Learn how to prevent foreclosures

Foreclosure can bring you endless woes. Apart from getting you evicted from your home, it can bring down your credit score drastically. Worse, this gets reflected in your credit report for years to come. As a result it becomes impossible to get loans for any of your future ventures. When foreclosure stares you at the face, you need to go the whole hog to avert it. All it takes to avoid foreclosures is awareness and determination.

Your money lender is the best person to help you out of such a crisis. It makes lot of sense to confide to him. No sooner than you smell a crisis, get in touch with the lender to know how you can bail yourself out. As the money lender has dealt with such situations in the past, he can tell you what measures need to take. On the contrary if you start ignoring the lender’s letters, you push yourself further down into trouble. Avoiding the lender strictly means inviting foreclosures.

Another way out to avoid foreclosures is to file bankruptcy. Under bankruptcy law, action won’t be initiated against you unless you become solvent. For that you need to have a good past credit record. Availing federal loans or federal accreditation is also a good option. Federal accreditation will ensure that you get loans despite your present situation. Other available options to prevent foreclosures include reinstatement, forbearance, short sale, deed in lieu of foreclosure etc.

The best way to avoid foreclosure is to avoid delay. Acting fast can steer you out of a crisis soon. 

How to sell your house?

Selling your house can be a good deal only if you sell it the right way. Most people end up losing because they do not know how to go about. Chalking out an elaborate plan before you put your house on sale can help you get a lot more than what your house is worth. .  

What do you need to do before you put up the sale notice?

First try to find out the value of your property in the open market. Enter your zip code in a value estimator site or a real estate site to get a clear idea. Always hold the value of your house higher than what a site says as property appraisers always value a house below its actual market value.  An idea of the value can let you know how much to expect.

Look out for an opportune moment. As market dynamics keep changing the demand for a house will keep rising or falling. Wait for the demand to rise. And for this you need to bide your time. When the demand rises you can command a higher price than you can even expect.

Do not take the help of brokers. They will invariably push the price down for some non existent reasons.  Most brokers have a tacit understanding with real estate developers. So inviting brokers is like shooting yourself in the foot.

Last but not the least spruce up your house before putting it to sale: Presentation matters a lot in real estate sales. Real estate agents make a fortune out of selling a spruced up decrepit house.

Selling your house to a plan can spare you many a pangs later

Short Sale Expert

Foreclosure is the last thing that any house owner would want. However, land lords are forced to go into it when all other means of paying mortgage loans gets exhausted. In an extreme scenario many property owners consider the option of short sale. Though this is a good alternative to foreclosure, the process entails lot of risk. Before you enter into a short sale you need to seek the advice of short sale experts.

Short sale involves selling the house at a cost that is lower than the debt owed. When executed successfully, it helps both parties find a middle ground settlement. A short sale expert can provide perfect legal aid to both parties to reach an amicable settlement.

Short sale specialists can skillfully solve situations that may crop up during your short sale negotiations. For instance, a situation may arise when the lender and buyer may disagree on the price. This is precisely when a legal expert can be handy. He can broker a truce between the two parties and bail you out safely. Every difference is ironed out smoothly and chances of an error get reduced drastically. Also the expert can suggest you several valuable options.

Delegating the task of short sale to an expert can buy you peace of mind. 

Consult a short sale specialist to short sale your house

If you are unable to keep up with your home mortgage payments, you may have to face foreclosure proceedings. Nothing can be more painful and embarrassing than to have your home foreclosed. It destroys credit completely and makes it extremely difficult to get back on your feet. The best way to avoid any such possibility is by opting for short sale.

When a lender agrees to do a short sell, he agrees to accept an amount that is less than the amount due. This is primarily why lenders do not agree to do a short sale. Instead if they go for a foreclosure, they would be able to recover their money completely. Needless to say, convincing a lender to do a short sale can turn out to be an insurmountable hurdle. Also, not all properties and sellers qualify for short sales.

