The Reality of Foreclosures - From a Clean-Up Crew

Purchasing Foreclosed Properties

In a time when job loss is on the rise, the stock market is down, credit is not flowing and the national debt seems to be spinning out of control it is good to have something to fall back on. Whether it be another trade, a nest egg, or the knowledge to move into something that could bring you that nest egg. Now is a good time to look into How to Buy Foreclosures. If only to give you peace of mind in this tumultuous economy, this vital information could get you through the economic crisis of 2009. Buying foreclosures can be tricky because there is not just one way to do it. The most common way in which to buy foreclosures is to simply do Internet search on foreclosed houses. There are other ways to go about purchasing foreclosed properties such as going to bank auctions. Most financial institutions keep a public log of foreclosed properties, because it is in the institutions best interest to sell the property as quickly as possible.  Because banks, or credit unions are not in the real estate business, and ARE in the money making business, the institutions are typically more than willing to work with indivudial private parties. Depending on the individuals person financial situation, banks are also often willing to work with them to avoid foreclosure. If there is a high debt to equity ratio, institutions are typically more willing to work with the home owner. However, if the reverse is true, there is greater possibility of foreclosure, and the possibility that the institution will auction the house off at a cost that will simply offset the cost of their loss.  Again, banks are not real estate agents, and are not in the market to make money off of the sale of houses. They simply want to recoup most, or all of the loss that they incurred of off the mortgage that went bad.  That being said, there are thousands of opportunities for anyone wanting to invest in the real estate market to purchase a foreclosed property, and in turn, sell that property for a profit.

How Foreclosures Today Can Benefit You

We are living in a very scary time in the United States. Our economy is on shaky ground and everyone is wondering how we are going to make it out of this. Hundreds of thousands have lost their jobs and are wondering what to do now. There are a few bright spots in this dwindling economy. We all know that the housing market is not in great shape which means that foreclosures are on the rise. This is one of the areas that you can take advantage of. Our current housing mess can be a benefit to you in several ways if you read up on How to Buy Foreclosures. One of the ways is to buy property in pre-foreclosure. As previously stated, there are several ways to go about buying foreclosures and not all include going to auctions. Some of these can even help the homeowner themselves by buying their house in pre-foreclosure. This is done so that the home doesn’t actually ever go into full foreclosure, but the bank is willing to sell the house for sometimes half the loan amount or sometimes, even less. This is called a "Short Sale." Right now banks are more willing to do short sales because they would rather get something than nothing out of the property. If the house happens to go to auction, they are likely to get less than they would even through a short sale. Another major benefit to doing this in this shaky economy, is that it allows the homeowner the ability to get out of having their house in foreclosure. This saves a big hit to their credit and will allow them to continue to be a more functioning asset to our society. The more people we close off from accessing credit and reduce how much they put into our economy, the more we as a whole national economy will feel it. A short sale does ping your credit, so it will show on a report but does not have near the effect that a foreclosure would. Here is my affiliate link $100 coupon to first 20 customers The benefits to buying foreclosures reach farther than even your own circumstances. If you know how to go about it in a smart and educated way, then you can reap the benefits in a very great way. It may not be something that gets you rich quick but if you are dedicated and do your research then you will see results.

Posted under Foreclosures

Foreclosure Homes - One Way To Buy Them

You have heard about the great deals to be had on foreclosure homes. There may be some truth to the stories, as you will see in this article.

Yes, sometimes you can buy foreclosure homes cheap. But there is a lot of competition in this area, and fewer great deals than “get rich” promoters say.

Some investors have moral qualms about investing in foreclosures. I can’t see what the problem is if you are buying them either at the foreclosure sale, or from the bank afterwards. (Buying before the home is foreclose on, or “pre-foreclosure,” is a whole other matter - and it is best covered as a separate topic). As I once heard a man explain to his son while I repossessed the family car, “If you can’t pay for it, you don’t get to keep it.”

Buying at a foreclosure sale can get complicated if you don’t have the cash to pay for the purchase. You will have to arrange beforehand for financing, and a pre-qualification letter from the bank won’t be enough. Find out exactly what you need before you go to the sale - you may need a certified check from the bank. You don’t want to lose your deposit because you can’t close the purchase fast enough, or your credit line is a little short.

Will you get a great deal? Maybe. The whole area has become more competitive, so don’t count on getting houses at a 25% discount. Also be sure you are clear on what the law says. In some states, the owner may have the right to get the property back if she can come up with the money within a certain amount of time. That means you may not get to keep it, and it also means you may have to wait to resell it.

Buy After The Foreclosure

My personal preference is to wait until all the legal stuff is past, and then buy the foreclosure property from the bank. Banks and finance companies don’t want to own real estate, so they will often sell for less than market value to get rid of property fast. Sometimes they will even sell for less than what is owed on the property. The way they see it is that they are spending money on the home and losing out on potential investments every day their money is tied up in that property.

This is how we bought a home in Montana in 2002. The bank had been holding it for six months or more after foreclosing on the mortgage and taking the house, and they were ready to sell. I believe they sold it to us for less than what was owed on it, but we didn’t ask. We just know that they accepted our offer of $17,500.

