving they are unable to cure mortgage arrears and have no choice but to sell the house short or fall into foreclosure.
Short sale letters should include a timeline of events and explanation of actions the borrower has taken to resolve financial challenges. The letter of hardship should be thorough, yet concise. While lenders can be sympathetic to your plight, they aren’t interested in knowing every detail of your life.
The following is a fictional hardship story which provides an overview of the type of information to include in a letter of hardship.
John and Jane Jones purchased their home in June 2004. At the time John and Jane were employed fulltime, held financial portfolios and a well-stocked savings account. In May 2005, John was involved in a motorcycle accident and required multiple surgeries and months of physical therapy.
John was unable to return to work on a fulltime basis for three years. Although he received disability payments, the amount he received barely covered the private nurses John required the first year of his recovery. The couple had to tap into their savings account to meet their monthly obligations.
In July 2007, Jane’s employer of ten years suffered a fatal heart attack. Unable to continue operations on her own, his wife sold the business and Jane lost her job and their health insurance. In order to pay for John’s therapy, the couple liquidated their financial holdings.
In September 2007, Jane was diagnosed with breast cancer. Although it was caught early, the Jones’ did not have health insurance and the treatments quickly depleted their savings account. Fortunately, Jane only had to endure one round of chemotherapy and a relatively minor surgery. She was able to return to work within three months.
With years of financial setbacks, the Jones’ began falling behind on their mortgage payments. Within a matter of months they were forced into bankruptcy. They filed for Chapter 13 protection and reorganized their debt. They were able to adhere to their repayment plan and then the bottom fell out.
In November 2008, Jane’s cancer returned. Although they had health insurance, Jane’s treatments were much more aggressive and she was unable to work. The Jones’ missed two of their Chapter 13 payments and their lender petitioned the court to have their bankruptcy dismissed.
The lender’s attorney made a court appearance and after hearing their story, offered to allow them the option of a short sale. Although the Jones’ wouldn’t be able to stay in their home, they would be able to walk away owing nothing.
Every person facing foreclosure has a hardship story. Your story is just as important as the next person’s. Hardship letters are read by loss mitigator’s. Although loss mitigators do not make the final decision on a short sale they can have substantial influence and will root for those they believe are experiencing serious financial hardship.
Keep in mind loss mitigators are bombarded with short sale offers. When writing your short sale hardship letter stick to the facts and avoid portraying yourself as a ‘victim’. While you want bank mitigators to empathize with you, you don’t want them falling asleep while reading your letter of hardship.
Simon Volkov, author of “The Short Sale Hardship Letter eBook course” shares his knowledge, resources, and insider-secrets while teaching readers how to write the perfect hardship letter. This step-by-step guide is short, simple and easy-to-understand yet provides powerful techniques you won’t find anywhere else. Available for instant download at www.ShortSaleHardshipLetter.com.
Dec
30
The 3 Biggest Misconceptions That Real Estate Agents Have About Short Sale Listings
Posted by: | CommentsSan Diego Foreclosures For Sale
First of all, “yes” some short sales take long to sell and “yes” some short sale listings can be frustrating. But let me tell you this; not all are created equal! With a little patience and a little creativity you can overcome some of the shortcomings of listing pre-foreclosure/short sale properties and make a lot of money by helping homeowners get out from underneath the huge burden of debt and stress they are under.
Let’s deconstruct three of the biggest short sale myths:
Yes, it’s true when it comes to a short sale; the lender is in the driver’s seat. And since they hate to lose money they tend to reduce the amount of commissions by an average of 1%, meaning that if your area pays out 6%, they will only approve 5%, which will be split by both the agents involved in the transaction.
You know what I say to that? Who cares! Be creative! Did you know that there are 7 additional profit centers that can offset your 1% cut in commission? Let’s take a look at what they are:
The “Loss Mitigation Fee” is a fee that we collect only when we successfully negotiate a short sale and have the foreclosing lender pay for all of the closing costs (the realtor commissions, attorney/title company fees, conveyance taxes, etc.).
The average loss mitigator receives an average of 30 NEW files a day. Not a week, not a month but a DAY! That is part of the reason that short sales can take a while, but it isn’t the main reason. The primary reason is because the majority of real estate agents submit short sale packages that are less than adequate and professional! Meaning;
Those and many more reasons cause short sales to get hung up. Once again, take what the defense gives you. If loss mitigators are overwhelmed, then the key is to put together a professional and presentable short sale package guaranteed to get your short sale offer reviewed and approved.
With the right system they are not hard! Let’s take a look at how to overcome the two biggest reasons why short sales blow up right before the closing.
The key is not to have only one buyer but to have a pool of qualified buyers that are pre-approved. The best buyers to keep an eye out for are those that are already pre-approved and that have funds in place to make an actual purchase.
The two easiest ways to do that are: Start networking with every real estate agent that specializes in buyer’s representation. They are easy to find because it is in all of their advertisements. Start working closely with every single mortgage broker or direct lender that you know, or that one of your fellow agents knows.
In conclusion, listing pre-foreclosure/short sale properties can take some time to close. However; in this market everyone needs to stick together and help one another out. By building the right network of real estate professionals, we can all ensure that our listings (short sales or not) do not sit out there without a buyer!
For more real estate industry news and loss mitigation blogs and videos visit www.RealEstateBusinessMentors.com or visit www.AskBobLachance.com for any short sale bank negotiating questions.
Before joining North Shore Enterprises (NSE) in 2004, Bob Lachance was a 4-year-collegiate-scholarship athlete in ice hockey at Boston University where he won a National Championship in 1995. After leaving BU he enjoyed a successful 8 year career as a professional hockey player. Upon retirement from hockey, Bob completed several profitable real estate rehab projects for his own benefit. He then joined NSE as an associate responsible for property acquisitions and loss mitigation/lender negotiations. Bob brought the same determination and work ethic that lead to great success in his professional sports career and thus generated more acquisitions and short sale acceptance letters in a shorter time frame than any associate before or since. His outstanding performance led to a promotion to partner in 2005. Since that time, Bob has taken responsibility for all the day to day operations of NSE. As partner, he has overseen the acquisition of, the loss mitigation, and the disposition of over four hundred properties. Bob continues to be directly responsible for identifying good candidates for acquisition and for overseeing bank negotiations, and has been essential to the success and growth of NSE.