Posts Tagged ‘Foreclosure’
Homeowners Associations: The New Foreclosure
"I had no idea that they could foreclose," Tony Goodman tells me. Neither did I, but Goodman's homeowners association did just that in April because he owed $769 in back dues.
Tips For Turning Bank Property Foreclosures Into Rentals
Buying bank property foreclosures and turning them into rentals can give you regular sources of income as long as you research, plan, implement and make the needed adjustments as you manage your rentals. First, you need to ask yourself if you are able to be a landlord. This is important because you need to have a stronger personality to be able to deal with renters, collect rent, implement what are in the contracts, and evict tenants who lose their sources of income and unable to pay the rent. Secondly, you need to look at your investment money. It should be enough not only for the down payment and closing costs for the foreclosed property you are going to buy, but also for costs of repairs, HOA fees, taxes, insurance and other unexpected expenses. You should also set aside reserves for the initial months you do not have tenants or for times renters leave without immediate replacements. Now that you are ready to buy a foreclosure and be a landlord, the next important thing is finding and choosing bank property foreclosures with the greatest prospects of getting good tenants and strong investment returns. Of course, foreclosed properties in the best locations are the best, but the prices may be beyond your budget. What you do is to find the property within your budget in a neighborhood near major transportation links. It should have access to schools and to facilities needed by renters you are planning to target. Additionally, make sure that you are buying a housing unit in a subdivision or a condo building that allows renting out. Some housing associations set a certain percentage of units for rentals; others do not allow any rental unit at all. Lastly, hire a licensed and experienced inspector to do a thorough inspection of bank property foreclosures you are planning to buy. This way, you will have an accurate estimate of your repair costs and you can negotiate better the final purchase price with your seller. Joseph B. Smith has been educating buyers on the finer points of Bank Property Foreclosures at BankForeclosuresSale.com for over ten years. Contact Joseph B. Smith through BankForeclosuresSale.com if you need help finding information about Bank Property Foreclosures.
The Obama Mortgage Plan – Are You Close to Losing Your Home?
Due to the recession, there has been a long period of unemployment, which has caused many families to live in fear of losing their homes. There are many other factors that can also lead to financial distress. Many Americans have been put in a situation where they can not make their mortgage payments. What many people do not realize, is that the $75 Billion that was released from Congress can also help to keep you from foreclosure. This created a program call the Obama mortgage plan that began to give incentives to banks to help you keep your home from foreclosure. Fact: Assistance is available to save your home through the Obama mortgage plan. The government is aware of the problems that so many people are experiencing. There have been billions of dollars set aside to assist homeowners in making their mortgage payments. Fact: Banks are now getting incentives to help you from going into foreclosure with your home. Fact: After congress released stimulus money to bail American out, many people have been able to keep their homes out of foreclosure. Why do American' s have a higher chance of keep their homes after the stimulus bill was passed? After Congress released $75 Billion to bail America out in the housing industry, banks were given incentives to encourage them to help you keep your home. This means that the Obama is working to help Americans keep their residence. Hence, the name "The Obama mortgage Plan". There have been over four million families who have had success through the Obama mortgage stimulus plan. The plan helps people who are living in fear of foreclosure by restructuring loans. Families are able to make their house payments, and can stop worrying about loosing their homes. Fact: There is no reason to lose your home when $75 Billion has been spent to help you keep your residence. The Obama mortgage refinance plan is set up to make sure that mortgage payments will not exceed 38% of the homeowners income. Money is available to help reduce payments so that homeowners can also pay other bills and keep food on the table. These reductions can last for up to five years. There are private American companies that are joining the effort to help, by making legal assistance available for those who need it. If you are a financially concerned US citizen, you should take advantage the great opportunities available to help you save your home from foreclosure. You can Save Your Home They are a private company that gives free info on how to save your home. There is no charge. Just enter your email address. Click Here find out what Obama's program entails.
