How the Foreclosure Process Works
April 24, 2011 by admin
Filed under Your Best Foreclosure
How the Foreclosure Process Works
Although past articles I have written have examined numerous topics relating to foreclosures, mortgages, and real estate, one of the few topics I have not yet touched on in a less than tangential way is how the actual foreclosure process works, from beginning to end. This is a very broad topic, of course, and one that is dealt with differently in every state, but a short discussion can allow homeowners to formulate a general idea of what to expect before, during, and after a financial crisis that causes them to miss their mortgage payment. Without having a general idea how how foreclosure works, homeowners will find it very difficult to decide on which options they may qualify for to save their homes. They may waste time looking for that perfect solution that does not exist, or they may pick the wrong option to work on and lose their homes. Understanding how the foreclosure process will be conducted by the bank and the court will help them avoid either of these consequences.
In general, homeowners should begin worrying about the possibility of foreclosure as soon as they experience a financial crisis, whether it be a loss of job or serious illness or disability, or otherwise. Although homeowners who have read this blog before have been counseled numerous times that they absolutely need an emergency fund, they should not rely upon their savings lasting longer than a few months, at the most. At this point, when they are having difficulties maintaining their income, but have not yet missed a payment, it is also a good idea to contact the mortgage company and explain the situation to them, while emphasizing that it is not yet out of control. The lender may be able to lower the rate for a period of months, or allow the homeowners to miss a few payments which will be paid back after their income has recovered.
But it is once the homeowners begin missing payments without a prior agreement with the mortgage company that foreclosure becomes a serious concern. The bank understands that most families who miss a payment will quickly recover and get back on track, so they will not put a house into foreclosure if only one or two payments are missed, especially if the owners are keeping in contact to explain the situation. At a certain point, though, depending on the individual lender, they will have to begin foreclosure proceedings to sell the house at a public auction and attempt to pay off the defaulted loan. Once they decide that this is the only realistic way their loan will be paid back, they will begin the foreclosure process.
Banks do not pursue the foreclosure on their own, however; they hire local attorneys to file the paperwork with the county court and publish notices in local newspapers. The attorneys will attempt to contact the homeowners to arrange payment of the loan, either to reinstate the payments or pay if off in full. As many homeowners can not afford either option at that point, the lawyers office will sue them on behalf of the lender. Homeowners will be sent paperwork regarding this suit, and be requested to appear in court at a default hearing. If they appear, they may be allowed more time by the court to find a solution to prevent foreclosure. Unfortunately, most homeowners will avoid this hearing, thinking that they will be sued right then and sent to a debtors prison for not paying their mortgage. The lender is given the default judgment against the homeowners, and the attorneys will begin moving towards a sheriff sale.
Under most state foreclosure laws, the sheriff sale needs to be published for a period of time in newspapers or public forums located in the county. This is one reason that homeowners may first find out about the foreclosure auction from a neighbor or family member who notices the property in the paper and alerts the victims. At this point, the process is quickly proceeding to a point where there will be no options left to save the home, as the family will no longer own the property at all. Although the sheriff sale can be stopped, giving the homeowners more time to stop foreclosure entirely, if there is a realistic solution to the problem, now is the time to pursue it. The longer the homeowners wait to save their home, the less chance of success will exist.
At the sheriff sale, the property will be auctioned off at a set starting price, which varies from state to state and county to county. In a small number of cases, a third party will purchase the home at the auction. Typically, the bank purchase the property back, though, and uses its own money to pay off the loan and take possession of the property. The sale can be confirmed within a week to a few weeks after the sale, and the homeowners will no longer be listed as owners of the house, and will have no right to remain living in the property, unless state law allows for a redemption period.
A redemption period is time given to homeowners after foreclosure that they can stay in the home and attempt to sell, refinance, or otherwise pay back the amount due. The lender can not start the eviction proceedings until after the end of redemption, and the homeowners do not need to have any plans to keep the house to remain living there. Although the bank owns the property at this point, the law allows homeowners to regain possession. Not all states allow homeowners a redemption period, and the length of time varies widely from state to state, which makes it necessary for homeowners to research what protections their own state’s foreclosure laws allow them.
After the sheriff sale is confirmed in states that have no redemption after the auction, and after the end of redemption in states that allow for such protections, the eviction process will begin. The homeowners will be sent paperwork again by the court and the lender’s attorneys requesting their appearance at a hearing, the purpose of which is to order the homeowners to leave the property by a set date. If the homeowners appear at this hearing, they may be given extra time to move out, or even purchase the property back from the bank. However, if they do not appear, the lender will be given possession and the county sheriff will be ordered to conduct the eviction.
