Thursday, June 28, 2007

Before you go any further...

My recommendation is to find a Realtor to help you through this process. The Realtor should be experienced in pre-foreclosure as well as knowing your rights as the homeowner. I am a Realtor and I am very experienced in the rights of homeowners. I have been trained by attorneys in Real Estate to best represent your interests in negotiation with the lender. I have also been on both sides of the fence so I believe I know what you are going through. There are other Realtors that provide excellent resources and service. Please check out whomever you use to be sure they will represent you the way you deserve to be represented.

Click my name below to look me up in the Colorado Real Estate Commission:

Brian L. Thomas

The articles below outline just some of the options and solutions surrounding foreclosure. You situation is probably unique to you. Get help; you don't have to do this alone.

Tuesday, June 26, 2007

Various Ways of Stopping Foreclosure

This article would let you choose and implement the method to get you out of the foreclosure problem by either stopping it and living in your house or by getting out of the foreclosure problem while still retaining your financial stability. A number of options are available to choose from in the pursuit to escape the hard times.

Start saving as soon as possible once the problem that caused the instability is solved. Bring your mortgage current as soon as possible by paying all fees due to missed payments, interests, and various fees like that of attorney. Failure to bring the motgage current soon would see the amount owed increasing once the lender hires a lawyer. The lawyer can discover thousands in extra payments to be made.

Restructure the payment plan with the lender such that you can pay a part of due payment now and the rest can be paid over a specified period of time while you still continue paying the monthly installment. The loss mitigation department of the lender reworks the plan generally and the borrower might have to pay anything up to double the original mortgage per month. Such payment would help catch up with the missed payments in the same months as those due until the mortgage is current.

The mortgage or loan can be modified in discussion with the lender such that the missed payments can be adjusted to be distributed over the remaining loan life or can be considered at the loan's back end. This is difficult, as most lenders cannot modify it as they do not own the loan but are just collecting the money and servicing loans.

Look for a source for refinancing foreclosure loans. But apply for the same only if you have high income and large equity as the interest rates for such loans can be over 10%. The new lender -traditional or hard money one would charge high monthly payments and might be difficult to meet but ensures the homeowner starts afresh.

Partial claim: Applicable for those homeowners who have FHA loan. They should contact FHA for a one-time loan to catch back up on mortgage payments. The loan lives as a lien and if the property is sold or refinanced, the amount needs to be paid back to the FHA.

Bankruptcy declaration can ensure stopping foreclosure but even being bankruptcy is an expensive practice due to the costs involved of attorney, trustee, court, etc. This is a viable option for those who want to retain their house desperately and can afford some disposable income for the bankruptcy procedure.

If you owe more than your property's worth. short sales are worth consideration. Short sale frees you from the loan though the bank gets less than what you owed to the bank. In this practice, they are compensating the balance due amount themselves and lets you free.

You can choose to improve your credit by selling the house yourself or by hiring a broker. Find a willing buyer, vacate the house, stop foreclosure and if all goes well, buy a new affordable house in a few years.

On failure to find a valid solution from among the previously listed methods, the bank can be offered a deed instead of the foreclosure. According to the deed, to avoid eviction process, the owner offers the property by himself to the bank. The bank will accept the deed in lieu of the loan and may not ask for more money from the debtor as they are accepting the deed according to their satisfaction.

Last resort, forget you ever had any property. Walk out of the house and be prepared to put up with the hardship instead of running around to lenders and banks for loans. But if you can, try any of the above mentioned methods, nothing is better than holding on to your property.

Gus Taperman holds a Bachelor's degree in Commerce and completed his master's in Business Administration . He is working as writer and financial consultant

Avoid Foreclosure by Refinancing Your Mortgage

You are young, have a good job, work hard, raise a mortgage and buy a home, which is possibly the biggest single investment that you will ever make. That's fine, the children are young, the job pays well, the mortgage repayments remain stable and you and your family are quite comfortable.

Several years pass by, and for one reason or another, the mortgage repayments become a burden. There are a number of factors that contribute to this situation, your family is growing, inflation rates are increasing, the value of the dollar is decreasing, property values in your area are rising, along with council rates and also interest rates have escalated.

Unfortunately, any wage increases that you may have had, have not kept pace with your continually increasing household expenses. Without the aid of an unforeseen windfall, this means a drastic lifestyle change with the possibility of a foreclosure.

The alternative, of course, is to refinance your mortgage which will substantially lower your mortgage repayments, allow you to maintain your standard of living and secure your initial investment.

