Prevent Foreclosures

Archive for the ‘Upside Down Mortgages’ Category

Sometimes, you can avoid having to go through the foreclosure process by doing a real estate short sale. Real estate short sales are commonly associated with upside down mortgages. When a homeowner is upside down, which means he or she owes more than his or her home is worth, then it does not make much sense to sell the home because the proceed from the sale will not be enough to pay the bank off. If the homeowner is only a little upside down, he or she may decide to fork up the difference out of pocket. However, most of the time, upside down homeowners do not have the money to pay up the differences. This is why a short sale is necessary.

When the bank feels that there is no way the homeowner could pay what he/she owes in full, the bank may decide that some payment is better than no payment at all. The bank may also decide that it is more profitable to go ahead and accept a short sale proposal rather than proceed with the foreclosure process. After all, in this buyers market, the bank is not likely to be able to sell a home for a large amount of money.

What are the benefits of a real estate short sale?

The main benefit of doing a short sale for a homeowners is to be able to get out of the mortgage obligation without having to pay it in full. If the homeowner is in foreclosure, the short sale will stop the foreclosure. That means, you should not have foreclosure on your credit record. However, sometimes, the bank has sent  your account to a collection agency or has reported foreclosure to the credit bureaus and then do not send them updates after the account has been settled under a short sale agreement. If this is the case for you, then it is up to you to make sure that the bank send proper notifications to credit bureaus and collection agencies or you can dispute with the credit bureaus yourself.

The effects of short sale on your credit

Unlike a foreclosure, having a short sale on your credit report is not as damaging but it is not totally good either. Usually, you will be able to borrow money sooner with a short sale on your credit record than a foreclosure or bankruptcy. So, if a short sale is an option for you, then credit-wise, it is a good option for you to take. However, you need to also consider disadvantages of doing a short sale too. With a short sale on your credit record, the interest rate you are going to get will still be high but not as high as you would get with a foreclosure or bankruptcy on it.

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When Lenders Wanted to Foreclose

In the past, when home values were high, lenders would not think twice about foreclosing on homes that were in default. When homeowners could not afford the monthly mortgage payments, the lenders would soon send notices to remind the homeowners to pay up. When they still did not get any responses or payments, they sent foreclosure notices. A few months later, if the homeowners could not pay or come up with solutions somehow, the mortgage companies would proceed with the foreclosure auctions. At the auctions, the banks would set opening bids which are roughly the amounts they were owed.

Lenders No Longer Want to Foreclose (most of the time)

When home prices were high and kept rising, there were hopeful buyers looking for homes that they could fix and sell for much higher values. So, the system worked out well for the banks and the buyers or investors. The problem is that now home values are low and many homeowners are upside down, as in they owe more than their homes are worth.

Lenders know that at foreclosure auctions, they cannot set the opening bids as high as they want to in order to payoff the mortgages owed. Homebuyers are looking for real bargains and they are not going to pay as much as the lenders need to recoup all of the money owed on each home. Also, the foreclosure process costs money. The process is risky for the banks as they might end up getting very little money back, or worse yet, end up with the homes that they cannot get rid of or do anything about. Remember, lenders are not landlords and they are not in the real estate business.

Selling Homes at Auctions

Right now, it costs the banks more to proceed with the foreclosure process than what they are going to get back. So, unless your home is in an up and coming neighborhood with real value, then the bank would prefer to work with you to come up with something that works for them and for you. If your home is in a bad condition and homes around you are not selling well then it is likely that you can work something out with the bank. Many banks have shown that they prefer to have the homeowners in the homes and making some payment rather than have them out if the prospect of selling the home is not good. This is why a short sale is attractive to the bank when a homeowner has no way of being able to afford the mortgage payments. By making the bank see that it is better to have you in the home, you can avoid foreclosure or live rent free for a while.

To avoid foreclosure, many people decide to move and sell their home. It’s common to hear people say that “I had to move from my home to avoid foreclosure.” Some people feel sorry for these folks who had to move to avoid foreclosure, but in actual fact, they are the smart ones. They knew they could not keep up with the mortgage payments and if they did not move they would face foreclosure and ruin their credits.

