Archive for February, 2011

What You Need to Know About Foreclosure

 

 

Summary – Foreclosure is the option available to lenders in case of payment defaults. They could assume ownership or sell a property to reclaim their amount. The homeowner can try for forbearance, loan modification or short sale to prevent foreclosing.

Foreclosure is the method by which lenders, who have been facing default payments for some time (two to three months) and are convinced that the borrower will not be able to pay back the loan, recover their capital. They either assume the property’s ownership or try to sell it off. Lenders typically file for foreclosure after they have contacted you both by means of a demand letter and over phone (typically a month after your payment date). They file for the papers with whichever authority is in charge. The foreclosing sale itself may happen three to four months after that.  

After the notice is recorded, an ad needs to be published for five to six weeks in a newspaper and a notice needs to be sent to the homeowner. Three to four weeks prior to the sale, the authority would also send a notice to the homeowner mentioning the sale and methods by which you can prevent the process. But, you do not have to wait till this particular notice arrives to do something about foreclosure. If you know that you will have to start defaulting or are already facing late payments you should start thinking about how to avoid losing the house to foreclosing.

Your best way to avoid foreclosure would be approaching the lender. You could ask the lender to offer forbearance or loan modification. Forbearance would mean that the lender allows you to go without paying for a few months in return for higher payments afterwards, till you catch up with the payment. It comes in handy if your lean period (when you cannot pay your mortgage) is going to last only for a few months and you could make higher payments without fail after that.

Loan modification involves modifying the terms of the loan such as loan term, mortgage payments, at times even capital. Since foreclosure is not a pleasurable experience for the lender either, it is very probable that you will get some modification (do not seek the help of people claiming to be lone modifiers unless they are registered and licensed. Do not make any upfront payments). You and your lender could also try and get a payment from the FHA Insurance Fund to make up for lost payments (Partial Claim). Do either only if you are able to meet the payments after that.

If you have equity on your home, you could also try selling it. If you do not have equity then this may not be an option. Do not list with a realtor if your property could get tied up. You also have the option of voluntarily giving back the property to the lender (Voluntarily Foreclosure) or getting somebody else to assume the loan in return for the property (only possible for loans made before 1988) or file for Chapter 13 bankruptcy (may be costly; you would have to make higher payments after that or you will lose your property again (Chapter 7 bankruptcy- It looks even worse on your credit report too). Finally, you also have the option of a short sale (only if the lenders agree to the reduced money that they will receive). The house is sold for an amount less than the loan amount and the proceeds are given to the lender.

Knowing these details about foreclosure will help you decide on how to proceed if you are facing payment defaults. Do not be an ostrich. Do something.

Written by Carol Pefley

www.carolpefley.com

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Benefits of Short Sales

Short sales are famous for its low home prices and it is also offers benefits to sellers, lenders and buyers as well. A short sale is where the homeowner owes more than his or her mortgage. However, the lenders must approve the sale amount and agree to cover the expenses the seller cannot obviously pay.

A combination of regular property transaction and a foreclosure by the bank makes up the short sales. The homeowner who cannot comply anymore with the mortgage will make an agreement with the lender that instead of foreclosing the property, the property will be put up for sale. Once the property is bought, the seller will then pay the money to the lender which will benefit the seller because he or she doesn’t need to worry anymore when it comes to paying the loan the lender gave him or her.

Short sales benefit the buyers because of the cost of the property. It is known that when a property is up for a short sale it is being sold at a very low price so the seller can pay off the loan immediately. This is to avoid a foreclosure which may cause hassle to the seller and the lender as well and it will be even more difficult to find a buyer because the prices will be a bit higher.

If you’re looking for a home, then you probably need to look for homes that are up for short sales especially if you need an immediate home and you can’t stand any more waiting for a property to be on sale. There is lesser competition in a short sale which will likely give you the opportunity to score up a home in a fast way.

Short sales benefit the three people involved in the particular sale; the lender will be paid off in a fast way, the seller will be able to pay the loan immediately and the buyer will get a home in a fast way. However, it is best that you do a walk-through when you are buying a short sale home because some of these homes have damages. However, there are homes that are up in a short sale that are still in very good condition.

So, if you want to score a home in a fast way, you should look for short sales around the area and probably you can seek help from a real estate agent.

Written by Carol Pefley

www.carolpefley.com

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Foreclosure Sale – How You Can Benefit From It

 A foreclosure sale occurs when a person who takes out mortgage against a property is unable to make his payments as per the schedule and the bank or the lender moves the court to sell the property in order to recover the amount that they are owed. When a mortgage is taken, there is a formal agreement between the buyer and the lender, whereby the lender retains a right over the title of the property until the time that the buyer makes all the payments towards the loan.

