Real Estate News

San Francisco is relatively behind in the Foreclosure rate compared to other cities of California. But foreclosure rates have been rising lately. When property reverts to the lender, namely the Bank, it is called as Real Estate Owned (REO) property. Investors who wish to make hay while the sun shines need to keep certain facts in mind when they use San Francisco Foreclosure Listings for buying REO properties.

Finding an REO Listing is the first task. This is relatively simple. You have to just decide on a budget and a geographic area, check yellow pages or online postings of San Francisco Foreclosure Listings. Then you zero on to a property foreclosed by a bank.

There are special considerations with Real Estate Owned by Banks properties in San Francisco foreclosure listings.

• Banks do not do more than basic maintenance of foreclosed properties. They don’t paint nor replace carpets. Be prepared to make a sizeable expenditure to get the property in shape after you purchase it.
• Remember that Bank owned properties may be discounted but they are never total give aways. The Bank usually determines the asking price after consulting several real estate agents in the area. Once the bank has an asking price it will hold for a period of time. If they don’t get that amount in three or four weeks, they will lower the price a little more.
• Very often they can draw multiple offers. This is because there is a fierce competition in people trying to buy foreclosed properties.
• They are sold in ‘As-is’ condition. May be the foundation is shaky, the appliances all in not working condition, the carpets all torn and tattered. Make sure you take these factors into account while making your offer. Like in the case of usual home purchases arrange for home inspections. You must add fix up costs to the total asking price so you don’t suffer later.

If you buy from owner occupants it is a lot different from buying bank owned property. The owner occupant can give you lot of information about the property but the Bank has limited information about foreclosed property.

Before you make an offer, you must be ready with your finances. Banks and owners are aware of how difficult it is to procure a house-mortgage. So you must come prequalified for a mortgage.

Next you approach real estate auctioneer selling hundreds of foreclosed properties on the behalf of banks. These are usually in good condition with clear title deeds. Very often, all pending liens have been cleared. The Bank is eager to get the property off its hands. It doesn’t want to have a public image of having bad debts. So REO properties are sold at reasonable discounts and within short periods.

Recent statistics showed that foreclosure filings reached one million in May with indications that the number could swell to 2.4 million by the end of 2009. Unfortunately, much like filing bankruptcy, the ramifications of a foreclosure filing will follow these families around for a long time. The first issue following a foreclosure, however, is an immediate one; finding a new place to live. Many families, in the battle to remain in their home, will use up most or all of their funds prior to foreclosure. That leaves them empty handed once the foreclosure is done. Combined with a credit score that reflects the foreclosure, the lack of funds can make a prospective landlord queasy about approving an applicant in this situation. Solutions include:

* Writing a letter of explanation to accompany the lease application. Putting a story behind the current situation, along with a detailed solution can go a long way.

* Offering a larger deposit than required. It may have to be borrowed or saved during the last stages of the foreclosure but the offer of a larger deposit will serve to lessen the risk perceived by the landlord.

* If there is a solid income history, leasing a property at a small fraction of the total income will ease the concerns of a landlord.

The second issue is the inevitable hit on the homeowner’s credit score. Credit scoring is now integrated so that a foreclosure will not be an isolated event. Once a foreclosure hits a report, credit card interest rates will skyrocket and credit limits will be slashed. Carrying a high balance on credit cards can be prohibitively expensive at interest rates above 27%. It will also be difficult and expensive to get approved for any other type of loans. Solutions include:

* Debt settlement – Defaulting on consumer debt and then doing nothing doesn’t make it go away. Additionally, staying current on your cards with rates at 30% is going to take precious money away from lease deposits, etc. If your credit score is going to take a pounding anyway, entering a debt settlement will cut your payments in half and pay the debt off within 48 months.

* Be proactive regarding your credit score. Be sure to note your scores when balances are paid off. Your credit score can be re-built over time as you get out of debt.

Like bankruptcies, prospective employers are now focusing more attention on foreclosure filings in terms of judging the character and financial responsibility of the applicant. Credit checks are now a regular part of the screening process, especially when there are a number of applicants. A foreclosure can tip the scales if everything else is equal between two applicants. A possible solution is to have a letter of explanation detailing the events that led to the foreclosure. Total honesty is going to be the best approach here and, who knows, if the person hiring you is going through his own set of financial challenges you may just find some common ground which to you getting a break.

