Stop Foreclosure Now

Tags: how-to-stop-foreclosure, stop foreclosure

If you own a home and fall behind on your payments you risk foreclosure. The foreclosure spiral begins when your loan payment becomes 16 days overdue. At that point, your mortgage lender will try to contact you to work out a repayment schedule to bring your loan current.

If your first payment becomes 30 days delinquent and the next month’s payment looks doubtful, collection attempts begin in earnest. If your payments fall 90 days behind, the lender will likely refer your mortgage to an attorney or other entity that will initiate formal foreclosure proceedings.

With a foreclosure, the lender takes possession of the house, evicts the tenants, and puts the property up for sale.

A foreclosure on your credit record can be devastating and long lasting. It remains on your credit record for at least seven years. Avoid foreclosure if at all possible.

A way of avoiding a foreclosure is forbearance. Forbearance is a postponement of loan payments for a temporary period of time. This is normally done to give the borrower time to make up for overdue payments. This doesn’t mean the lender has forgiven the debt or any part of it. It simply allows a borrower to pay what is owed at a later date.

Most arrangements call for the borrower to make up the back payments and any fees plus interest over a period of time. When this amount is added to your existing monthly payment the result is often more than can be handled. But it is a better option than defaulting on your loan. A foreclosure can have negative effects on your credit score for years.

Lenders are required by law to work with you and attempt to approve your forbearance agreement request. It is extremely important that you are talking to the correct person within the lender’s organization that handles forbearances.

Additionally you must communicate everything in writing. Take notes on every phone call and confirm them back to the lender in writing. You have time to work this out. Follow through in a timely manner. Even if you get a date to appear in court don’t panic. You are able to get this date extended twice before your home would be sold at an auction.

Forbearance is a good option for a temporary problem. The effect of a successful forbearance on your credit record is minimal to moderate, depending on the circumstances.

If you’re already in foreclosure contact your lender and ask to be referred to the loss mitigation department. A forbearance agreement does not stop foreclosure but causes the lender to “postpone” or “continue” the foreclosure sale until the payments are completely caught up. A borrower MUST comply with the exact terms of the forbearance agreement or the foreclosure sale takes place immediately.

Tags: forbearance

The Headline SHOULD Read:
We buy houses! If you want to sell your house thousands below market
value! We’ll make a killing!

But instead it says things like:

We can save your credit!
We pay cash!
We buy your home and rent it back to you!
My company specializes in helping people just like you!
Don’t let the bank take your home; we’ll pay you for it!

Most advertisers with ads like these are bottom feeders. They try to
profit from your misfortune. If they really cared about you they would
help you for free or maybe charge you gas money. Now I’m not opposed to
capitalism or free enterprise but I am opposed to preying on people’s
misfortunes. Let’s look at some of the above examples:

We can save your credit (for a small fee).

Saving your credit is a questionable statement. In all likelihood your
credit is severely burned already. The real deal here is that you
actually pay them to take your house. They convince you that by selling
you will be spared the foreclosure and your credit will be spared a hit.

Some of that is possible true. If the house is not already in
foreclosure, you will be spared that hit but there is a bigger picture.
If you have equity (they won’t buy the house unless there is equity) you
lose, they win. They win ALL that equity and you paid them to steal from
you.

We’ll pay you cash (to sign over the house).

Same as #1 except that you get a little cash instead of paying them some
cash. Still, you are losing on the equity in the house. I watched an
elderly woman lose all the equity in her house for a few thousand dollars
up front. She was scared into thinking she would be a homeless bag lady.
With her equity she could have bought a small older house for cash.

We buy your home and rent it back to you!

What a deal! They buy your home for pennies on the dollar and you sign a
lease to give the monthly payment amount. Most of these guys buy your
home and get financing to cover the cost. The payments are then made by
you on your own house. Many times they will flip the house with a
guaranteed renter, you.

My company specializes in helping people just like you!