 A foreclosure sale benefits the mortgage lender, as it enables him to put the property on the market and utilize the sale proceeds towards recovering the amount due to him. In addition, a foreclosure sale can be beneficial to a prospective buyer who is looking to buy a property. How does it benefit a prospective buyer?

 For a first time owner who is on a budget, his dream home can get bigger if he is able to get it at a cheaper price during a foreclosure sale. Although banks try to make a profit out of foreclosure sales, in times when the real estate prices are in a slump, they may not be able to get the market rate and will be willing to sell it for the best offer. By looking out for properties that are being sold due to foreclosure, a buyer can get a bigger house than he normally would with his budget.

 A foreclosure sale can also benefit an investor who is looking at making gains through investing in real estate. By buying the property at a price lower than market rate, he could hold on to the property until the market picks up, so he can make a profit. Alternatively, he could spend a small amount towards refurbishing or remodeling and then resell at a higher price thereby gaining a significant profit.

 However, before you buy a property during a foreclosure sale, you should make sure that you understand what you are getting into. Evaluate the risks before taking the plunge. In some cases the house would not be open for viewing prior to the auction. Hence, you will not be able to assess the condition of the property and may have to spend a large amount additionally towards repairs. Make sure that you evaluate or get an expert to help before deciding to buy.

Written by Carol Pefley

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San Jose real estate and becoming a realtor

The San Jose real estate is vibrant and flourishing with various types of apartments with modern amenities, town homes, luxury homes, condos, and other types of investment properties. It is one of the main cities in the State of California and has many affordable neighborhoods like Japantown, Blossom Valley, and Evergreen. Other best neighborhoods in this metropolis city include Almaden Valley, North Valley, Willow Glen, West San Jose, Downtown San Jose, North San Jose, Cambrian Park, Santa Clara, and Palo Alto.

 

The city also boasts of gorgeous natural surroundings, quality schools, medical care facilities, excellent restaurants, beautiful beaches, recreational spots, museums, parks, and nightlife opportunities. San Jose is a part of Silicon Valley and naturally has many thriving high-tech establishments. In February 2011, the average price per square root in San Jose is $391, showing a 1.4% reduction from last year. The median San Jose homes sales price from October 10 through December 10 was $400,000. There was no increase in median homes sale price, but the homes sold decreased by 27.6%.

 

However, San Jose real estate has the potential for more growth and good returns. There are thousands of homes and several apartments and condos for sale in San Jose. Moreover, this metropolitan city is considered as one of the safest cities in America. It is an ideal place to live, work, and raise a family.

 

There are many individuals in San Jose who have taken up San Jose real estate as their primary career. In California, only those who have obtained the real estate certificate are allowed to work as real estate agent or realtor. You can apply for the certificate if you have completed 18 years of age and have a three-year college education. The applicants are also required to attend specified real estate courses and pass an exam. It is necessary that you must have obtained at least 75% on the exam.

 Written by Carol Pefley

www.http://carolpefley.com/

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Getting Loan Modifications without Getting Cheated

Loan modifications are almost the last options for people who risk losing their home to foreclosures. In case you are wondering, it means modifying your loan so that you could manage to pay it back. It could be a change in the term, a reduction in the mortgage payments, at times even a reduction in the amount to be paid. The lenders agree to it because foreclosures are losing terms for them as well. At times, it is better for the lender to modify the loan than to go for foreclosures. Unfortunately though, there are many unsavory elements that take advantage of the desperation that a homeowner who risks foreclosure feels and try to rip them off by promising loan modification. You have to keep a wary eye out for such people.

Here are some tips that would help you get loan modification without getting cheated in the process –

  1. Call the Lender Yourself – It is not necessary that you should get an outsider to get your loan modifications done. You could try the direct approach. Many lenders have loan modification departments, so call them and ask them to guide you to the concerned department. If they say they don’t have them then ask them to guide you to loan mitigation department. And don’t be disheartened if they at first say no. Persist.

 

  1. Threaten Bankruptcy or Foreclosure – Since lenders dislike foreclosure very much you could threaten them with that to get them to agree to modifying your loan. Say the process will drag on for a long time if they do not agree to do something. And if you threaten bankruptcy it would be worse for them.
  2. Get Help from Licensed Folks – If you cannot get the loan modifications on your own get help from licensed people who specialize in it. Do not go for people without any license or reputation. Do not be taken in by ads.

 

  1. Do Not Pay Any Money Upfront – If any loan modification company asks for upfront fees then they are most certainly trying to cheat you. Hence do not pay any fees in advance.

 

  1. Ask for More Be Ready to Settle for Less – You should naturally ask for the most you could get by means of loan modifications. But this does not mean the lender will give you whatever you ask for. So be ready to settle for anything that you can manage and would improve your situation. Getting a professional appraisal done would also help your cause.

 

Loan modifications, if done properly can save your home and can save the lender all the bother of a foreclosure.

Written by Carol Pefley

www.carolpefley.com

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