Picking Out the Best Option From Lists of Home Foreclosures
When looking at lists of home foreclosures, a homebuyer should not only pay attention to the cheapest houses included in the list but should also consider the potential of these properties to provide future benefits. A buyer might enjoy the immediate advantage of buying a cheap dwelling, but in the long run might have to take losses due to decreasing home values and lack of equity. Location Considerations It is highly possible that the cheapest homes found in listings are those that are located in poorly developed and blighted areas. The question is; should a home buyer take advantage of these low prices and purchase a home from these locations? He probably should not. Regardless of whether he plans to use the home as a residence or as a form of future investment, the decision might not be justified. Houses located in areas suffering from blight are not highly recommended as places of residence since crime rates will likely be high. The future might not also offer too many opportunities for a sell-off since it might take these areas some years to recover and the property might already be deteriorating by then. Best Places to Buy Among the residential properties included in lists of home foreclosures, those that are located in metro areas that have the most stable economic conditions are buyers' best options. These include Texas, Indiana, South Carolina and North Carolina. These states have enjoyed a steady employment rate and economic condition and their housing markets are relatively in good conditions compared with other metro areas. These states also did not suffer from sudden upswings in home prices prior to the foreclosure crisis, so values of homes have not declined too drastically either. Such market characteristics can offer home buyers the possibility of increased property value in the not too distant future. They will be able to explore the option of selling their properties in a few years time without fear of getting a selling price that is less than the amount they paid to purchase their homes. Lists of home foreclosures should not only be evaluated through home prices but also in terms of location and potential future benefits. Home buyers would be better off buying at a slightly higher price if the future offers a surer benefit. Joseph B. Smith has been educating buyers on the finer points of Lists of home foreclosures at ForeclosureListingsNationWide.com for over five years. Contact Joseph B. Smith through ForeclosureListingsNationWide.com if you need help finding information about Lists of home foreclosures.
Fannie Mae: Walk Away and You Will Pay
An announcement from government-owned mortgage giant Fannie Mae warns: "Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure."
Short Sales and Promissory Notes – What Options Does a Homeowner Have?
Going through the short sale process with the bank can be a lot like a soap opera. One minute everything seems to be going fine and the next minute the short sale is on the brink of failure. One of the situations that can really cause a wrench in the works is when a short sale approval letter is received with a promissory note attached. What this means for the homeowner is that the bank will only approve the short sale if the homeowner agrees to sign a note for either the full deficiency owed or a portion of it. The deficiency is basically the difference between what the bank lent you and what they finally get back from the short sale transaction. Getting that promissory note can be very distressing and often causes the short sale process to come to a screeching halt. The promissory note is basically a new loan the bank wants the homeowner to sign to cover their loss from the short sale. Some things to keep in mind about the promissory note are: 1. If the note is not signed by the homeowner the short sale is dead 2. The note is not tied to the property in any way and is considered an "unsecured" debt (much like a credit card) 3. The note may actually have pretty good terms in respect to the duration of the loan and the interest. Some homeowners may be able to handle the low payment terms the bank lays out in the note. So, what are homeowner's options in this situation? Below are some possible options: 1. Don't sign the note and push back on the bank to see if they will remove the note as a condition of short sale approval. This does happen on rare occasions. Good negotiation skills are needed. 2. Don't sign the promissory note and let the short sale process die and the home go to foreclosure. This is not usually the funnest option but may be the only option depending on the financial status of the homeowner. If the homeowner is mentally willing to make the payments on the promissory note but does not have the financial capability then this may be the only option. 3. Negotiate better terms on the promissory note before signing. The bank may agree to some changes to the terms of the note including duration of the loan, interest rate and monthly payment amounts. 4. Sign the note. This option allows for the short sale to move forward. The foreclosure is avoided and a much smaller payment is owed to the bank every month. 5. Sign the note then settle the debt down the road. Going this route requires some courage since you have to sign the note first and then try to approach the bank after-the-fact to negotiate a one-time settlement payment for a fraction of the original promissory note amount. Since it is an unsecured debt and is usually handled by their collections department, they may agree to the one-time settlement option. It goes without saying that each bank and investor backing the loans have their guidelines and policies about promissory notes. It is important to understand the risks involved and weigh the cost vs. benefit of whatever decision is made about the promissory note. Either way, the end goal should be for the homeowner to move on with their lives. M.D. Rogers is a seasoned investor with experience in distressed properties. Go check out his most recent website to help Harley owners find the best Harley Motorcycle Cover. There you can also find specific information on the Harley Davidson Motorcycle Cover.
Losing Your Home to Foreclosure – Is a Short Sale the Best Way to Go?