To know more about short sales you can consult a short sale specialist. A short sale specialist is a person designated by the National Association of Realtors to help distressed house owners see through a short sale process. They provide free of cost advice to house owners and liaison on behalf of them with lenders. A short sale specialist ensures that the entire process of short sale is carried out within legal parameters.

It is also important for a house owner to consult an attorney. This is because lenders who accept a short sale often pursue a borrower legally for the amount not settled. An attorney can insulate you from such malpractices. Also, a lawyer can help you determine whether your loan qualifies for a claim or a deficiency judgment.

Foreclosure process

The process of foreclosure is a long and elaborate one.  So, it has been noticed that most financial institutions are taking more time to foreclose on home owners who have defaulted. Today the average time taken to carry out foreclosures in America is around two years.

One primary reason for the delay in the foreclosure process is because the number of cases has increased by leaps and bounds. On the one hand the foreclosure involves a lengthy review process and on the other it also has to face several legal hurdles.

Another important reason for the long process is the government protection that defaulters enjoy. Bill has been passed in the congress that allows property owners who have defaulted to stay in their homes for longer.

In the coming days foreclosure process will become longer. Presently defaulters can stay in their homes for an average of about 20 months before facing eviction. Analysts now believe that the average period of stay would slowly increase to 22 to 23 months.

Many attorneys say that evicting a defaulter soon is like being very unfair to the defaulter. Every defaulter has the right to retrieve his position and the government should give them a long rope. This is bound to make foreclosure process a bit long drawn one. 

Short Sale

A short sale is an agreement by which a lender agrees to accept an amount that is less than the outstanding towards mortgage payment. Many house owners find short sale an attractive option against foreclosures. Though this provides an easy way out for many, what most people are unaware is the IRS aspect of the story. Short sale is taxable and you also owe revenues to the federal state.

When a lender agrees to short sale credit he agrees to forego part of your debt. The IRS views forgiven debt as an earning and so levy taxes on it. Banks and other private lenders do not refer about taxes on short sale credit negotiations. So, not many people know about the implications of short sale. The best way out is to talk to a short sale attorney.

The waived off debt in a short sale is exempted from taxes for up to $2 million under the Mortgage Debt Relief Act. This law applies to those seeking a short sale on their main residences. Also, it comes into effect only when the debt is forgiven due to the homeowner's insolvency or due to a fall in the property value.

A short sale is not considered an income if the outstanding amount is forgiven due to bankruptcy. In the same way farm based short sale credits are not taxable. This again is applicable if the farm has provided a person with more than 50% of the total earning for three successive years.

Seeking short sale makes perfect sense only if you are eligible for tax exemptions. If not, you need to be ready to give the tax man his cut.

Seek a short sale specialist for a Short Sale

When a property owner is in a financial mess and is no more in a position to clear his mortgage loan, he can opt for a short sale. When a lender allows a short sale he has to accept less money than that is due from the borrower. A lender agrees to this only when he is convinced that the owner is in dire financial straits. Short sale specialists facilitate the process of short sale. They are usually certified short sale agents and are designated by the National Association of Realtors.

A short sale is a constantly evolving process. Banks change rules every now and then to meet the requirements of the market. Likewise states amend legal provisions to plug loopholes or even safeguard property owners. A short sale specialist would be aware of all these changes as and when they take place. So, they can guide property owners the right way.

There is no dearth of Short Sale Specialists in the market. However, many masquerade as specialists. Such people can lead property owners down the wrong aisle. They neither have the expertise nor the experience to deal with such complex real estate process. So, it is always safe to verify the authenticity of a short sale specialist.

As short sale is a better option than foreclosure, it is always safe for a defaulter to opt for short sale. Short sale specialists can make sure that the process is completed according to the laid out rules.

Short Sale Process

If you wish to turn "no equity" deals into big profits you always have the option to take recourse to short sale process. This is a process of settling debts in which the debtor negotiates with the corresponding bank or the lender to agree for less than what the home owner owes.

