One of the Best Quotes On Buying A Foreclosure - Buyer Be Smart
June 29, 2008
If I was an agent dealing with foreclosures regularly I would have this quote taped on my telephone.
“There’s so much inventory out there that the buyer can pick and choose,” said Susan Sirles Fidler, a Realtor at Re/Max 10, Oak Lawn. But she cautioned, “The stuff that’s almost free is almost free because it’s going to cost you an arm and a leg to put it back together. It’s not buyer beware as much as buyer be smart.” via chicagotribune.com.
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Post from: The Real Estate Bloggers
One of the Best Quotes On Buying A Foreclosure - Buyer Be Smart
Source: Foreclosure
California Foreclosure Sales Exceed 1,000 Per Day a Record Month for California Foreclosure Activity
June 29, 2008
Source:California Foreclosure Sales Exceed 1,000 Per Day a Record Month for California Foreclosure Activity
Foreclosure Cycle Makes Renting More Difficult
June 29, 2008
One of the great problems with people going through foreclosure is the failure to address the issues they are facing. We have constantly recommended to families to be in contact with their lender and honestly appraise the situation.
One of the problem with Ostriches in foreclosure is that after the foreclosure happens, finding a new place to live is very difficult. Experts recommend that you try to find a new housing alternative before the foreclosure hits your credit report.
Landlords have become much more sophisticated now and do credit checks regularly. Having a foreclosure on your credit report tells them you have trouble paying for housing and could play a decisive role in you qualifying for a rental.
As foreclosures rise across the country and skyrocket in economically depressed areas and once-hot housing markets, more apartment owners are seeing an increase in the number of rental applicants with blemished mortgage histories. That includes foreclosures, short sales - when a house is sold for less than the amount owed on the mortgage - and deed-in-lieu of foreclosure, when a homeowner gives up a house to the lender to end the foreclosure process.
Many of these would-be renters flood the so-called shadow market of investor-owned homes and condos, which make up almost half of the rental stock and are not tracked by the apartment industry. But some former homeowners are making their way to the traditional rental market, causing concern for some landlords. via Forbes.com.
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Post from: The Real Estate Bloggers
Foreclosure Cycle Makes Renting More Difficult
Source: Real Estate
Try Reverse Mortgage.
June 29, 2008
If you are younger than 60 years of age you may not have heard about a reverse mortgage but if you are over this age you probably receive something in the mail every week claiming that having one will change your life. Of course you can also find many articles proclaiming how damaging they are and this can confuse the issue plus makes it difficult for a person to choose as they do not know whether it would be a good idea or a bad one. In actual fact, reverse mortgages can be good and bad, it just depends on your situation and they have after all been around for over forty years.
The sudden stir has been caused by the baby boomer population that is about to start retiring, as of January 1, 2008. So during the next few years vast numbers of people will be retiring in America and most of those will only have their home as a possible source of income.
People are living longer with fewer retiring on an adequate income which can provide their life needs so the huge appreciation most properties have experienced allows seniors an avenue to augment this growing need for income. A traditional mortgage the individual pays a payment monthly to pay down the debt thus making the equity higher and the debt lower whereas with the reverse mortgage the borrower receives payment(s) from the lender but makes no monthly payments and the debt rises while the equity falls as payments, fees and interest accumulate.
As income is not an issue, the amount owed is paid back in full at a later date and provided the borrower has not failed to pay a federal debt, they will not be refused. There is no minimum income requirement nor is there a minimum credit score and many borrowers have been saved from foreclosure with a reverse mortgage.
Loans that are arranged via the federal government are provided on the understanding that the debt can never be more than the value of the property irrespective of how much is owed. If you are planning on moving or have no intention of using the money lent to you then a reverse mortgage is not the best plan and in these circumstances it will be more expensive.
To make sure you have all the facts, contact a financial expert who specializes in reverse mortgages and do not leave something as important as this to someone who arranges a few when he has the spare time. Fortunately the amount paid on the charges and other fees for reverse mortgages is exactly the same from one company to the next but those arranged by mortgage companies may have more choices than those operated by the banks.
If you have family it is a good idea to speak to them regarding this as you will be spending their inheritance but on most occasions it is the person requesting the reverse mortgage that has these concerns. Most family members don’t have the means to take care of their own family expenses as well as those of their parents and senior relatives, so they are extremely happy that their loved ones have a way to age in place and dignity.
Anatomy of a Housing Bubble (part one)
June 27, 2008
Recent news has been littered with stories about the housing crisis. Troubled borrowers here, devious lenders there, foreclosures everywhere; the housing market is an absolute mess. But how did the market get into such turmoil, such disarray, that even McCain, Clinton, and Obama are discussing their bailout strategies? The answer is…
Source:Anatomy of a Housing Bubble (part one)
9 Hot Tips To Avoid Foreclosure
June 15, 2008
Roughly 1.3 million homes received foreclosure related warnings last year, in 2007. There are well over 1 million already in 2008. Honestly, avoid a foreclosure at all cost, it’s your best move at this point.