With the millions of Americans behind on their mortgage or are about to lose their home to foreclosure provides a great opportunity to look at some potential options for those folks in trouble with their homes. One of the most popular ways to go is what we call a "Short Sale." Essentially, this is a way that someone that can't make their mortgage payments AND the amount they could sell the house for is less than they owe on their mortgage(s). The short sale is not a new way to get rid of a house it is just become prevalent in today's world thanks to the millions of potential foreclosures that are out there. For example, let's say the Jones family has a house that they bought for $250,000 three years ago and put 5% down ($12,500) so they had a mortgage balance of $237,500 and over 3 years they paid it down to $228,199. Mr. Jones loses his job and they don't have enough savings to continue to make their house payment, in fact they are 2 months behind so they actually owe closer to $230,500 with interest and penalties. They would like to sell the house, but the market for their home could only get them about $225,000. This is what they call being "underwater on your mortgage." A majority of successful home sales are done with a Real Estate Agent, so if we factor in that we'd need to add at least 6% ($13,500 6% of $225,000) to the equation. So if the house sold for $225,000, we owe $230,500 and need another $13,500 to facilitate the sale. That means the Jones' family would need at least $19,000 (Owe $230,500 + $13,500 to sell = $244,000 minus $225,000 sale price = $19,000 difference) to facilitate the sale. Remember, they don't even have enough money to make their payments so how could they come up with $19,000? (To keep this simple we didn't include potential sales concessions, property taxes due, any repairs needed, etc. but all those costs would be added to the total the Jones family owes.) In order to sell the house the lender would have to agree to take $19,000 less than what is currently owed to them. Why would a lender want to do that? Well, when a house goes completely through the foreclosure process the costs could be much higher. The lender would have to pay the legal costs, it takes longer so they miss more payments (no interest payments), a lot of the time the house is left in poor condition so they either have to spend money to fix it or accept a lower price for its condition, and they have to pay a Real Estate Agent to sell the house and any other sales concessions. The bottom line is that the foreclosure process could cost the lender thousands and thousands more than to cut their losses and do a short sale. It makes sense to cut one's losses, yet the lenders still make this process extremely difficult and their delays can make it even tougher to get a buyer to stick thru the home buying process. Sounds like a great deal for the Jones family, they get rid of their house and don't have a foreclosure on their credit, right? It's not quite that simple. First of all, contrary to popular belief, a short sale has a very similar impact on your credit and your ability to buy a home in the future. Future lenders will look at it much like they would a foreclosure. The credit score will suffer a significant drop, just like a foreclosure, maybe not quite as much but it will be very close. It will take a few years before you'd be able to get financing again and I would look for that time frame to be longer as this current crisis plays itself out. You will likely have to wait 3 to 4 years or more even with a short sale before you can qualify to get a new home loan AND your credit score will have to have come back up significantly, which doesn't just happen. Cleaning up your credit will take work on your part too. Another issue is the amount that the lender "wrote off" on what you owed them. The $19,000 in our example could be held as a "deficiency balance" that you would likely have to pay or some lenders would require the Jones family to sign a promissory note to repay that money (which can be a legally enforceable debt that could have a monthly payment attached to it). If the lender agreed to "forgive" the "deficiency balance" then they could issue you a 1099 form which would mean you would have to pay taxes on that money like it was income. The point here is there are many variables that must be fully understood before attempting a short sale so trying to do this on your own, or with the help of just a Real Estate Agent is probably not a good idea. You need to also involve a financial pro that understands all the possibilities and probably even look for a real estate attorney that can help to make sure you are fully protected from the lender coming back at you. I would also strongly recommend a conversation with a Bankruptcy Attorney to make sure you understand all your options. All in all "Short Sales" can be a viable way to get out from under a house you can no longer afford, but it isn't a quick and simple process. In fact it is such a complex process that trusting just one individual to guide you thru it is not a financially intelligent thing to do. Real Estate Agents are not necessarily financial experts or legal experts, financial people are not attorneys may not understand mortgages and how they work so you'll need to find one that understands this unique discipline and attorneys are not financial pros nor are they necessarily well versed in selling homes. Kurt Jackson, Financial Pro 4 the Average Joe is a credit expert and is well versed in the potential financial aspects of the short sale and other ways to minimize the damage that someone with mortgage and housing issues will be facing. If you or anyone you know is facing issues with paying for their home have them call me at 816.582.5532 for a Free Consultation to assess the situation. Kurt Jackson, Financial Pro 4 the Average Joe combines years in the mortgage and financial services to offer a unique way to help Average Americans have someone working for YOU in advising YOU to do what is best for YOUR interests. Check us out on line at http://www.FinancialPro4theAverageJoe.com. Article Source: http://EzineArticles.com/?expert=Kurt_Jackson
Submit Winning Offers For Bank Foreclosed Houses
