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How to avoid Foreclosure

 

 

During the last 1 ½ year the rate of foreclosure properties have skyrocket leaving some lenders on bankruptcy and some others with huge losses.

 

If you are facing a hardship that is making you be late on your payments and you need to find a solution to keep your home or at least sell it in a low price market here is what you can do.

 

  1. Arrangement of payments: This is an agreement between you and the lender that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what you where late with your regular payments until you are up to date with the loan.

 

  1. Forbearance: In this case your lender may temporary reduce or suspend your mortgage payments until you can make your payments on time.

 

  1. Loan modification: With this agreement is modified the original terms on the note so you can have more affordable payments.

 

  1. Short sale: This happens when the property value is lower than the loan amount, in this cases the lender offers you the option to get your property sold for market value. In these cases you list your property and if you get an offer the offer is draft contingent to a third party approval “lender’s approval’. This approval is base on different aspects such as: the owner’s assets, owner’s Income, Hardship suffered, and the final lender’s net after closing. Once the short sale closes usually the difference on the loan can be repaid in the way of taxes, as a percentage of the loss of the lender or through an insecure note that is when you continue paying the difference.

 

  1. Deed-in-lieu of foreclosure: A Deed-in-lieu of foreclosure is the voluntarily title transfer of your property to your mortgage company. Usually they require from you to try to sell your home for its fair market value for at least 60 or 90 days before a mortgage company will consider this option. A deed-in-lieu of foreclosure may not be an option if there are other liens on the property, such as second mortgages, judgments from creditors, or tax liens.

Foreclosure Properties

 

Commonly name Bank Owned Properties or REO Real Estate, foreclosure properties are homes that are owned by lenders, these properties usually are listed for a lot less than other properties because in these cases the owner is in need of getting rid of the asset as it represents higher expenses for the owner.

 

Get a free list of Foreclosure Properties

 

 

 

How to Buy Foreclosure Properties

 

There are many ways to find foreclosed properties such as news papers, trustee’s notices, local listing service and Lenders websites.

 

Once you elect a property you should select a Realtor or attorney to assist you and advised you during the purchase. Usually all these properties are sold as is where is which means that the lender will not perform any repairs in the house although lately in some cases the bank has no other option than to take care of some repairs to bring the property to an acceptable condition.

 

If you are trying to buy a foreclosure property we can assist you from beginning to end, we have experience working with REO Properties.

 

Short Sale Transactions

 

If you are planning to buy a distress properties one option would be to buy a pre-foreclosure property. The difference in buying a short sale differs in the fact that there will be another party other than the seller to make the decision of selling or not selling the home.

 

  1. Home Value: The home that you are buying will have to be sold at a reasonable price, market value.
  2. Third Party Approval: Sometimes there is more than one lien holder on the asset so it is usual to find a second trust, additional equity lines and unpaid taxes.
  3. Timing: Short sale transactions approvals may take up to a month and sometimes even longer.
  4. Seller’s Liability: The seller may be liable for the losses of the lender in two ways, the first is to pay it as received income in the way of a tax form 1099C or the seller may have to sign an unsecured note and continue paying the difference of the loss. In these cases usually the sellers refuses to sign and the transaction never completes.