The Foreclosure Legal Procedures and Your Rights!

The term “Foreclosure” refers to the legal process which a lender uses in recovering the balance of a loan given to a borrower. The process is initiated when the borrower fails to complete the loan payments as earlier agreed upon. The balance is realized through a forced sale of the property which has earlier been used as collateral.
The Foreclosure Process
The foreclosure process usually starts with proper notification for sale of the property. This is initiated when the homeowner has failed to fulfill his or her side of the agreement reached when the loan was taken. The notice for the sale of the property comes after several notifications have been sent to the homeowner asking him or her to complete the loan payment. In most cases, the lender will instruct the trustee to start the foreclosure process with immediate effect. A notification from the trustee will be sent to the borrower and to every other party involved in the property. The notification will tell you that your property is not in the foreclosure process and it will be filed in the county where the property is located. The notification will include your name and address, the names of the trustee and the lender, the legal description of the property, the reason for the foreclosure, total amount owed, date, time and place for the auction sale of the property.
You’re Rights
You don’t need to panic when your property is in foreclosure. You still have some rights to reclaim the property if you want. Let’s discuss more on this.
• You have the right to initiate a negotiation with your lender before or after the foreclosure process has started. It’s important you contact the lender before the actual foreclosure process begins. You can request for an extra grace period to help you clear the debt.
• If the foreclosure process has already begun, you still have the right to stay in the house. No one will evict you until the house is sold. However, bear in mind that the future buyer of the house will have the power to ask you to leave the house when necessary. However, proper eviction process must be followed if the new owner wants to kick you off. You may even negotiate with the new owner to stay in the house on rent.
• You have the right to fight the foreclosure if you think it’s wrong. You can use a lawyer to fight the foreclosure case in court if you think the entire process is wrong.
• If the foreclosure process has been started, you still have the right to buy the house back within 180 days. This is usually known as redemption. It helps you to pay the purchase price of the house in order to get it back.
• You still have the right to sell the house quickly if you’re facing a foreclosure. This can easily stop the foreclosure process since you can make money from the sale and pay off the mortgage in full.
• You have the right to reinstate the loan. You can do this by brining the loan current and paying off the balance and other expenses incurred. You have to this at least 5 days before the slated date of sale auction for the house.
In all, you have to take time to understand the entire foreclosure process in order to know your rights. If you’re confused, you can seek help from an attorney or an expert in foreclosure like myself and my Team.
Article Source: http://EzineArticles.com/?expert=Steve_K_Olson

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How Can You Protect Yourself During a Foreclosure

There are many effects that a foreclosure can have on the homeowner. There is of course, stress and depression aside from having a bad credit score. These are the reasons why they refer to foreclosure as the beginning of every homeowner’s financial devastation. While some homeowners were able to get back on their feet after foreclosure, unfortunately, there are more who didn’t make it back.
It is a smart thing to do research about the options you will have during a foreclosure. It is really important that you seek knowledge about this important issue because in this business, there is really the risk of having your home foreclosed due to some possible reasons that can occur in the future. Now, if you or your family members are in the real estate business and thinking of some possible ways that you can apply to protect yourselves during a foreclosure do the following and come out of the foreclosure process with your head still above the water.
1. Arm yourself with the right information. You can do this by seeking an attorney’s legal advice. Just so you know, there are many homeowners who came out of foreclosures with peace of mind because they were armed with the right and useful information. They knew what to do even before the unfortunate thing happened. If you do this, not only you can protect yourself during a foreclosure, but you will have a greater chance of avoiding foreclosure by 91%.
2. When you missed some payments to the bank, it is important that you talk to them or you can hire a licensed mortgage negotiator to do the job for you. Banks don’t want foreclosure as much as you do. They do not want to take the home because that means more work for them and there is the risk that they lose more money. So, talking to your bank could make things a little less difficult.
If you can talk to them earlier, i.e. as soon as you receive the letters for missed payments, there’s a great possibility that you get more options during a foreclosure. You may even be able to keep your home because they might give you more time in order to come up with money to pay the missed payments. remember, to going to the bank earlier is the most common reason why most people lost their homes, so, better avoid doing the same thing.
If you have questions, feel free to contact me directly at (818) 203 – 5097
Article Source: http://EzineArticles.com/?expert=Monte_H_Mohr

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Lender Specific “Cash-For-Keys” Incentives

Something worse to know:
As a way to encourage short sales so that investors can cut their losses as much as possible, the following lenders have pilot programs.