Why do banks short sale?

Short sale takes place only if the bank or the money lender agrees to it.  Banks do not agree to short sale just if an owner files for one. Banks would first see whether the mortgage property is facing foreclosure or not. This is primarily determined by the owners financial condition – whether he is in a position to continue with his payments or not. Other factors that influence the banks decision include: depreciation of house value in the locality, poor condition of the house, or when the banks stock takes beating over defaulting loans.

What are the steps to a successful short sale?

The property owner must be in a state of financial distress

Short sale may be the only option available to clear off the loan

After initial consultations and an agreement over the sale amount, the homeowner needs to sign an authorization form.

The loss mitigation department of the bank must be intimated with a letter stating your inability to clear off your debts and enclosing a copy of the sales contract.

Keep ready the list and cost of repairs, and needs to be forwarded to the mitigation department.

When you are in financial difficulty, short sale process is the best way to settle your debts.

Foreclosure

Foreclosure info at http://stopforeclosure-info.blogspot.com/

Foreclosure Help

To ease the problem of foreclosures the American government had introduced a new plan known as American Homeowner Resurgence Plan . Following the new bill a $300 billion authority had been created for refinancing mortgages into FHA. But this did not inspire lenders to write down mortgages. So, the problem of foreclosures remained where it was.

The bill aimed to reduce foreclosures that would, in turn, resolve uncertainties related to mortgage values as well as mortgage-backed securities. In the process the current credit crunch would be mitigated and also bring down the downward pressure on home prices. And most importantly it would reduce the incidence of evicting people from their homes.

The bill had its fall outs. The tax payers had to bear the cost of the bill. At the same time it seemed to reward reckless lenders and borrowers. The only apparent benefit was to reduce foreclosures and so those favoring the bill argued that it is in the interest of the economy.  

The Mexican "Punto Final" plan of 1999 had a modest approach to deal with the problem and many argue that the government should follow this model. The Punto Plan resulted led to considerable debt write-downs very quickly. According to the Punto Plan the government would, on a proportional basis, bear the losses borne by lenders from mortgage principal write-downs. For example, tax payers would share 20% of the lender’s write-down cost if there is an agreement for voluntary renegotiation between borrowers and lenders. The agreement between the two parties should be such that borrowers are able to qualify for refinancing under the FHA facility.

This Punto plan would cost the government only about $10 billion. On the other hand it would in no way provide benefit to reckless borrowers.  This proposal can help avoid foreclosure without causing to much of a strain on the tax payer.. 

Seek foreclosure help to save your home

If your house is facing an imminent foreclosure, you need to go the whole hog to prevent it. You can get help from many quarters. But the best person to help you can be your your money lender himself. As a stake holder in your property, getting him into the loop can always do you a world of good. Talking to him can stave off the foreclosure proceedings indefinitely. Also, your mortgage lender can help you re-work a payment plan. The new plan can be worked out as per your needs. .Thus with an eased out mode of payment you can deal with your financial crisis more effectively. 

If the mortgage lender is unwilling to co-operate, you can seek foreclosure help from a mortgage attorney. Depending on the merit of your case, an attorney can tell you how to stall the proceedings. You can also call the Mortgage Foreclosure Assistance Hotline. Availing this service can help you get answers to many of your unanswered questions. You can also seek written materials about foreclosure process from them. Often the cue provided by the hotline service can help you find ways out.

You can also consult a HUD-approved housing counselor. These counselors’s provide free advice on whether or not you are eligible for HUD programs. Also different states have different provisions to bail out property owners facing foreclosures. 

There are instances where mortgage lenders have misled or entrapped borrowers. If you think you are a victim, you can approach the Attorney General’s Office. 

Foreclosure help is there for the asking. Seeking it can help you save your home. 

Avoid Foreclosure

Many people try to avoid bank foreclosures by withdrawing money out of IRA. But this move can be equally risky as a foreclosure. A better and smarter way out is to procure a loan from your retirement account.