You can often find these properties listed with real estate brokers. But if you want to get the jump on the competition, start calling the banks in the area to see what they have in their REO (real estate owned) portfolios. They save the commission if they sell it themselves, so you may get a decent price. Just be aware that it is typical for the banks to sell property “as-is”.

They generally don’t want to fix anything, and may not even know what condition a house is in.

There will be a lot foreclosure homes on the bank’s books in the coming years. Mortgages are being foreclosed on at a record rate every year now. If you want to take advantage of this trend, get to know your bankers, and ask about their foreclosure homes.

Copyright Steve Gillman.

For a Free Real Estate Investing Course, and to see a photo of the home we bought for $17,500, visit: http://www.HousesUnderFiftyThousand.com

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Effects of Mortgage Foreclosure in Real Estate

Even if you are not defaulting on your mortgage, you still may be feeling the effects of other mortgage foreclosure in real estate markets. It’s estimated that multiple foreclosed homes in your neighborhood can affect a 1% drop in price, however, some neighborhoods in the states with the highest foreclosure rates have dropped significantly more than that. Is it all because of mortgage foreclosure in real estate or something more?

Additional Factors in Foreclosures

In addition to the loss for a lender, the reason most prices drop in neighborhoods is not strictly because one or two foreclosures. It’s mostly because of the perception of loss that is associated with mortgage foreclosure in real estate. Foreclosures are sometimes easy to spot as the bank with board up the house and eviction notices posted on doors. Once that happens to one owner, others may follow and that’s when it can become a neighborhood problem.

When there is a mortgage foreclosure in real estate, the owner who occupied the home often abandons the home or is evicted. Once they are gone, the mow doesn’t get cut and the house starts to deteriorate from lack of maintenance. If the house remains empty for a long period of time, it can attract squatters and vandals. The copper piping might be stripped and the house damaged, reducing it’s market value even further. Once there is more than one house that looks this way, nearby houses in the market can be seen as less desirable too - because the neighborhood has become less desirable on whole.

Effects of Mortgage Foreclosure in Real Estate for Homeowners Associations

Another, often overlooked, effect is that the homeowners are no longer around to pay homeowners dues to the homeowners association. This means that as the homeowners association fund gets drained trying to keep up with foreclosed homes, other homeowners in the association may be asked to make up the difference. This can put a strain on the entire community and eventually, if the homeowners dues get too large, they can be a source of default too.

In terms of comparable market value, most realtors will use homes in the same neighborhood to estimate the value of your home, especially if they are part of the same homeowners association group. Once there are multiple foreclosures in the area, this can begin to drag down the value of the homes within the same homeowners association group. Even with their ability to foreclose on properties that fail to pay homeowner dues, this would be considerably more expense than most homeowners associations can afford.

Jeremy Lawrence is an independent business person and Niche Marketer. See his website - to download a free report on Everything You Always Wanted to Know About Foreclosures.

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Renegotiate Your Mortgage Terms - Save Your Home?

Your lender has no inherent desire to foreclose on your home. Often you can renegotiate your mortgage terms with a lender if you are hit hard by an unexpected job loss or chronic illness. Lenders would rather keep you in your house making monthly mortgage payments than foreclose on your property.

If your mortgage due date comes and goes and you can’t make your payment because of a job loss or similar situation beyond your control, you must act quickly in order to save your home. Pick up the phone and call your lender because they can probably help protect your credit and keep you in your house. You can often renegotiate your mortgage terms in crisis situations like this with a little effort on your part.

When you ring your lender, they will probably ask you if you have a temporary loss of income or if your financial state of affairs is more critical. If you’ve lost your employment, and forthcoming payments are in peril, let them know immediately because there are some measures you can take right away to reduce or prevent the possibility of foreclosure.

What measures can be used to help you depends on the type of mortgage loan you have. If you have a conventional loan, lenders can probably examine your financial situation and work out a resolution that is beneficial to both you and the lender, in short order. If your loan is government backed or insured, government rules may preclude your lender from talking over alternate alternatives with you until you are ninety days in arrears. Regardless of the type of loan you have, you must communicate with your lender as soon as possible about your financial troubles.

Here are seven things your lender may be able to do to help you:

1) Forego late payment fees,

2) Give you a long-term period of time to get caught up on your payment: perhaps as long as one - two years,

3) Accept the receipt of a partial payment,

4) Move your present payment to the end of your loan, giving you the necessary time to get your finances back on track,

5) Accord you a separate interest-free or low interest personal loan for the sum of your missed payment,

6) Refinance or re-amortize your present loan,

7) Give you an interest or principal decrease on your present loan.

Your lender has no inherent desire to foreclose on your home; they want to keep you in your home paying your mortgage loan monthly. While they would prefer that your payment come in each month in a timely manner, you would be surprised how many lenders are empathetic to the many financial troubles borrowers sometimes have in making their mortgage payments. If your lender is made aware of the difficulties you are having they will do their best to help you out. However, it is your responsibility to inform your lender that you are having financial problems

Not all lenders can extend borrowers the seven renegotiation measures mentioned above, but your lender probably has many of these options available to help you out. Obviously, you do need to qualify for this assistance from your lender. You may be mandated to provide proof of income loss, in addition to a thorough financial statement. Don’t let pride or embarrassment keep you from making that crucial call to your lender if it can help keep you in your home.

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