Homeowners: What You Have to Know About Foreclosures

Hey guys passed by this article and thought you might find it interesting!

Are you a homeowner who is facing foreclosure? Even if you aren’t facing foreclosure yet, are you suffering from financial difficulties that might result in it? If so, now is the time to familiarize yourself with the process. Foreclosure can be scary for homeowners, but it is possible to protect your self by understanding what will happen, what you may do, and what your rights are.

Mortgage lenders, which are usually banks, need to and will present you with proper notice. Actually, you will obtain multiple written notices and telephone calls. Foreclosure should not come as a surprise to you. Neither must the eviction notice that might later arrive. As soon as you begin receiving calls or letters from your financial lender, it is crucial to take action. As for what action it is best to take, that leads to an additional crucial fact.

Banks wish to steer clear of foreclosure just as much as you do. Unfortunately, a lot of homeowners are actually surprised to learn this. Quite a few times, financial lenders lose money when selling a foreclosed property. For that reason, you ought to speak directly together with your financial lender. When performing so, have this meeting in person and meet with a high-ranking official, including the chief loan offer or the branch’s president.

Since banks need to avoid foreclosure whenever possible, it is critical to go into detail about your financial situation. Are you only experiencing temporary problems? As an example, did you suffer an injury which will put you out of work for a couple of months? Had been you laid off, but are you actively trying to find a job now? If so, your financial lender may possibly be willing to work with you. In case you can prove that you’ve intent to get your mortgage back in good standing, your lender may well temporarily accept smaller payments.

As for the foreclosure proceedings themselves, the process will all depend on the state in which you reside. Regrettably, this is a reality that a lot of facing foreclosure don’t know or don’t take into consideration. In case you intend to seek professional support, from either a housing counselor or an attorney, it really is important you choose a professional who is familiar together with your state’s laws on foreclosure, as they do vary.

For example, in New York, judicial and non-judicial foreclosures are permitted by law. A judicial foreclosure is where the lender need to file an official complaint against the borrower, which would be you. This complaint should be approved by the local courts. A this point in time, the borrower may well be given 1 extra chance to pay the quantity in delinquency. If not, the property is going to be sold.

As for non-judicial foreclosures, financial lenders should have entered a particular clause in the mortgage agreement. This clause states that the borrower, which would be you, authorizes the sale of the property when delinquency occurs on payment. Normally, non-judicial foreclosures are not utilized frequently and some states even prohibit them. That’s why it’s important to know all of your state’s foreclosure laws.

When the foreclosure method has started, now is the time that you should start seeking other arrangements. Unless it is possible to come into a large amount of cash and rebuy your property, you most effective option may be to move. Although you’re not needed to leave your home until you’re served an eviction notice by the lender or new property owner, it really is a procedure that it is best to begin planning and preparing for. Where do you would like to live? In case you will rent an apartment, how do you intend to pay for the security deposit? These are questions that you need to have answers to.

As a recap, foreclosure laws vary by state, banks wish to avoid foreclosure and multiple notices will likely be sent. For that reason, foreclosure will need to never come as a surprise. For extra information and facts on foreclosures, contact a HUD (United States Department of Housing and Urban Development) approved counselor, your lender, or an attorney, but do so appropriate away.

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Why is the Loan Modification Process So Frustrating?

Happy New Years To you all! Heres our first article post of 2011!

Is it feasible to figure out the loan manipulation method and actually beat the banks at their own game? Fortunately, yes – it is feasible and it is not even that hard to do! What is the reason that some homeowners get approved while other seemingly deserving borrowers are denied? It’s not a mystery, and it does not cost lots of cash, and luckily the giant majority of homeowners can do it themselves. Winning the loan manipulation game boils down to one thing – knowledge and preparation. Sound simple? Well, give it some thought for a minute – most people spend more time studying for their driver’s license examination than they do learning how to complete their loan manipulation application correctly! Now, it’s important to know the rules of the road, but it’s also important to know the rules of qualifying for a loan mod.