Moving from home to avoid foreclosure

Before the mortgage company can foreclose on your home, it is a good idea to find out how much you will get by selling your home and move to a different home that you can afford better.

By selling and moving, you can get a better price for your home than the price that will be accepted by the mortgage company at the foreclosure auction. As you probably know, foreclosure properties are cheap and many real estate
investors watch foreclosure homes like a hawk to profit off of your misfortune. So, instead of letting the mortgage company win and real estate investors make all the money, you can make the money yourself by selling your home before foreclosure and move with a peace of mind.

How to move to avoid foreclosure?

Before you move, you should find out:

1) What the value of your home is

Get your homes value for free

2) Who is the realtor who can help you

Find and compare top, affordable listing agents

By finding out the value of your home, you will have an idea of how much you will get from the sale to pay back your mortgage company. You can find out the value of your home for free below.

It never hurts to get a second opinion of how much your home is worth. As well as finding the value of your home and how much you can sell it for, you can start finding a good realtor who can help you.

When facing foreclosure, most people wonder if mortgage companies will work with you to prevent foreclosure. The simple answer is yes. However, the extent of how the mortgage company will work with you depends on the individual mortgage company. Although mortgage companies would rather work with you to prevent foreclosure, in practice, it is quite difficult to come to an agreement with mortgage companies.

Why is it difficult to work with mortgage companies to prevent foreclosure?

While all mortgage companies will say that they would work with you and help you however they can, in practice, they are there to gauge how much you can pay, negotiate higher payments than you can afford and send the rest to collection even without notifying you. Most mortgage companies have many departments dealing with people who are behind in payments. It is not uncommon for the person on the phone with you to say one thing and then you receive something else in the mail.

It is hard to talk to the person with authority at the mortgage company. Almost all mortgage companies will treat you as just another case they have to deal with and their objectives are to get as much out of you as possible and as fast as possible. If you are prepared to pay some parts of your mortgage payments, then they are likely to take it but then you are also likely to get a letter from their collection agencies.

How to work with mortgage companies to prevent foreclosure?

Before you contact your mortgage company and try to negotiate, you should find out about all your options. You can get a free foreclosure consultation or you can do a lot of research by yourself.

Prevent Foreclosure Today – Immediate Prevention. Most homes can be saved. Fast & Free Advice

Then you can prepare your hardship case that will include sending the mortgage company a hardship letter or several hardship letters to explain your situation. If you have talked to your mortgage company and have settled on a solution, you should get them to put your agreements in writing. Don’t
trust that things will go as planned until you see everything in writing.

Knowing how to avoid foreclosure can help ensure that you will never face foreclosure. How to avoid foreclosure strategies depend on how much you owe vs fair market value as well as other factors such as how far long in the foreclosure process you are in addition to what other liens there are against your real estate property.

How to avoid foreclosure 101

Below are different ways to help you prevent and avoid foreclosure.

Catch up on your payments Even if you have received the notice of default and is already in the foreclosure process, you can still avoid foreclosure by catching up on your payments (mortgage payment, tax payments, etc). You may also need to pay fees associated with the foreclosure process to avoid foreclosure. But, unfortunately, for most people, catching up on payments is not an option to avoid foreclosure.

Sell your home to avoid foreclosure

Selling your home is a way to avoid foreclosure. If the real estate market is strong, you may be able to sell at a higher value than the amount you owe the mortgage company and pay off the loan. You will avoid foreclosure by paying off the loan. However if the real estate market is slow or weak, see short sale.

Let someone else take over your mortgage payments to avoid foreclosure

There are many real estate investors who are trained to profit by taking over mortgage payments of people in foreclosure. This may be a way for you to avoid foreclosure.

Rent your property to avoid foreclosure

Renting is a way of making fast money, providing your house is somewhere attractive to tenants. You may be able to obtain fast cash to catch up on your payments, therefore avoiding foreclosure.

Free Avoid Foreclosure Consultation

If you want more information about what you can do and learn all about your options, here is a link to a free consultation.

Prevent Foreclosure Today – Immediate Prevention. Most homes can be saved. Fast & Free Advice