A foreclosure is a legal proceeding that takes away a homeowner’s right of owning or redeeming the home that the mortgage covers. The following are ways to avoid a foreclosure:
1. Don’t ignore your problem.
Hiding your head in the sand will only get you further behind on your debt. It only becomes harder to reinstate your loan and become current. Losing your house will become a reality.
2. Contact your lender as soon as you realize that you have a problem.
Trust me, your lender WANTS to know what is going on. A lender does not want your house. They have far to many homes already. Not only do they have options to help you through this difficult time but they know your options, possible options you do not know.
Forget the embarrassment you feel by calling. Seeing your name in the newspaper stating you are being foreclosed on will be far more embarrassing then a phone call.
Calling early gives you more options. You need options at this point. Do I need to say that the problem will not go away if you ignore it! I guess I just did. Don’t hide your head in the sand.
3. Open ALL mail from your lender and respond to it quickly.
In most cases the first letter you receive will be advising you of your late payment status. It should include information about preventing a foreclosure. In a short time you will receive information regarding pending legal action. Lets talk about this. Ignoring these communications will not help your position. Claiming you never received these letters will also not help your case. If you do not respond your lender will undoubtedly contact you by telephone. Listen to me; it is extremely important that you respond to all mail and phone calls from your lender. If your lender doesn’t hear from you, they WILL start legal action ultimately leading to foreclosure. Not only will this limit future possible resolutions but these actions will only tend to increase the cost of bringing your loan current.
4. Know the rights granted by the contract you signed.
Read the loan documents you signed. Look for all information with regard to what your lender may do if you fail to make your payments. You must familiarize yourself with the foreclosure laws in your state.
5. Getting help with foreclosure prevention.
The government has put together a lot of valuable information about foreclosure prevention. You can view this information at: http://www.fha.gov/foreclosure/index.cfm.
6. Cut your spending.
Keeping your house should be your first priority. Consider what expenses can be cut in order to make your mortgage payment. Look at “luxury” expenses such as cable TV, gym memberships, eating out, going to the movies, and any other entertainment that can be eliminate. Maximize your other payment in order to stall payments to non-critical debts.
7. Use what you have to produce cash.
What can you sell to help get out of this predicament? Do you have a second car, , motorcycle, boat, or jewelry that you can sell? Do you have life insurance you can borrow on? Can you or a family member get an extra job? Do what it takes to keep from losing your house.
8. Don’t fall for foreclosure prevention deals.
Let me ask, if you could afford $1000 to pay someone to save your home would it not be better to put that $1000 on your past due loan? This is the time when the “Help You” companies come out of the woodwork like cock roaches in the night. Think about it, your contacted by a guy that wants to argue your case to your lender and all he wants is $300. I have to believe YOU would be more sincere when talking to your lender then this guy. Do it yourself and do it early and often!
9. Don’t fall for foreclosure scams!
These people also come out at night. The try to convince you that they can save your credit and give you cash in your pocket too. It could happen but more than likely you will lose big. If they want your house for your equity plus $5000 cash I have to believe you could get $20,000 or even more in a sale. Never sign a legal document before getting legal advice. No one reads all the fine print and that’s where you will be hung out to dry. Seriously, people do not chase you down to give you money unless it profits them unbelievably.
Foreclosure Investing: Telephone Magic
June 15, 2008
Are you afraid of the telephone?
You would be surprised to find out that many people do not even attempt foreclosure real estate investing because they are afraid of making a telephone call. If that is you, I have some great news for you.
I am going to take away the phone fear for you at absolutely no charge.
Welcome to the next installment of Matthew Griffin’s 7 Foreclosure Secrets where I am giving away information that is currently being sold on other websites. Why am I doing this? It’s very simple; once you see how easy it is to make money in foreclosure real estate investing, I believe you will come to me for your educational needs. Simply visit my website at www.ForeclosureProfitsNow.com.
Would you like to know how to pick up the phone and call a homeowner to discuss purchasing their property without being afraid? I’m going to tell you. In fact, what I am about to do is unprecedented.
I am going to tell you exactly what to say. It’s called a telephone script and some people would charge you hundreds of dollars for it. I’m not only going to give a script to you for free, I’m going to give you two of them.