Why does the loan manipulation method have to be so frustrating? In fact, it sometimes looks like the banks are intentionally making it so difficult that many borrowers simply give up and end up losing their home. Why wouldn’t your bank need to keep you in your home, making every month mortgage payments – even reduced ones – in lieu of going to the time, trouble and expense of foreclosure? There are lots of reasons that borrowers are not approved for a loan workout, but the most common one can be fixed!

There are standard guidelines for approval as well as a standard loan manipulation method which must be followed in order to have a nice chance at approval. If you don’t know the guidelines or the method, then you are simply taking a shot in the dark. Saving your home is definitely worth a couple of hours of learning the fundamentals, and luckily there is great resource guide and computer software that will report the entire method and provide the calculations you need when you complete your loan manipulation application. If you know ahead of time what your every month income, every month expenses and cash in the bank ought to be in order to qualify, it is possible for you to make adjustments to your budget before your lender reviews it. This will give you the game winning strategy and confidence to make sure that your lender gives you the best loan workout available.

How To Stop A Foreclosure – Several Practical And Effective Ideas

There are simple ways on how to stop a foreclosure. Before you aim to take refinancing schemes and other programs, you should first seek available assistance from the lender or seek assistance from a lawyer.

Harassment From Lenders

The economy inevitably takes its bad turn at times when we are not very well prepared. If you have an outstanding home loan when the financial crisis recently hit, it is logical that you are now worrying because you are defaulting on your loan repayments. For sure, your main concern now is how to stop a foreclosure that may possibly hit you soon.

You may have taken an attractive mortgage package when you secured your home loan from a bank. However, you may now be finding it hard to make both ends meet so you may not be able to shoulder the mortgage repayment. It can even be a harder struggle if the maturity of loan is still many years away. During your initial delays in loan repayments, your lender may already be bombarding you with threatening letters of reminders or uneasy phone calls.

Work For Better Terms With The Bank

Most lenders think they can force you to shoulder mortgage repayments if they threaten to sue you or to foreclose your property. If your mortgage lender is already harassing you due to your delayed payments, it is high time you do something about it. Do not hesitate to approach the bank in hope that you can negotiate for ways on how to stop a foreclosure. You may be surprised that most banks are willing to sit down and talk about possible measures to keep you afloat.

If you are looking for ways on how to stop a foreclosure, it will certainly not help if you will promise money that you do not actually have or if you avoid their calls. You can humbly ask bank personnel about any available assistance that they can offer and provide you as you aim to find appropriate ways on how to stop a foreclosure. In most cases, such lenders are amicable to offer adjustments on rates and on monthly amortizations so borrowers can survive amid economic crises. However, be ready to incur a bad credit status for several years.

Should You Seek A Lawyer?

With your troubled financial status, it may not be practical to hire the services of any lawyer. However, if you need one, seek for a lawyer who is willing to look into your situation and charge you less for his/her services. If the mortgage lender is not willing to assist you on how you can prevent foreclosure, it is time to seek a lawyer’s help. Most of the time, banks do not readily disclose any provision of the law that aims to help borrowers find better terms to avoid foreclosure.

Find and hire an attorney who specializes on financial woes of home borrowers. He must be able to help you negotiate for a possible restructuring of your home loan. The process can still erode your credit status for many years, but it is still much better than losing your home.

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Home Affordable Modification Guidelines – Knowing the HAMP GUIDELINES Part 3

We continue our review of the guidelines for the government’s Home Affordable Modification program. These series of articles are to provide you a brief insight to the lender/servicer guidelines for underwriting and reviewing the HAMP guidelines.

Documenting your income

The supporting documents used to review your application for a loan modification must not be older than 90 days (3 months). Once you send in your documents the date the lender/servicer receives them is considered the 1st day. It is important for you to call and make sure your information was uploaded to your account. If you are approved for the trial loan modification you will not have to refresh the income documentation during that period.