The IRS considers the amount of money owed on the mortgage that is not recovered from the sale of the property as income for the homeowner. In any case where debt is forgiven, the amount not paid back will be taxed as income. Solutions here include a congressional pass that exempts the owners of foreclosed property from a tax hit if it was their primary residence and the property wasn’t refinanced with a cash out loan. The tax bill can also be avoided by proving insolvency. If your debts are greater than your assets you’ll be allowed a pass on money owed for forgiven debt.

In the end, the mental toll of being forced from your home and community could be the greatest cost. The best solution is to focus on learning from mistakes, putting the past in the past, and moving forward. Lastly, like filing bankruptcy, the stigma of filing foreclosure doesn’t carry the baggage that it once did. As widespread as foreclosures are and with delinquencies occurring in 12% of homes across the country, they are quickly becoming seen as another part of life, not some sort of massive failure.

Very often, when someone contacts a loan modification attorney they really do not understand how the foreclosure process works or how to stop it. People who do not understand foreclosure proceedings are often scared, timid and unwilling to do what it takes to stay in their homes. Many think that if they just ignore their lenders, they will go away. However, inaction is not any way to respond to a potential foreclosure. The only way to mount a successful defense to foreclosure proceedings is to know how the process works, and talk to the loan modification attorneys who know how to stop it.

Foreclosure Process

The first step in the foreclosure process begins when a lender files a “Notice of Default” with the county recorder. This often proceeds a period of non-payment by the borrower, meaning the homeowner is defaulting on the loan by not making payments. This notice is mailed to the borrower and any other affected parties. This is in no way the end of the process; in fact, up to five business days before the trustee’s sale, the borrower can pay off the default amount plus any addition fees and/or fines and stop the foreclosure process. Obviously, very few people can simply cough up the thousands or tens of thousands of dollars it would take to pay this amount.

The second step comes ninety days after the Notice of Default is recorded. A “Notice of Sale” must be posted on the property and in one local public location, such as a library or town hall. The Notice of Sale is also published once a week for three weeks in a newspaper of some sort in the area. The Notice of Sale must clearly state the date, time and location of the sale, as well as the property address, the trustee’s contact information and any other pertinent information.

Step three usually occurs about four months after the foreclosure process began. The Trustee Sale Auction is held as a public auction at the time and place designated by the Notice of Sale. It is conducted by the lender’s representative, almost always an attorney, and the successful bidder must pay immediately with cash or a cashier’s check. The lender often bids in the amount of the balance due plus costs. If no one else bids (which is usually the case these days), the property reverts to the lender.

Contrary to popular belief, the lender or bank you got your mortgage from does not want your house back. The entire foreclosure process costs the lender far more than it is worth. The lender is not only losing money on the four months you aren’t paying your mortgage, but will most likely lose money paid to the attorney who runs the auction. A loan modification attorney can help you avoid foreclosure and stay in your home. Both you and your lender are interested in you keeping your home, and a loan modification attorney can help you avoid the headache, heartache and embarrassment of a foreclosure.

Visit us at http://www.loanmodificationhelpcenter.org/ or call 800-359-6941.

Legal Disclaimer

The information contained herein is provided for general information and advertising purposes only and is not intended to convey a legal option nor legal advice for any particular case or situation. Nothing in this article shall create an attorney-client relationship. Nothing sent to this law office via e-mail shall constitute an attorney-client relationship. Nothing contained in this article shall be construed to be a guarantee or prediction of result. Prior results are provided for general information purposes only and do not guaranty, warranty or predict a similar outcome with respect to any future matter. Results achieved depend on individual circumstances and not everyone will qualify or be successful in restructuring their mortgage loan.

Regardless of where you are at financially, it is almost never too late to avoid losing your home to foreclosure. Qualified loan modification attorneys know that while it is easy to lose hope and fall into a place of inaction, you have many tools at your disposal.