All you have to do to work some Telephone Magic is obtain the telephone number of a prospective homeowner and, after practicing a few times, repeat the words contained in one of the following two scripts:
Script one - Hello, my name is (insert name here) and I would like to speak with HOMEOWNER NAME, please. [After the homeowner gets on the phone with you, say] I am calling you today because we work with people who are facing challenges with their mortgage. The company that holds your mortgage has filed legal documents with the county to begin proceedings to take your home away from you. These documents are public record, and that’s how we found out about your situation. We have worked with people facing this exact same issue for many years, and would like to discuss some possible solutions with you. We may be able to help you obtain a forbearance, sell your home, find a cash buyer for your home, or take other creative steps to stop the legal proceedings and keep any foreclosure off of your credit report. We would like to schedule a free, no obligation consultation to discuss possible solutions to this situation. May I set up a time for us to come meet with you?
Script two - Hello, my name is (insert name here). I have been looking to purchase a home in this area and heard that your house might be for sale. When I drove by to look at it, however, there was no sign in the yard. Is your home on the market?
As you can see, you don’t have to be afraid of talking on the phone. Simply go over these scripts until you are able to say them smoothly and confidently. Feel free to put things in your own words. You don’t want the homeowner to realize you’re reading something, so do your best to sound natural. You may want to print out the script and use a highlighter to highlight certain words and phrases as sort of an outline. That way you can say things in your own words, but if you need help, you can refer back to the script. After you have made a few phone calls, you will find that you don’t need to use scripts anymore. You will have overcome your fear completely.
Was fear of talking on the telephone standing between you and financial security? Are you not living the lifestyle you desire because you thought it was too hard to successfully invest in real estate? If so, your worries are over.
I encourage you to investigate for yourself the many advantages of successful real estate investing. If you would like additional information, including the other installments of Matthew Griffin’s 7 Foreclosure Secrets, please go to www.ForeclosureProfitsNow.com.
Foreclosure Investing: Deals - Find Them!
June 15, 2008
Some people never accomplish their real estate investment goals because they think there are no good deals left.
That is absolutely NOT true. If you know where to look, you will soon realize that there are great opportunities in your area every day of the week.
Welcome to another installment of Matthew Griffin’s 7 Foreclosure Secrets. Be sure and look for others in the series at www.ForeclosureProfitsNow.com. While you’re there, check out all the other great educational materials that will help you succeed in real estate investing.
But for now, I’m going to tell you how to find great real estate deals at absolutely no charge to you. Why? Because if you’re like most people, you aren’t living the life of your dreams. The vast majority of people are under some type of financial pressure, or don’t have enough money put away for things like college or retirement. Is that you?
If it is, I have great news for you! Real estate investing can change your life. And one way for you to be a successful real estate investor is to know how to find great deals. Here’s how:
- Legal notices. Properties that are in foreclosure are required to have their procedural details printed in the local newspaper and/or posted on a public bulletin board at the county courthouse. Because investing in foreclosure and pre-foreclosure properties can be so profitable, these notices are a great place for the savvy real estate investor to find their next great deal.
- Banks, Brokers, Closing Attorneys. If you take the time to build positive business relationships and network with other real estate professionals, you will discover that they will be more than happy to refer deals to you. Simply let your colleagues know that you are a real estate investor who is interested in assisting property owners who are in foreclosure or pre-foreclosure. You may be very surprised at how many great deals you find simply by word-of-mouth.
- County recorder’s office. Most people don’t understand that any legal proceeding involving a foreclosure or pre-foreclosure is a matter of public record. Any person can walk into their county recorder’s office and look for property information, tax liens, mortgage records, notices of trustee sale, and other indicators of residential property that might present a great deal for an investor. Take a little bit of time and visit your county courthouse; you could just walk out with the deal you’ve been looking for.
To be honest with you, there are great real estate investment deals everywhere. It doesn’t matter whether people think the local market is hot or cold; you can find the deals. You just have to know where to loo
To learn more about finding great deals, real estate investing in general, or other installments in the Matthew Griffin’s 7 Foreclosure Secrets series, be sure and visit www.ForeclosureProfitsNow.com. You’ll be glad you did.
Just What Is Subprime Lending?
June 15, 2008
Subprime Lending - What is it?
Generally speaking, subprime loans are loans that carry a higher interest rate than a prime rate loan. The ideal prospect for a subprime loan is a person with a poor or limited credit history. The higher interest rate is to compensate the lender for the increased credit risk.
Very few lenders advertise themselves as a sub-prime lender. The definitive way to tell a subprime lender is with the rates that are charged. Do I need to say, if you can qualify for a prime rate loan, avoid subprime lenders.
A subprime borrower is one who would fail to qualify for a prime loan generally due to a low credit score. That score is normally referred to as a FICO Score. The score in the mid range could qualify a borrower for a loan but additional factors are taken into account. Those factors could include the down payment proposed, your amount of debt, and your ability to document your income. Borrowers that are self-employed often cannot document their income and apply for stated income loans. A stated income loan is simply the income the borrower states on the application form. Because the income cannot be verified, the interest is higher then normal but the loan can still be given.