Reasonably Foreseeable or Imminent Default

If you are still current on your mortgage but are facing a possible hardship and feel you are at risk of defaulting on your loan you can apply for a loan modification under the HAMP program even if you are 1 month behind. You must contact your lender/servicer and ask to be reviewed for the HAMP program. Each lender/servicer is supposed to have guidelines in place to review current homeowners for the HAMP program for example the MHA handbook. In reviewing you for a loan modification the servicer should do the following:

•Evaluate the hardship as well as the condition and circumstances
•Review your financial situation including assets, liabilities, income and other monthly obligations. (pull credit to verify debt).

All information must be documented and verified, the lender/servicer must document in its servicing system and or mortgage file the basis for their determination and that mortgage payment default is imminent and they must retain all documentation to reach this conclusion.

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Home Affordable Modification Guidelines Part 2

Below is an article which I found interesting. It is the continuation of Bank of America Testing New Short Sale Program. This article will cover some basic information about the GMD section of the Request for modification affidavit form.

Government Monitoring Data Section of the RMA (Request for Modification Affidavit)
Collection of GMD. If a borrower completes the RMA or Hardship Affidavit form 1021 by mail or internet borrower’s can read the disclosure and choose to provide the information asked or not.

If the borrower is in a face to face interview or even over the phone, the servicer must read to the borrower the disclosure found beneath the Information for Government Monitoring Purposes section found on the RMA or Hardship Affidavit. After reading the disclosure to the borrower the servicer should ask if they wish to provide this information. The servicer also must read the race, ethnicity and sex categories and options from the form itself and check off the correct boxes.

In addition if the GMD information was provided in writing on a previous RMA the filled in application will supersede the verbal regardless of the date on the original RMA.

Borrower Declines to Provide GMD

If you choose to not provide the GMD information the servicer may not refuse to accept the RMA (request for modification affidavit). You do not need to provide this information and if so you will need to check the box stating you wish not to furnish this information. If you refuse to check any of the boxes the servicer has the right to make a note in your file.

GMD from Observation or Origination

If a borrower declines to provide GMD, the servicer should attempt to provide the information based on visual observation, information learned from the borrower or surname. The servicer must note on the form that the information is based on servicer observations. Servicing staff should be provided with training and job aids (e.g., desk references, scripts and, where feasible, system prompts) to supply this information based on visual observation or surname.

Alternately, if the servicer has reasonable access to GMD supplied by the borrower at origination and the borrower(s) remain the same, the servicer is required to provide that information.

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Bank of America Testing New Short Sale Program

If you have failed to qualify for both the Home Affordable Modification Program HAMP and the Home Affordable Foreclosure Alternative Program HAFA, Bank of America is launching their own test program for alternative options. According to a Bank of America Executive Matt Vernon, borrowers who are heading fast to foreclosure after attempting to save their home, an alternative should still be offered if they are still facing a “true hardship”.

How many people may be tested for this possible new program? Roughly 2000 homeowners in varies states will be targeted. The new short sale program would be in effect, a no-doc short sale. The sellers would have to already have submitted everything and be in reviewing of the HAMP and HAFA review process and if they pass the pre-screening process. Bank of America will assign a short sale specialist to help the borrower and their real estate agent market their home for 120 days, very similar to the HAFA program.

Also as an added incentive, Bank of America will not hold these borrowers responsible for any deficiency, the investors who own the loans will have had already given their approval of the short sale program. Just as the HAFA program provides $3000 in relocation assistance and 6% to the agents, and will also require a deed in lieu of foreclosure should the property still not sell.

If you are wondering what states this test program maybe available, this program is being tested in the states with the most foreclosures going to market. The state of Florida, California, Nevada and Arizona, 2000 may not seem like a lot considering the amount of foreclosure in these states, but just in the first quarter of 2010 Bank of America completed over 25,000 short sales alone.