Options

Contact your existing lender and see if you can get a forbearance, a payment plan or a deed in lieu of foreclosure. A forbearance is an agreement between the lender and the borrower that reinstates the delinquent loan through the payment of a lump sum or a schedule of payments over a period of time. A payment plan is similar to forbearance; in some cases, the lender may agree to a short term payment plan if you can prove you’ve had a hardship (loss of a job, medical bills, etc.). A deed in lieu of foreclosure is a voluntary transference of title to the lender. Most often, this is used as a last ditch effort by the homeowner to avoid the negative consequences of foreclosure.

The problem with all of these options is that they require a great deal of cash on hand, something you most likely do not have available. Foreclosures can be a challenging situation because most people facing foreclosure are not simply lazy people who forgot to pay a bill, they are hardworking people who are facing some sort of financial crisis. These might be options if you have $10,000 or $20,000 on hand, but odds are you do not. With a deed in lieu of foreclosure, the ultimate problem is you no longer own the home, and so now you’ve lost any equity in the house and you are not in control

Other options include refinancing, although that depends upon your credit history which could have taken a massive hit from your financial problems. If you do not have an outstanding credit history, or if your financial challenges are more than short term, a refinancing probably will not happen. A short sale is an option, although there is no guarantee that the lender will forgive whatever debt remains from the short sale. There is also always bankruptcy, but there are so many challenges before, during and after a bankruptcy that it can be a complete waste of time. A bankruptcy will stay on your credit history for up to a decade and provide nothing but headaches during that time. Even afterwards you can face financial challenges, career challenges and legal challenges stemming from the bankruptcy.

Quite possibly your best option when facing foreclosure is a California loan modification. A loan modification is a change of the terms of the original mortgage loan; the change could be to the interest rate, the length of the mortgage, the principal balance, the late fees or some other part of the original agreement. To get a loan modification, you can attempt to deal with the lender yourself or hire a California loan modification attorney to negotiate on your behalf. A loan modification attorney will often get a quicker response from a lender because he or she will have the law on their side. A lender will consider a loan modification when foreclosure is eminent and the borrower’s income has been decreased, but if the borrower will be able to keep paying the mortgage at a lower monthly rate.

Visit us at http://www.loanmodificationhelpcenter.org/ or call 800-359-6941.

Legal Disclaimer

The information contained herein is provided for general information and advertising purposes only and is not intended to convey a legal option nor legal advice for any particular case or situation. Nothing in this article shall create an attorney-client relationship. Nothing sent to this law office via e-mail shall constitute an attorney-client relationship. Nothing contained in this article shall be construed to be a guarantee or prediction of result. Prior results are provided for general information purposes only and do not guaranty, warranty or predict a similar outcome with respect to any future matter. Results achieved depend on individual circumstances and not everyone will qualify or be successful in restructuring their mortgage loan.

First off, let me state that every person’s scenario is different. There are many factors in determining if you should sell now, or wait. Obviously, home values have declined since 2005/6. Condos and townhomes have especially been hit hard. So be prepared, if you are going to sell now, or soon- you would be selling for less than you bought it for. If you’re okay with this, then we need to look at what they are selling for now, and decide if you’re ready to list it at that going price point, or if you want to keep it and wait until the market returns. The problem here in waiting, is that when is the market going to return? In a year? In two years? 2014? It may be the best option to sell now, instead of waiting for the market. We are seeing an increased amount of Short Sales and Foreclosures in the market. You will have to compete with these “typically lower-priced” homes. Know that interest rates are ideal AND property values are declining, making it a great time for buyers to get into a home. And with the first-time home buyers tax credit of $8,000- it appears to be a good time to sell, for the year.

This brings me to my next point. When selling, you can either price it ahead of the market, or you can price it to where you are chasing the market. The best scenario is to price your house or condo ahead of the market, so that you will sell it quickly. The alternative is to price it similar to the others, where you are continually doing price reductions (with the market) and end up selling where you should have priced it all along in the first place, and it took a much longer period of time (which means -$$).