The eviction process itself can take as little as a week to a month before the sheriff actually shows up to remove the homeowners from the property. Due to constraints on the time and resources of the department, and the number of other investigations and foreclosures pending, foreclosure victims may have a few weeks to find a new place to live, although they should not be wasting any time at this point. The sheriff will typically post a notice on the property at least three days before the scheduled eviction, but three days is very little time to pack up an entire house and move out. The family may be able to negotiate for a few extra days or a week, at most, in order to effect a peaceful solution, but there is no expectation of being able to stop the eviction process completely. If the foreclosure has progressed this far, the former owners should be more concentrated on moving on with their lives and starting over, instead of risking an embarrassing eviction witnessed by neighbors.
The foreclosure process differs from state to state, so homeowners should start researching what to expect by reading their foreclosure laws. This will give them more of the details that the above description glosses over, and will allow them to fill in many of the blanks, such as how long each stage will take, and what their and the lender’s responsibilities are during the process. Though simply knowing how the foreclosure process works will not guarantee any homeowner will be able to avoid foreclosure, they will have a much better understanding of available ways to stop foreclosure and how much time they have left to save their homes.
| The ForeclosureFish.com website provides homeowners with free foreclosure information and advice designed to help the save their homes from foreclosure on their own. With hundreds of blog entries, articles, and educational materials, foreclosure victims are encouraged to put together a comprehensive plan to avoid foreclosure. Visit the ForeclosureFish.com website today and begin learning how foreclosure works and how it can be stopped: http://www.foreclosurefish.com/
Article Source: http://EzineArticles.com/?expert=Nick_Adama |
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Best Way to Stop Foreclosure
April 20, 2011 by admin
Filed under Your Best Foreclosure
The #1 Strategy For Saving Your Home
Just what is the best way to stop foreclosure? No doubt you are looking for an answer to that question and I am excited to tell you that this article can give you the answer. And a correct answer at that. No time for delay, let me get right into what you can do to save your home today.
The single most effective way to save your home from being foreclosed is by getting a modifying or HAMP loan. So what exactly is a modifying/HAMP loan?
HAMP Explained
HAMP stands for Home Affordable Modification Program and was enacted federally by the Obama administration. It involves modifying the terms of an existing mortgage arrangement in order to give the mortgager (that’s you), more time to pay for their house. The program was specifically designed to help people who are facing financial hardship due to the ongoing recession. There are certain pre-requisites to actually getting a loan but on the whole once you satisfy them you are well on your way to saving your home.
The 2 Pillars of HAMP
Qualification for a HAMP loan involves first demonstrating that your mortgage payment each month is more than 31% of your gross monthly income. Once you demonstrate this it’s on to the second pillar which is providing proof of need in the form of a hardship letter. This letter basically outlines your present financial status, what brought you there, and what steps you’ve taken to remedy the situation.
Moving Forward
So, now that I’ve outlined the best way to stop foreclosure, I’ll show you how to get the ball rolling with it. The first thing you should do from this point is get in touch with a loan modification company. Loan modification companies specialize in submitting HAMP applications and usually have a 70 – 90% success rate in getting you approved for a loan. And just so you know, people who apply for modifying loan on their own have a 30 – 40% success rate, which if you ask me is not worth the risk, especially if you are pretty near to being foreclosed.
The strategy I have outlined is the single best way to stop foreclosure and now you have it. It really just now comes down to you taking some serious action and move forward in an effort to save your home. It’s really that simple. I hope you found the article helpful and good luck.
| Final Note: The loan mod process can be frustrating and overwhelming. Having a specialist on your side can greatly reduce the stress, as they do all the negotiating and paperwork on your behalf. I highly recommend obtaining a free loan modification evaluation in order determine the best course of action based on your financial situation.
Where To Find Loan Modification Help Article Source: http://EzineArticles.com/?expert=Ashley_Munson |
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Home Loan Modification
April 20, 2011 by admin
Filed under Your Best Foreclosure
Home Loan Modification – Your Best Option To Avoid Foreclosure
By Tommy Simons
Article Source: http://EzineArticles.com/5866273
Home Loan modifications have become a very common topic these days. With the turmoil in the real estate markets, many homeowners are looking to their existing lenders for a home loan modification. Most of the time, refinancing is not an option because the property may be underwater, meaning…you owe more than the house is worth. That is when one should consider looking into this option to stop foreclosure.
There are two major types of home loan modification programs and the guidelines for qualifying are different depending upon the one you choose. Most lenders have their own in-house program. However, the home loan modification program one should try first is the Making Home Affordable Program (HAMP). With this home loan modification program, the lender has to reduce your monthly payments to 31% of your gross monthly income.
They have three ways of getting the payments to the 31% required guideline. The first option and the most common way is by interest rate reduction. For example, if one has a $200,000 loan at a rate of 8% and a monthly payment of $1,767.53 including escrow for taxes and homeowners insurance…the lender may be able to reach the guideline by reducing the interest rate to 5% and bring the monthly payments down to $1,373.64. A reduction in payments of almost $400.