Bank of America: Their incentive program is going on right now in Florida and has been very successful. The program pays sellers a greater amount of cash than HAFA. BofA will be making this program available to other states in the future. No word on when it will be available in California, if at all.

Chase: Up to $35,000 incentive is being paid to sellers on a random basis, chosen by their marketing department. Chase recently approved one of our short sales with $20,000 going to the seller. What a bonus for this family hit with a layoff.

Wells Fargo: Wells is offering up to $15,000 by sending letters randomly to delinquent home owners encouraging them to short sale.

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HAFA Changes Effective June 1, 2012

A great read for anyone that is thinking in doing a Short Sale, very important update that are about to take place in the Upcoming weeks:
The Obama administration released its latest version of rules pertaining to HAMP loan modifications and HAFA short sale transactions. The complete explanation is available by clicking here. Only HAFA changes are summarized below.

1. The HAFA short sale program has been extended until the end of 2013.
2. The new changes take affect June 1, 2012, less than two months from now.
3. The owner occupancy requirement has been eliminated.
4. Junior liens will receive $8,500 from the current $6,000.
5. Home owners that are CURRENT on their mortgage payments are now eligible.

READ THIS: The HAFA short sale program is not eligible if the mortgage is owned, insured or guaranteed by FannieMae, FreddieMac, FHA or VA. Also, the HAFA program is not mandated on any loan servicer or investor. However, the Obama administration strongly urges all lenders to participate. Each lender may add additional eligibility requirements before making the seller HAFA eligible.

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Short Sale Fraud? You Betcha!

Happy Spring! Perhaps you’ve heard the phrase, “Spring is in the air” although the San Diego weather these past few days is not quite so sunny. Well, according to the California Department of Real Estate, fraud is also in the air.

Wayne Bell (Chief Counsel for the California Department of Real Estate) and Summer Bakotich (Special Investigator for the Department of Real Estate) just put out this insightful and informative consumer alert and fraud warning against forged and fraudulent deeds.

While you may not be a California dude, this insightful consumer alert provides a comprehensive summary of many of the common types of distressed property fraud that many of us have witnessed over the past few years.

Short Payoff Fraud According to Freddie Mac!

I received a few emails today with regard to what seems to be an update to the Freddie Mac website. More specifically, Freddie Mac has updated one page of their website which discusses what they call Short Payoff Fraud.

I reviewed the site, and am not surprised by either their definitions or their solutions. In a nutshell, here is what Freddie Mac has to say about Short Payoff (or Short Sale) Fraud:

Freddie Mac’s Investigation Unit describes Short Payoff Fraud as “Any misrepresentation or deliberate omission of fact that would induce the lender, investor or insurer to agree to the terms of a short payoff that it would not approve had all facts been known.” The website goes on to explain that “Misrepresentations in these schemes may include the buyer of the short payoff property, a subsequent transaction at a higher price, and/or the selling borrower’s hardship reason used to qualify for the short payoff. In many instances, the short payoff fraud will involve a facilitator, engaged by either the listing agent or the selling borrower, to assist with negotiating the transaction.”

The site goes on to explain that an “A to B, B to C” transaction with a same-day closing would be one possible example of a way that Short Payoff Fraud is committed.

In order to prevent incidents of Short Payoff Fraud, the website describes many techniques that can be employed: carefully reviewing borrower information, ordering a BPO for the property, use of IRS Form 4605-T, etc.

You can read the entire page and review the additional fraud prevention techniques by clicking here.

Quite frankly, I am not surprised by anything that I read on the Freddie Mac site. I am also not surprised that short sale investor buyers are reacting to this information,

As Realtors®, we have always been taught about the extreme importance of full disclosure. Even though many will argue that the FHA has now waived the 90-day flip rule which would acknowledge their awareness of this business practice, it seems that full disclosure to (and by) all parties including the lender is of supreme importance when working a short sale transaction. What say you?

P.S. Please remember that I am not an accountant or an attorney (nor do I play one on tv) and the information presented on this page is provided for informational purposes only.

