YOUR home going into foreclosure is a traumatic event for any homeowner. It is the legal process whereby property rights to one’s home are stripped away due to inability to maintain the obligations of a mortgage loan. The actual process varies by State of residence, and can take from 6 weeks to 18 months, depending on the jurisdiction.
Once a Trustee Sale date is posted, the property will be auctioned on that day by a representative of the county court or the lender in order to satisfy the debt on the house. The investor usually gives instructions to the loan servicer to bid at or near the value of the debt. The servicer usually wins the bid because foreclosure generally occurs only when the debt is greater than the value of the property. The servicer or investor must then manage the house, provide repairs, and sell it through normal real estate channels, hoping to lower the final loss from what would otherwise have been realized if a third-party bidder had purchased the property at the foreclosure auction.
Foreclosure is then not only a costly experience for the family losing a home, but can be a lengthy and expensive procedure for the loan investor, the servicer, and any insuring agency that is also involved. All cost I believe regardless of how your property is sold or taken back by the lender will be at the seller’s expense. Contrary to popularly held beliefs, these mortgage market participants lose money on nearly all foreclosures.
Work out plans with the lender to reduce rates or payments could be a Win-Win Situation for both parties involve. There are government sponsored agencies that help homeowners refinance their current residence to the existing market value of their property thru a program called Making Home Affordable (HAMP), this program is not for everyone but www.NACA.com allows speaking with a counselor and finding out if you will qualify for this program. You will need to also get your existing lender to agree to a discounted note, which is the biggest hurdle you will have to go thru.
Selling your property and getting your lender to agree to a short sale is another alternative whereas your net loss would be substantially lower. The lender by agreeing to lower your loan balance thru the sale will hopefully agree to forgive your debt and not pursue a deficiency judgment against you. Look into Home Affordable Foreclosue Alternative (HAFA) if qualified this program will grant sellers $ 3,000 at closing and guarantee deficiency waiver.
When you decide to move forward with a Short Sale, the most important part of the closing is the Short Sale approval letter, please be sure to review the terms and conditions. Here are what you need to look out for :
Zero Promissory Note – Account balance to show zero and credit report to show : Paid as Settled for less than Balance, zero past due amount. No future deficiency judgement to occur.
Please be sure you see what you are signing especially towards closing.
Tips to avoid Foreclosure scams, very simple. Don’t pay anyone any fee to process your loan modification or short sale. There are non-profit agencies that will do these services for free. Real Estate Agents selling your property will be paid at closing thru your net proceeds. Remember , these lenders are more than likely just servicer, meaning they are servicing the loan for Big Investors and have no legal authority to reduce even your interest rates. So, you tell me when someone knows your current lender, do they really know who own your real loan?
It’s become more apparent that a lot more people are trying to find alternatives to foreclosure which is the right thing to do. But be realistic and well informed before making a decision. Again, I stress no more that being well informed of what you are willing to do will help you in the long run and avoid costly financial mishaps that you cannot really afford.
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Call me if you should have any questions, (562) 697-7028 or write to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Your questions, information will be always welcomed. Ken Go 1st Innovative Finance at your service. Someone asked me how how they should repay me for my time and advice. I said just send me or the newspaper information that you are benefiting from this, that will be enough, I work for referrals too. Thank you.
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