Great, what is my point? Just make sure you understand that to sell in this market right now, your home has to be priced properly AND has to show very well. The days of just putting your home on the market “right away” are gone. You have fierce competition in your marketplace and neighborhood, and you need to get with your Realtor and have a complete game plan. If you structure your game plan well before you hit the market, then you are aligning yourself with success and will more than likely hit it. Like I mentioned, you are in a fierce, competitive marketplace and if you don’t have a SOLID game plan, you will be left out in the cold. Worse yet, your house will be on the market and become that “stagnant house” down the street. In your game plan, your Realtor will give you an opinion on value of your house, so you must decide whether that price is acceptable to sell, or whether you need to wait and possibly rent. Right now, a lot of sellers have decided they don’t want to sell in this tough market. That is just fine as long as you don’t HAVE to sell right now. Renting out your home might be a viable option right now, but know that being a landlord is work. Problems come up with the house, you get the wrong tenants, etc. It can take a lot of time and money.

As far as what is a good time to put your condo on the market (if you decide to sell and take the hit), I think that now might be the best time. Showings are up during the spring and summer, the $8,000 tax credit is out there, and new construction and sellers are offering fantastic deals and incentives. Typically, the winter months are slower, and I would say that your best chance to sell would be in the Spring and Summer. But with the rates being at where they are now, this gives buyers the chance to get in with a good rate, if qualified.

It is up to you to decide what is best for you. Each scenario is different, and you must make the decision yourself, hopefully with some guidance from your Realtor. It may be best for you to wait, but rates sure are low right now. With unemployment going up, home values will decline further. If you price it right now, and it looks good on the inside, and you have a solid marketing plan, you should be able to compete to sell. A lot of the people sitting on the fence have come out to buy with the way rates are right now, and with the first-time homebuyer tax credit.

Good luck, and do your homework before hiring your Realtor!

Feldman Law Center – News by Feldman Law Center – For all the negatives that have been written about loan modifications, and there have been a lot, the option is far and away the best option for struggling homeowners trying to stay in their homes and preserve their credit scores. As property values have plummeted, the possibility of selling or refinancing the home has been erased. That leaves foreclosure, a short sale, or short refinancing as the remaining options outside of a loan modification for homeowners to resolve their issues with their lenders. All of those options do extreme damage to credit scores and stay on the homeowners’ credit report for a minimum of seven years.

A home loan modification is basically a change in the terms of a homeowner’s existing mortgage with the objective of bringing the monthly mortgage payment back in line with the homeowner’s current financial situation. By modifying the existing mortgage, the transition doesn’t affect the credit score of the homeowner. Additionally, the credit score of the homeowner does not carry much weight in the modification process.

A home loan modification’s main feature is normally the alteration of terms on the existing mortgage’s first five years. It’s not unheard of for modifications to alter terms for the life of the mortgage but most of them cover the first five years. It is hoped by all that conditions in the economy, real estate values, and the job market improve enough by that time that homeowners will either be able to sell the property or afford payments at the higher levels that go into effect once the modified rates revert back to their original levels. The modification benefits the lender by keeping the homeowner in place, which results in continued cash flow from the property, and by preventing the property from going into foreclosure and back on to the books of the lender.

As simple as the process has been made to sound here, the negotiation of terms on a mortgage is not in the normal purview of a homeowner. Hiring legal representation is the best way for a homeowner to ensure that will get the best results possible for their personal situation. An attorney will base the negotiation for the loan modification on the homeowner’s total financial picture, including credit card and consumer debt. Where it makes sense, the firm may initiate debt negotiations, along with the home loan modification, on the other debts carried by the homeowner including credit cards, revolving debt, consumer loans, unpaid medical bills, etc.

The law firm will also assist in the drafting of a hardship letter, which details the conditions of the challenges facing the homeowner. Hardships can include an adjustable rate mortgage with payments that have increased to the point where they are out of reach of the homeowner, pay cuts, job losses, illness, or divorce. The hardship letter should also include the homeowners plan for dealing with and getting past the current hardship. From that point negotiations begin, the ultimate prize being the modification.

If you are struggling with your mortgage payments, are behind on payments, and/or facing foreclosure, talk to an attorney’s office that specializes in home loan modifications. The Feldman Law Center has executed over 600 loan modifications and has the experience and knowledge to get the best possible results to address your specific needs. Call them today at (949) 544 8224.