It should read “My company specializes in helping separate people just
like you from their money!” That’s what they do and they do it well.

My best advice is the same advice I give to senior citizens all the time.
Don’t trust anyone that contacts you first. Only consider trust if you
initiated the contact. That includes the mail, the phone, email and
doorknockers. Ask yourself, why me and how did they find me? Bottom
feeder!

Don’t let the bank take your home; we will sell it or we’ll pay
you for it!

This one is unbelievable. These are usually unethical real estate agents.

They have you sign a contract listing the house for a set period of time
and after which the agent can buy your house at a discounted price. They
never really try and sell the house and then they will convince you that
the lack of buyer interest shows the house won’t sell for the asking
price. Your only option is to take their discounted price.

Rest assured, they already have a buyer and will flip the house as soon
as the U-haul pulls away. Always use a local real estate agent and
preferably someone that a friend or neighbor has used before.

Remember that YOU are the only person that has YOUR best interests at
heart. Think! Be cautious! Take your time and do your research!

Tags: foreclosure con artist

Foreclosures are on the rise. Nevada has the highest per capita foreclosure rate and California has the largest number of foreclosures (they have more houses). Figures for Detroit show that there is one foreclosure filing for every 51 households. That’s five times the national average. Many people are forced to ask the hard question, can I just give my house back to the bank?

This is a very common question. The process of giving a home back to the bank is called a “Deed in Lieu of Foreclosure.” As good as it sounds, not all banks will take a house back when it is offered

If you have equity in your house, you would fare better by listing the property and going for a quick sale. In many parts of the country, houses are offered thousands of dollars below market and they still have no takers. Consequently, a quick sale might not be so quick.

A California couple put their house up for sale at $100,000 below appraisal and has since lowered it 3 times to $200,000 below appraisal. After six months they are still waiting for their first offer on the property.

Before you pack that U-haul late at night and disappear you might want to consider looking into a deed in lieu of foreclosure. A lender will rarely be interested in taking a property back if more is owed than what the property is worth.

Any settlement agreement entered into must have a total consideration equal to or exceeding the fair market value of the property being returned to the lender. Most lenders will not proceed with the deed in lieu of foreclosure process if more is owed on the property than the fair market value of the property.

A borrower will benefit slightly from a “Deed in Lieu” on a credit report. The loan’s status will be closed but it will reflect that a “Deed in Lieu” was applied for. The reality is that this is slightly better than a credit report showing a full “Foreclosure.”

A distinctive plus in the process is that the foreclosure process will end sooner than if the entire foreclosure process had played out. Your credit report will show less late payments. That in itself will make it easier to rebound from the loss of your home.

If a foreclosure is inevitable, offering it back to the bank is a good idea. You will lose the house sooner or later anyway. Make the personal damage less and allow the rebuilding process a break that will allow you a near normal life sooner.

Advantages of a Deed in Lieu of Foreclosure

1) You are immediately released from most and sometimes all of the indebtedness associated with the defaulted loan.
2) You avoid the embarrassment of newspaper postings, the sheriff tacking a legal notice to your door, a court appearance and a formal sheriff eviction.

Giving the home back to the bank will not save your home, but it will help your future. And the process is less harmful to your credit report than an actual foreclosure.

The Down Side of a Good Deal

Giving the house back to the bank is a good answer to a bad problem but it does have a down side: 1099C, Cancellation of Debt.

If you borrow money from a commercial lender for the purchase of a home and later give the home back to that lender, the lender might later cancel or forgive that debt. Under that circumstance, you may have to include the canceled amount as income for tax purposes.

When you borrowed the money you were not required to include the loan proceeds as income on your tax return because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you originally received as loan proceeds is reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you.

Cancellation of Debt income is not always taxable.

There are some exceptions. Debts discharged through bankruptcy are not considered taxable income. Additionally, if you lose money from the sale or foreclosure of personal property you cannot deduct that loss.

Tags: deed in lieu, Foreclosure, foreclosure process, quick sale