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.