You can always apply for loan from your retirement account under section 401k. Unlike withdrawing money from retirement funds that will invite taxes, a loan from 401k is not taxable. Moreover, it avoids the 10 percent early withdrawal penalty that is usually levied on amounts withdrawn from retirement funds.

Taking a loan from your employer’s 401k plan is an alternative, but there is a catch to it. If you happen to quit the job, you are no longer entitled to borrow from the plan. Under new tax laws, you can star your own 401k plan under self employed 401k. It is very easy to start your own plan. Additionally, you can get your IRA and SEP plans transferred to your self employed 401k plan. If you have a self employed 401K plan, you can borrow up to half of your account balance. If you are a business man, part time or full time, you can set up a self employed 401k retirement plan. It is the equivalent of the plans enjoyed by employees of large companies. As this plan is designed for an individual it involves less process work and is less expensive to run.

Usually to maintain a 401k plan an individual has to shell out less than $200 a year. Under this plan you can avail loans with terms of 5 years or more. The best part of the loan is that all your payments towards principal and interest return to your retirement account. However, defaulting on your 401k loan payment will lead to IRS taxation.

The best way to avoid foreclosures is to avail 401k loans.

Avoid Foreclosure

Avoid Foreclosure

Failure to make mortgage payments can increase the chance of facing a foreclosure. When you buy a house you need to prepare yourself for all such eventualities. If you gear yourself up along the following lines, chances of facing a mortgage crisis leading to a foreclosure can be avoided.

Don’t ignore the problem. 

It is wrong to stave off a mortgage problem. In fact, the sooner you act, the sooner you can find a solution. Always take your lender into confidence. Where most people go wrong is in not confiding to the lender. Informing the lender early helps in nipping the crisis in the bud. The lenders money is at stake and so by bailing you out he can save himself many a trouble. 

Prioritize your spending. 

Once you have an outstanding loan, it makes complete sense to prioritize your spending. This would help you do away with unwarranted expenditure. The money you save should go towards creating an emergency fund. You can fall back on this fund when the need arises. To begin with, keep a track of all your expenses. 

Know your rights.  

After you buy a house educate yourself on your states foreclosure laws. This would keep you on the safe side. Questions that you need to know is when such situations can arise, how long will foreclosure take in your state and can the lender, chase you for the balance after the foreclosure.

Know how to modify your loan:  

A loan modification can help you adjust the terms of your loan. Get all these aspects cleared before you seek loan for purchasing a house.  Once you know whether you can directly modify the loan with the lender or need to qualify under federal programs you can chalk a way out to deal with a crisis.

All these aspects are crucial to avoiding foreclosure.

Real Estate foreclosures

When it comes to buying a foreclosure, the moot question is how safe is it to do so? Experts believe, if title insurance is available on a previously foreclosed house, it is always safe to buy a foreclosed house. Title insurance ensures that even if the house was wrongly repossessed, the previous owner will never be able to seize it or lay a claim over it. If the previous owners claim is legally tenable he would get some monetary compensation. This means the new owner would have all rights over the new house.

Buying a bank seized foreclosed property is always safer than buying houses from foreclosed auctions. Such houses are also known as REO or real-estate owned by a bank. REO properties are also sold by real-estate agents.

One disadvantage with buying REO houses is that most of them happen to be in worn out shape. These houses are sold long after they are foreclosed and are more often than not in a bad shape. Nowadays most real estate foreclosed properties are grabbed by investors. They buy the properties upfront, spruce it up and sell them.

Title insurance on real estate foreclosed property protects a new buyer from unforeseen document related defects like forged signatures, improper documentation, unknown liens etc.

Like title insurance, it is also very important to seek the advice of an attorney before buying a foreclosed property. A real estate attorney specializing in foreclosures can be of considerable help.

It is safe to buy a foreclosed property as long as you are protected by a title insurance policy.