How to Buy Foreclosures in the 2009 Market

Home Equity Loans - The 3 Deadly Sins of Bad Lenders
 by: Ron Treveli

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You’ve heard of ‘The 7 Deadly Sins’, well here’s a bit of a spin, but the consequences can be severe if you don’t take these into consideration, or keep your eyes open for lenders who could possibly be doing this.

Now, there are other more varied approaches that lenders can take, but I’d like to make you aware of the 3 more common ones.

1. When NOT To Sign Over Your Deed

Ok, here’s the situation, you’re having trouble paying your monthly payments with your current lender. They’ve stepped up the game and have gone as far as to threaten foreclosure on your home.

Worried, and not sure what to do, another lender approaches you, and offers to help you out by refinancing and helping you out in your ‘predicament’. But, because he can help you, he say’s as part of the formality, he needs you to assign your deed over to him, saying something like it will mean that your current lender will not be able to foreclose.

DO NOT DO THIS! Once the lender has your deed, the financing will likely not come through, and you’ll be left in a home you no longer own. The lender can then almost do whatever he wants, and will treat you as a tenant, not as an owner.

2. When NOT To Draw Down On Your Equity

You’re in need of some money… maybe you’ve hit some medical bills that weren’t expected. You’ve successfully built up a considerable amount of equity in your home over the years, and think that you’d like to use that.

A lender approaches you, and says they can do it, but even though you won’t be able to afford the higher monthly payments, they tell you to ‘just bump up your income a little’ to make it get through, then worry about it after.

The problem with this is that you’ll likely lose your home. I’m not kidding, lenders like this don’t care if you can’t make the monthly payments, if you default, then they’ll just take your home and sell it and pocket the difference. Stay CLEAR of these people.

3. The Hidden Balloon Payment Clause

If you’re pressed for payments, and want to refinance, make sure you read the fine print of the contract. A lender might come to you and say that they can reduce your monthly payments and save you from foreclosure. That might be well and good, but in the fine print, you might find something that says that the balance of the principal amount is due at the END of the loan in one lump some payment.

If this is the case, be VERY careful, and don’t do this, you’ll likely face foreclosure anyway at the end of that loan.

I hope that this guide has been helpful for you, and opened your eyes to some possibilities that are out there.

About The Author

Ron Treveli

Thanks for taking the time to read this article. For more quality articles by Ron Treveli on Home Equity Loans be sure to visit www.home-equity-loan-guides.com where i’m constantly adding more content specifically on home equity loans.

This article was posted on September 27, 2005

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Posted under Foreclosures

It’s happened to almost everyone at one time or another. Unexpected expenses come up and there’s no paycheck left after paying all the regular bills. The answer for many is to obtain a signature or unsecured personal loan. These types of loans are used by many people but especially those with a bad credit history.

Bad credit is something that can be just overspending on your part. This is the typical attitude of many who see people in a tough financial situation. There are many more however where through no fault of their own, there’s been a financial set back like a job loss. Or a child needs to go to the hospital and we all know that insurance, even when it is available doesn’t cover near enough of the cost. Or how about the unexpected bills that show up when we least expect it. These are inconveniences for some but many people especially at the lower income ranges simply don’t have the money cushion available to get through emergencies.

Back to the bad credit loans. Those payday type lending companies charge a heck of a lot of interest. Don’t be fooled into thinking that you can afford the monthly payment. This is a common tactic to get you to agree to making those payments. What they don’t explain well however, is that a large proportion of that payment is actually going to interest.

While these loans of last resort may seem like a quick way out of your money problems, they are more likely a trap to keep you in debt longer to those companies. Consider all other options before getting a bad credit loan.

Here are a few ideas:

1. Sell property. If you have things you’ve bought that you don’t need any longer, sell them. Use EBay or a garage sale but get rid of the accumulation of stuff.

2. Work a part time job. Not my favorite but a part time pizza delivery job will get you out of debt much faster than a typical bad credit loan. And remember this possibility is just temporary until you get back on your financial feet.

3. Work out different payment options with your creditors. Mortgage companies do not want to foreclose on your home, and banks don’t want to repossess your car. Bottom line is they want their money and interest. They would much prefer that you contact them directly and work out a payment plan based on your current situation then having you later quit making all payments. Contact your credit card companies and do the same. These people will also work with you. Remember however, that once you agree to something, it’s important that you keep your word and deliver on those promises. This means don’t promise anything you can’t do.

Is your usually payment 100 dollars but you can only afford 50 and you’re behind a couple of months? You should actually call the creditor first instead of having them make the first contact. Still, once on the phone, don’t promise to catch up and make full payments if you cannot afford to do so. It destroys your credibility. Being behind makes you someone with a problem. Promising and not delivering makes you a liar.

There are other strategies that although uncomfortable can be used instead of a bad credit loan. Exhaust all possible options before committing to a loan from a lender of last resort.

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Posted under Foreclosures

A Couple Of Seniors Do A Forecloseure Rehab

Let the fun begin

My wife, Jeanne, and I had done 2 deals before this one. The first was a “flip” which we sold in 19 days using a back-to-back closing and we used a short ad: “Handyman Special, cheap, cash, phone number”. We got over 80 calls.

 

The second was a pretty house that only needed minor fixing…we sold it after listing “FSBO” for a month or so after completion.

After two great successes, we were mailing our letters to out-of-state owners and to pre-foreclosures (Lis Pendens). We got a response from an owner was about to go into foreclosure with a private lender.

The Deal of Deals…$20,000.00 in repairs! A long story short, we finally talked to his ‘private’ lender and he indicated that he was through waiting…he was going to foreclose. He also indicated that he would not discount the note. That left us with the decision of walking away or continuing. We decided to give the owner $5,000.00 walking money, and to assume his note with the private lender. We figured it would take $15,000.00 to $20,000.00 to make the house fit for human habitation.

The Gopher factor:
Next we had to find someone who could do the work for us since neither of us are now capable of this undertaking. Luckily we had a friend who wanted to do the work for half the net and we shook hands (don’t make this mistake; sign a contract that spells out all the requirements of each). After a few days of rehab, Jeanne tripped over some debris in the driveway and broke a bone in her foot and another in her wrist. She was fitted with casts and we continued. About 7 weeks later our friend had accomplished a huge task. Jeanne and I acted as gophers and we worked the sales at Lowes and Home Depot to get some good savings.

The Hot Market and Exit Stategy # 2!
After trying for weeks to sell the place (five open houses and no visitors of importance), Jeanne and I decided we should try to lease or option the property. But, we now had partners and we had to see if we could buy them out. As it turned out, they were willing to part company for a nominal amount.

From naive senior citizens to landlords, it’s been a trip. Other than Jeanne’s breaking bones our trail hasn’t been too rocky. If we can do it, some of you youngsters can surely do so!

Submitted by:
Lew Higgins & Jeanne Nelson (semi-retirees)
Realty investing LLC
Clearwater, FL 33763

By: SpudStud

Article Directory: http://www.articledashboard.com

www.propertiesbyjeanne.com

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Posted under Foreclosures

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Posted under Foreclosures