The lender has the option of reducing the rate to as low as 2.5 percent. If this still does not get the payments within the 31% guideline, then the lender can go with the second option of extending the term of the home loan modification. Instead of a 30 year term, they may opt for a term of as much as 40 years. Forty years is a long time to pay on a mortgage, but it does help the homeowner to stop the foreclosure and maintain homeownership. There are also programs available that will assist the homeowner in paying off any mortgage years of ahead of its scheduled time.
The last option that a lender have is the principal reduction. This is where they reduce the amount that is owed on the loan. Principal reductions are common in today’s real estate market, but the lender usually will consider other options first.
However, out of the millions of people who need home loan modifications, only thousands have managed to qualify for this program. An important point to remember when submitting your financial information to your lender is that if the monthly mortgage payment to monthly gross income is less than 31% from the onset, then you will not qualify for this type home loan modification program. Conventional wisdom has taught us that a low debt to income ratio is always good, but with this program, a high debt to income ratio…ROCKS!
With the surge in the need for home loan modifications, there has also been a surge in companies providing this service. These companies will work on your behalf to modify your loan.
If you want the best chance at getting your home loan modification approved, you may want to speak with a professional home loan modification company who can help you qualify. The initial consultation is usually free…so it will not cost you anything to find out if they can help.
In a nutshell, the process you need to go through involves contacting your lender, supplying them with paperwork and a hardship letter, and then calling them on a regular basis to follow up on your file. If you are in foreclosure or behind on your payments, you should contact your lender right away. If you ignore the problem, it will not go away, and they will not modify your loan. You must contact them and ask for a home loan modification.
Feel free to contact me directly for more information, or to explore your other options. If your home loan modification is not approved by your lender, don’t give up. There may be others options available to you.
| Tommy Simons is a real estate professional with over 25 years of experience in real estate and mortgage lending. For the past 10 years he has assisted hundreds of homeowners in avoiding foreclosure by working directly with their lender. For more information and tips on this article subject, visit http://tommysimons.net.
Article Source: http://EzineArticles.com/?expert=Tommy_Simons |
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Your Best Foreclosure
April 20, 2011 by admin
Filed under Your Best Foreclosure
Your Best Options When Facing Foreclosure
By Beverly Manago
Article Source: http://EzineArticles.com/4795214
To many people affected by the housing crisis, foreclosure seems the very worst case scenario. Some can see it coming, but are paralyzed with fear and confusion. Here are some ideas to jump-start your efforts to address your situation.
Try to Work it Out with Your Lender
This is a good option if you have detected or acknowledged the problem in its early stages. You might be tempted to think of the lender/bank as the enemy, but really, they would prefer you to stay in the house and keep paying your installments because they can make more money that way. They might work out some kind of deferment arrangement with you.
Find Out if You Can Get Refinancing
This is an advantageous option if interest rates are lowering. Of course, you should first find out if you qualify before you even start your application. Your credit score and your home equity in terms of percentage should be sufficiently high. Otherwise, you might have just wasted the cost of a rather expensive application fee for an option you would automatically be ruled out for anyway. The key is to start early so you have time to research.
Don’t Fight It
This one might be the most shocking, wrenching option of all the ones available to you. After all, doesn’t allowing foreclosure mean that you not only cannot make any money, but that you face big blow to your credit score as well? Is it not better to lose a great deal of money on a short sell?
Well, not necessarily. It can happen that going for a short sell may actually decrease the options you have available to you. For instance, you might be unable to declare bankruptcy, because the money from the sale will be considered income (even if it comes at a major loss to you because you sold the property well below its value). Income taxes will further cut into any money you may have “made” on the short sale. Of course, you can argue that at least you will have salvaged a decent credit rating. This is not necessarily true, either. In some cases (such as for certain but not all residents who happen to be 120 days behind your mortgage payments) your short sale will still be considered a foreclosure, and your credit score will be drastically lowered anyway.
If you happen to be one of these cases, the best thing to do might just be to let the foreclosure happen. If you do this consciously, and after considering all your options, do not think of yourself as having “given up.” Rather, you are making the most of your time and money. Instead of spending it on arranging a rather useless short sale, use your time and resources to look for a new residence, or look up business options to get yourself back on your feet. A good investor knows when it is time to drop a faulty venture. Your house might be just such a faulty venture, in which case allowing foreclosure is the best business decision.
| Beverly Manago is a freelance writer focused on the real estate industry. She is also a consultant for My Single Property Websites, a web 2.0 marketing tool that lets real estate agents create stunning virtual tours and single property sites easily, with a free version available for listing presentations. She also contributes to the Single Property Websites Blog there.
Article Source: http://EzineArticles.com/?expert=Beverly_Manago |
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