When refinancing your home mortgage there are several pitfalls to be avoided.

Be mindful of the fact that you will be doing business with this mortgage company or brokerage for many years so you will need to choose wisely. Make sure that you are dealing with a well known company and engage the services of a reputable financial adviser who will inform you of any terms or conditions, written into the refinancing company's agreement, that may not be in your best interest.

An independent financial advisor will have a large number of money lending institutions from which to choose, and therefore, should be able to provide you with an acceptable refinancing plan.

There are many types of refinancing loans including, complete term loans, overdraft loans or loans with a redraw facility. Things to watch out for are the penalty clauses, the interest rate structure and the companies terms and services agreement.

Are there any penalties for early settlement? Make sure that the loan company is not enforcing exorbitant penalties for early settlement.

Are the interest rates fixed, if so, for how long? Make sure that the loan company does not have an interest rate hike built into the agreement after the first year.

A loan that has fixed interest rates could result in a great saving by reducing the amount of interest you will have to pay over the term of the loan. On the other hand, a fixed interest loan agreement will incur a higher monthly premium. A flexible interest rate is somewhat cheaper in the short term, but your premiums will increase accordingly with any increase in interest rates. It is therefore advisable to have your initial interest rate fixed for the first three years of the loan.

Seek advice from reliable sources. A reputable mortgage broker will professionally guide you through the steps that you need to take to refinance your mortgage, which will save your home from foreclosure, retain your lifestyle and possibly, save your marriage.

Foreclosure May Not Be Your Only Option

I get it. I have been there. You are dangerously behind in your mortgage payments and you can’t seem to catch up. You’re getting the letters and phone calls that lead you to believe that you have no other option. Foreclosure seems eminent. That’s not necessarily the case.

The mortgage company doesn’t want to own your home anymore than you want to lose it. In the current Real Estate market, (definitely here in the Denver Colorado area) it seems that this scenario is more common than believable. The home prices dropped; an A.R.M. (adjustable rate mortgage) adjusts to a higher rate; the new payment is now unaffordable; refinancing is out of the question because of credit status changes; the owner finds that they owe more than they can realistically sell it for. What now? Walk away? Not a good idea. Without filing bankruptcy, the bank can still come after what is owed to them; even after they take AND sell the property. (and it’ll be a lot higher because of the cost of foreclosing on the property)

There are other ways. One of these ways is called a “short-sale”; it is a way for the bank and/or mortgage company to come to a feasible solution with you. A short-sale is where the mortgage company agrees to take a certain percentage of the money that you owe and give you a letter releasing you from the remainder of the debt. The short-sale could still affect your credit, but by now your credit could already be trashed due to the situation.

Most of the time the bank won’t even discuss a short-sale with you until you are behind in your payments (3 months in some cases) I have seen the banks discuss short-sale prior to default, but it was only in very specific situations.

Please understand, it is not an easy road to go with a short-sale. There is quite a bit of documentation and negotiation, but it is much easier than the alternative. You probably won’t find out how much the bank will accept until you get an offer from a qualified buyer. It is best to find a Realtor that has experience in pre-foreclosure and short-sale. The Realtor can help guide you and in some cases help you to negotiate with the bank to make sure things go smoothly. The Realtor will know the language being spoken by the bank, can help you to put together the documentation and help you to understand the process.

So, the first steps aside from finding a qualified real estate agent; call your mortgage company, (don’t avoid them, they won’t go away), find out their process for short sale (the Realtor will help), get the house on the market, price it fairly according to the agents recommendations, keep the home in top quality condition (it will sell faster and possibly at a higher price). Once the offer comes in, be prepared to wait. The mortgage companies are dealing with hundreds; even thousands of short sales and foreclosures. They will get to yours, it may just take a little time (let your agent call and check on it), the buyers also have to be prepared to wait; your agent will make sure everyone knows the situation (within the terms of your agreement with the agent)

Don’t give up hope! It may take a couple of years to bring your credit score up; but compared to foreclosure, judgments, collections, bankruptcy and possibly attorneys, it will be much better for you in the long run. Hang in there! Find a good Realtor to help.

Foreclosure doesn't need to happen to you!

This is a space for me to help people find alternatives to foreclosure. I am a Real Estate Broker in South Metro Denver, Colorado, however, I will do my best to provide information to anyone who wants it.

I have been foreclosed on in the past; prior to my career in Real Estate and before I knew that there were other options. It didn't need to happen to me and it doesn't need to happen to you!