Subprime lenders use the same factors as prime lenders to determine an interest rate. Rates are higher with a low credit score and if the down payment is minimal. Still, keep in mind the rates and fees are higher at subprime lenders due to the higher risk and higher costs. Additionally, more subprime loans go into default then prime loans.
When Prime Borrowers Go Subprime
It amazes me when I see a prime borrower end up with a sub-prime loan. They have the credit score, the down payment and the documented income but they pay sub-prime prices. The main reason for this is that prime borrowers are constantly being bombarded by subprime lenders on radio and TV with “Unbelievable Deals” to finance or re-finance a mortgage. They pitch the cash that you can clear on the deal or the lower interest rates that lower the monthly payment. They forget to mention in the advertisement that that teaser interest rate will expire and your house payment might double.
If you’re in the market to finance or re-finance a home, please check around before deciding on a loan. TV is great for mindless entertainment but use your mind when it connects to your wallet. Check with mainstream lenders to determine your eligibility for a prime loan.
In 2006, the Wall Street Journal reported a surprising fact that 61% of all borrowers that secured subprime loans had a credit score that would have qualified them for a prime loan. Need I say more?
Subprime exist to allow access to a market of no-credit or poor-credit borrowers. These are also the higher risk borrowers. You pay more, big surprise. They lose more, big surprise. They have an endless supply of prospects, big surprise.
Taking Advantage Of A Short Sale To Stop Foreclosure
June 15, 2008
So you are three painful months behind in mortgage payments, and the lender is calling you nonstop every day.
Most people in the situation think selling their home is the best and only solution. It seems everyone knows a realtor and of course they turn to that person for help. After a review by you’re friend you are told the bad news. You’re home won’t sell for enough to pay all pay off the balance of the loan, the fees, and of course the real estate commissions. Many people still try to sell their home but eventually they accept the fact that foreclosure is inevitable.
Many lenders have an abundance of home that have been repossessed and are willing to settle debts owed by homeowners through a process known as a “Short Sale.” Simply put, a “Short Sale” occurs when a homeowner is upside down on their home loan. Unless they find a really giving investor the property will end up selling for less than what is owed on the mortgage loan.
In most cases a short sale would benefit a lender more than a foreclosure would. A short sale is a done deal. Money is received and a write off is taken. End of problem. With a foreclosure the lender takes the house back and then has to dispose of it in order to mitigate his losses. If the house does not sell for months he carries the negative on the books. Additionally, there can be cost added to the ultimate sale that further reduce the loss recovery.
In a successfully negotiated Short Sale the lender agrees to accept the lesser amount consider the loan as paid in full. Of course the homeowner will receive nothing from the sale of their home but that’s no surprise. The good part is that no foreclosure is reported against your credit. Be warned, if the short sale was not done carefully and correctly the homeowner will still owe the difference between what was owed and what was received.
To qualify for a “Short Sale”, the homeowners must be able to demonstrate to the lender a real hardship and they must be financially insolvent. With your recent payment history it should be easy to demonstrate that you are unable to make your house payments. This is important. Otherwise there would be no reason for the short sale.
You will need a signed and accepted offer for your house. Finding a buyer is not as hard as it seems given the fact that this is a short sale and the house is probably going for a lot less than market value. A lenders will not even look at you’re short sale package unless you have that offer.
Should I hire a Lawyer to do a short sale?
Successfully negotiating a Short Sale is a difficult process. DO not consider doing a short sale yourself. You will need someone that is an expert in short sales. You’re brother-in-law that read about short sales is not qualified. The short sale process will be a combination of negotiating with loan loss mitigation personnel and processing and submitting a ton of paperwork.
Lenders require a lot of documents and information. Giving the lender too much information or to many of the wrong documents can completely destroy you’re attempt. Additionally, the lender will want financial information about you the homeowner. You will need to demonstrate to the bank that you are insolvent. You need to give the lender precisely what they want but you cannot lie about your financial condition. You will need to present bank statements and tax returns that need to support your statements.
You’re precarious position is that you need to demonstrate that you are now insolvent but at the time of your loan application you were not, this could be considered mortgage fraud in some cases.
Are there tax implications with a Short Sale?
With a short sale the lender has money that was not covered in the sale. If that money was “written off” you can be sure that they will either seek a judgment against you or report the write-off to the IRS as 1099 income to homeowner. Normally the amount of the 1099 will increase your yearly income and ultimately the amount of taxes due for that year. The judgment will appear on your credit for 10 years.
Truthful Conclusion
A short sale is not a cure all. If you’ve reached the point of foreclosure, contact your lender and ask for information on short sales. Put your request in writing. At this point a short sale will probably leave you better off than foreclosure and possible bankruptcy.