Buying bank foreclosed houses involve the use of the right strategies and proper planning. The amount of work that goes in foreclosure investing such as conducting research, hiring professionals, and inspecting homes should at least be compensated by a reasonable success ratio. This is extremely important since buying bank owned houses requires a rigid, often inflexible process to which you should comply. This only means that your chances of success depend highly on how your offer is going to be perceived by bank officials who most certainly would be very careful in evaluating your bid. A well-thought out plan will certainly increase your chances of hitting success when it comes to bidding for REO properties. This is because banks are judicious when it comes to awarding properties to the right bidder which they need to do in order to maintain their reputation of being capable of sound lending decisions. In addition, employing good strategies will not only minimize frustrations but will also save you precious time and thousands of dollars. Get Preapproved One of the most important things that banks and lenders look for in a bid is the financial standing of the bidder. Getting a preapproval means that you have been preapproved for a specific price range of properties. This sends a signal to the bank that you are serious about buying the property since you have exposed yourself to the whole process of submitting financial data and records to a loans officer to secure a preapproval. And serious buyers are what banks actually look for. Because of their extensive experience in foreclosures and bankruptcy, they are aware that persons with good credit history backed by strong financial state are more trustworthy when it comes to repaying loans. Once you have been preapproved, make sure that you attach your preapproval letter to your bid. This will ensure that the bank will take notice of this fact and can even get them to prioritize your application over others who have been unable to get preapproved. Since the foreclosures market is a tough one, getting an edge in your application can earn points for you over your competitors. Bid Competitively Getting a good bargain is every investor's goal. But when buying bank foreclosed houses, being unreasonably cheap in your offer can turn off a loans officer who will determine whether your application deserves a review or not. On the other hand, a competitive bid will definitely attract the bank's attention to regard your offer seriously. Bidding competitively involves careful research and scrutiny of the market. Usually, when you have found a property or properties that you are deeply interested in, you may then proceed to researching and comparing its listing price to its current market value, the unpaid mortgages, and outstanding debts attached to it. This will give you an idea of the price within which to negotiate with the bank. Bear in mind that the bank sells a property in order to recover its losses. This means that they will not be accommodating to bids that are way below its target recovery value. Be Responsive To The Bank Dealing with a bank means dealing with a whole financial institution. After you have submitted your offer to the bank's assets manager or REO department for a particular property that you want to buy, you should maintain communication with the bank. This is very important since it is highly possible that your bid is only one among the many offers that a property receives in a day. When the bank reviews your offer, it may need to reach you to clarify some terms and details in your bid and you should be able to address this as quickly as possible in order to avoid having your application at the bottom of the pile. If you follow these simple tips, you can be sure that your efforts at buying bank foreclosed houses will definitely be fruitful. Joseph B. Smith has been educating buyers on the finer points of Bank Foreclosed Houses at BankForeclosuresSale.com for over ten years. Contact Joseph B. Smith through BankForeclosuresSale.com if you need help finding information about Bank Foreclosed Houses. Article Source: http://EzineArticles.com/?expert=Joseph_B._Smith
Great Tips to Make a Great Commercial Foreclosure Purchase
The commercial real estate market is terrible. There are signs that office vacancy is leveling off. Occupancy has stabilized in multifamily. So, the economics of owning these projects is stabilizing. Unfortunately, many owners remain over leveraged and the bad news is about to get worse for them as the markets pick up steam and the economy improves rates are about to begin heading the wrong way. This could not come at a worse time as these owners are going to face loans that can't meet Loan to Value (LTV) ratios suddenly collapse on the basis of Debt Service Coverage (DSCR) as well. Lenders are going to be forced to write these loans down and foreclose to establish credible financing on the assets. For buyers, the good news is these conditions may persist for 36 to 48 months. So, if you are a buyer who can bring substantial equity capital or all equity to deals, the opportunity to buy properties at sharply depressed values and to lock it very solid cash on cash returns has never been greater and the condition will improve for you even further in the coming months and years. Principals and investors should be gathering resources for acquisitions now. The greatest opportunities may well be some of the best assets as the trigger for defaults is being driven by very strong underwriting characteristics that created values that today's commercial market will not support. The best locations, the highest trafficed roads, the best sources of employment, the best shopping, and the very best facilities combined with properties that provide the greatest possible average occupancy letter may in fact represent some of the most at risk assets. Investors bringing plans with conservative loan to values, captive debt or 100% equity purchase plans, proven management, and bank accounts that say "low risk" to bankers are going to be the preferred purchasers. Investors without a great deal of experience or with no experience should seek to attach their funds to proven players where they can substitute those credentials for their own lack. On the other hand, if you are an investor who is in this position. Your best bet is to cut a deal with outside investors to improve your underwriting ratios. Put in significant cash reserves. Reduce your LTV position. Improve your DSCR position. And, position to move ahead as a leader in this environment and avoid becoming a casualty. Take the lessons learned and become the experienced buyer. Blake Ratcliff (US Naval Academy Graduate & Marine Officer, Serial startup entrepreneur, COO/CEO, multifamily / residential investment founder, and property manager). Blake's crafted 100+ business plans, prepared and delivered 1000+ investor presentations, and is an expert financial modeler. A deeply experienced real estate business person and startup business expert, Blake hones your Business plans, reports, and presentations.
Banks Ignore Delinquent Borrowers
Some encouraging signs on the foreclosure front may not be as rosy as some are reporting.