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Foreclosure Relief Available for Year 2011

Many homeowners who have had a rough year in 2010 are hoping to find foreclosure relief for the Year 2011. The onset of a new Congress and the advancing promise of changes in the foreclosure laws open the doors to hope for many homeowners. When you are facing foreclosure, the possibility of a change in the law can make a world of difference. The newly elected officials to the White House will have their jobs cut out for them when it comes to helping people who are facing foreclosure.

Individual states have their own laws that affect homeowners, which makes it very hard for the Congress to come up with a new set of guidelines concerning foreclosure on property owners. Right now it is best to avoid foreclosure procedures until the Congress, President and the Attorney Generals of the different states come to a meeting of the minds with laws. It is true that President Obama and the Democratic Congress come up with a government bailout plan in order to give the homeowners relief. The problem is that each state has their own laws which may interact in an adverse manner when it comes to foreclosure policies.

The Year 2011 hopes to be favorable when it comes to relief for the homeowner. The economy has started to pick up with more jobs available making it easier for the homeowner to avoid foreclosure. No one can know for sure what might happen but it is starting to look like with the economy improving, relief is just around the corner. The bailout program that was put into place requires the homeowner to be employed in order to take advantage of the program. The perspective that jobs are once again becoming available will hopefully prevent foreclosure for those who were facing with it. Perhaps many homeowners will be able to avoid foreclosure altogether.

The state of Texas has two different laws which affects homeowners. The Texas Attorney General is working to find a solution to the Non-Judicial Law which prohibits the homeowner from being taken to court. This policy limits the homeowner’s ability of going to court and bargain with the lender to avoid foreclosure. Unfortunately, the homeowners who have already signed an agreement with their mortgage to be bound under the Non-Judicial Law are still held under that law. The New Year 2011 may help homeowners to overcome this law and find a solution to their problems. This would give homeowners foreclosure relief in the Year 2011 if the lenders would accept an amendment of the law immediately.

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Selling Your Home to Avoid Foreclosure

Nothing is more detrimental to you credit ratings as foreclosures and late mortgage payments are. If you have fallen behind on your payments and are about to face home foreclosure, you should consider using a short sale to sell the home and avoid foreclosure.

One of the most common queries regarding foreclosure is whether the person can sell the home even if he is going through the stage of foreclosure.
Short sale basically implies selling the property for much less than the amount owed with the permission of the lender. It is not as difficult as it seems and is considered as among the best forms of foreclosure help available. There are three steps to close a short sale and these are short sale pre-qualification, marketing property and last are to close the short sale.

In the first step you contact the lender and explain your financial situation. You should try to avoid the foreclosure process by selling your home. Majority of the lender give a short sale application that can be emailed or faxed. The application will tell you what all documents you require, if you are considering a short sale as an option. Some of the common documents that are required are bank statements, tax returns, paycheck stubs, hardship letter etc. These items will show that you are not in a situation to repay the loan.

Once you are done with the pre qualification for short sale, you will then have to market the property to find a qualified buyer. For this you have to hire a realtor who can advertise your property in the local newspaper or other mode of advertisement.

Your aim is not to make a profit here but to cover up the costs that are owed to the lender. You are basically trying to stop foreclosure from happening. In some states the procedure of foreclosure can be quiet lengthy, so you should not give up using a this technique to avoid foreclosures only because you are unable to find a buyer immediately.
Once you have decided to whom you should sell your house, you will submit the purchase contract and the buyer’s credential to the lender. If lender accepts then the deal, it is sent to the company title which further facilitates closing of the escrow account.

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Short Sale Vs Foreclosure – When Foreclosure Is a Bad Idea

Other than life-threatening diseases and death of a child, bank foreclosure on your home can be one of the most challenging situations you can experience in your life. Surviving the loss of a home is a situation most folk will find extremely difficult. Being left with no equity, a bad credit record and no home is not an outcome anyone would relish.