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Short Sales and Mortgage Debt Relief

Super important read, a must:
According to the IRS, the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence.
Discharge of debt is more specifically defined in Publication 4681. Generally, the Act includes debt forgiven via foreclosure, short sales and principal reduction. For instance, let’s say your mortgage has a balance of $250,000 but the value is just $150,000. The sale of the home would result in a minimum of $100,000 shortage or deficiency. If eligible, the Mortgage Debt relief Act would relieve the seller/tax payer from having to pay income taxes on the deficiency, or discharge of the debt. Prior to the passing of this Act, many homeowners received a 1099 which had to be reported as income.
The Act was designed to help homeowners avoid additional financial hardship created by short sales, foreclosure and mortgage restructuring. Therefore, unfortunately, debt forgiven on investment properties, vacation homes, and business properties does not qualify for this relief.
Like any ruling from the IRS, the Act regarding mortgage debt is also easily misinterpreted. That said, it would be prudent for any homeowner anticipating a 1099 to consult an accountant to determine if the expected reduction of debt is eligible under the Act. Even if you are not eligible under this Act, there are other options available for taxpayers. Consulting with an accountant familiar with property sold or conveyed via distressed sale or foreclosure is imperative.
Misunderstandings of the Mortgage Debt Relief Act is easily found on numerous websites misstating the Act as forgiveness of the deficiency loan balance resulting from a short sale or foreclosure. This is an incorrect representation of the Act.
The Mortgage Debt Relief Act passed in 2007 was scheduled to expire December 2010. Legislation extended some of the provisions and tax savings through December 2012.
It is anybody’s guess as to whether or not further legislation will extend the expiration beyond December 2012. Hopefully politicians will not only extend the expiration but take it a step further to provide eligibility to non-homestead properties.
The short sale process continues to be a long drawn out process therefore any homeowner considering a short sale should consider the consequences of not having the benefit of the tax relief provided by this Act.
Fortunately, some states like California have adopted similar laws on a state level.
Take the time to consult with a professional now while there is time and opportunity to make the most of this valuable relief.
Article Source: http://EzineArticles.com/?expert=Wendy_A_Smith

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The Skinny on Principal Reductions From Bank of America!

A very good read below:
Latest Update: Inquiring minds want to know all about this new principal reduction. Maybe you have heard about it on television, or read about it in the news. Bank of America is offering principal reductions of up to $100,000. Sounds great, right? I bet you want to know where you can sign up to get yours.
But, just like every advertisement, it is important to read the fine print. And, here are the details that you really need to know:
According to the Los Angeles Times, these principal reductions will be made on loans that were originated by Countrywide Financial and packaged into securities. Bank of America acquired Countrywide in 2008, along with their good and bad assets.
According to Reuters, qualified borrowers are expected to receive principal reductions averaging over $100,000. Those receiving the reductions will be over sixty days late on their payments and they may see their mortgage balance cut to their home’s current market value.
Click here to go to the Bank of America site and learn more about this program and how the principal reduction will be calculated. (Pay careful attention to the calculations; you may be surprised by what you see.)
Click here to find out if your loan (or your client’s loan) is eligible for the principal reduction.
If you take nothing else away from this article, please read the bottom line here:
• This is not for Fannie Mae or Freddie Mac loans. You and your loan must be eligible based on very specific requirements.
• Only loans owned by Bank of America or private investors are eligible, and those include mortgages originated by Countrywide Financial Corp.
• In order to qualify you must be 60 days delinquent as of January 31, 2012.
One final point.
According to Bank of America, 200,000 borrowers will be helped through this program. That averages out to 4000 per state. Right now, in San Diego County alone, we have over 35,000 borrowers in active foreclosure (with NODs on their property—who are more than 90 days late on their mortgages).
So, while it sounds like it might be a good deal for some, please encourage your clients not to put all their eggs in one basket.

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Doing Short Sales Is Not That Easy!

Great read below, wanted to share it:
If you think that short sales will help you save yourself from mortgage, then you’re right! However, doing it is not as easy as what other people think. There are a lot of things that you need to know about it, and it would be better if are aware of the things that you can do to avoid these problems. In this article, we will be going through some of the most common problems that you will encounter if you are going to do short sales. Reading this article will not only help you get better information about short sales, but also help you understand the things that will help you succeed in it.
The most common problem that you will encounter when doing short sales is the lack of support from real estate agents. When working on a transaction, a real estate agent receives a commission based on the value of the property. However, if they are working on this method, they will be receiving less commission, and this is the reason why some of them are not eager to work with these kinds of transactions. Since they are going to do the same amount of work, why would they even bother to work on something that will give them less commission, right?
Time is also a very important factor that could affect your short sales. Since these kinds of transactions normally lasts for months, and some people would rather spend more than to wait for such transactions to be completed. In most cases, people who are buying foreclosure properties are investors who don’t really need the property immediately, and they are only looking forward to making money with it in the long run. This fact alone will give you the idea that buyers of short sale properties are lessen, because your list will only be attractive for investors. There are still some buyers who are willing to wait for months, but it is still not the same as selling average priced properties.
Either the seller or the lender could also be a problem during short sales. There are lenders who will not allow a person to sell a property for a price lower than its real market value. Some of them will be asking for a deficiency fee that is payable by the seller in the next few years. As a seller who is under financial difficulties, you, normally, won’t agree to such terms and would simply resort to foreclosure of your property. This is the reason why there are sellers who are cancelling the transaction after agreeing to the terms of the buyer and submitting all the required documents to complete the negotiation.
Article Source: http://EzineArticles.com/?expert=Todd_P._Miller

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Short Sales and Mortgage Debt Relief!

Something here very important that a lot of people are confused about. This is a good read, enjoy:

According to the IRS, the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence.
Discharge of debt is more specifically defined in Publication 4681. Generally, the Act includes debt forgiven via foreclosure, short sales and principal reduction. For instance, let’s say your mortgage has a balance of $250,000 but the value is just $150,000. The sale of the home would result in a minimum of $100,000 shortage or deficiency. If eligible, the Mortgage Debt relief Act would relieve the seller/tax payer from having to pay income taxes on the deficiency, or discharge of the debt. Prior to the passing of this Act, many homeowners received a 1099 which had to be reported as income.
The Act was designed to help homeowners avoid additional financial hardship created by short sales, foreclosure and mortgage restructuring. Therefore, unfortunately, debt forgiven on investment properties, vacation homes, and business properties does not qualify for this relief.
Like any ruling from the IRS, the Act regarding mortgage debt is also easily misinterpreted. That said, it would be prudent for any homeowner anticipating a 1099 to consult an accountant to determine if the expected reduction of debt is eligible under the Act. Even if you are not eligible under this Act, there are other options available for taxpayers. Consulting with an accountant familiar with property sold or conveyed via distressed sale or foreclosure is imperative.
Misunderstandings of the Mortgage Debt Relief Act is easily found on numerous websites misstating the Act as forgiveness of the deficiency loan balance resulting from a short sale or foreclosure. This is an incorrect representation of the Act.
The Mortgage Debt Relief Act passed in 2007 was scheduled to expire December 2010. Legislation extended some of the provisions and tax savings through December 2012.
It is anybody’s guess as to whether or not further legislation will extend the expiration beyond December 2012. Hopefully politicians will not only extend the expiration but take it a step further to provide eligibility to non-homestead properties.
The short sale process continues to be a long drawn out process therefore any homeowner considering a short sale should consider the consequences of not having the benefit of the tax relief provided by this Act.
Take the time to consult with a professional now while there is time and opportunity to make the most of this valuable relief.
Article Source: http://EzineArticles.com/?expert=Wendy_A_Smith

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Is Your Mortgage out of Balance with your Budget?

It can happen quickly.

An expensive car repair, an unexpected hospital visit, a missed week of work – just a few little things and the life you’ve worked so hard to build can feel like it’s tipping dangerously out of balance.

Once the scales turn against you, it can feel like it is impossible to ever tip them back in your favor again. When your financial problems reach the point where they threaten your home, it is difficult to manage the stress. Sometimes it is even difficult to force yourself to seek help.

As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially-challenged homeowners with options to foreclosure, ensure that they steer clear of scams, and help navigate them through the solution that best meets their needs.

Choose to face the challenge with a professional on your side.

I can help you realign the balance in your financial life and tip the scales back in your favor. Call or email me and schedule your free, confidential consultation. We can work together to make sure you end up ahead.

Jean-Jacques”JJ”Dege
CDPE Distress Property Specialist
Direct: 818-203-5097
Email: Foundhomesolutions@gmail.com

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