So if you are in financial trouble, realize that ignoring the predicament you are in, will achieve absolutely nothing. The sooner you face up to the reality that you could be in danger of losing your home to foreclosure, the more likely your odds are of avoiding foreclosure. By actively taking responsibility in good time, you’ll be able to achieve the best situation and do as much damage control as possible.

Mortgage foreclosure can be avoided in a number of different ways. Regardless of your strategy, the ways to avoid a foreclosure generally center around achieving mortgage loan affordability, but just by taking different approaches such as refinancing or earning more, or modifying the loan. Before you evaluate which home saving strategy is best, it is imperative that you calculate your budget. This will help you figure out the most appropriate approach.

If it genuinely seems that you can’t afford to keep your home, then it is far better to face up to this before you have major financial problems, rather than to try ignore the fact. Why, you might ask? You see, if you don’t do something quickly to sell your home whilst you still can, then here’s what the bank is going to do:

1. Your lender will terminate your lending contract with foreclosure.
2. Your home will be sold on auction.
3. You will be stuck renting accommodation for the foreseeable future as your damaged credit record will prevent you from entering into a purchase agreement for a new home.
4. Your credit rating will reflect these circumstances, an undesirable state of affairs, if you want to get back on your feet.
5. The bank is going to be completely self-serving and you most likely will suffer a significant loss financially, more than necessary.
6. You won’t have saved up money to weather this financial crisis.
7. This can be very stressful. The damage that stress of this kind leaves can be more severe than the actual monetary set back.

In a situation like this, it is better to consider a short sale, as the damage to your credit record will be far less than a foreclosure. Short selling is when you sell you home for less than the amount you owe on your mortgage. You need your lender’s permission for this. Most lenders will look at your situation and will definitely consider a short sale. Remember lenders don’t want to foreclose if it can be avoided. They are not in the business of real estate but in the business of lending money. A short sale is often the most sensible option for them.

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Will My Lender Foreclose While I Am Applying for a Mortgage Loan Modification?

Facing foreclosure on your home and wondering if a loan modification will stop the process and help you keep your home? Once the process has begun is there anything you can do to delay the foreclosure in order to seek another solution? The Treasury Department has set up standard guidelines for just this type of situation-so you need to know what could happen and how to make certain that you take advantage of every opportunity available to save your home.

President Obama wanted to be certain that before a home goes to foreclosure the bank has explored every option to try to keep the borrower in their home. That is why under the government plan called HAMP, banks are required to delay the foreclosure while the homeowners loan modification application is being reviewed for eligibility. Although the clock keeps ticking, the home cannot be sold out from under you as long as your loan mod application is submitted and being reviewed. That is why it is so critical to understand what your rights are under the federal plans and just how you can take advantage of these home rescue options provided by the government.

It is critical to contact your lender as soon as possible and specifically request review for HAMP-Home Affordable Modification Plan. You will need to prepare and submit a three page application that includes your financial statement detailing your income and expenses and a hardship affidavit. This form is called a RMA-Request for Modification and Affidavit. Once you submit this form, your file will be noted and held from any further foreclosure activity until a decision is made on your loan modification. It is very important to stay on top of the application to make certain that all the required documents have been received and that your file is in review. Of course, if your application is reviewed and it is determined that you do indeed qualify for HAMP, you will be offered a loan mod and your foreclosure will be stopped.

How can you stop foreclosure and be certain that your loan modification application has the best chance of approval? The only way to take control of the situation is to understand just what it takes to get approved for a loan workout, then prepare and submit your application correctly. You can use the very same formula that your lender will use so that you will be confident that you fit right into the guidelines for HAMP. Remember, the information you provide on your financial statement will be reviewed and a determination made based on that information-so it just makes sense to fine tune your information so that you have the best chance of success.

Susan Gregory is the author of two resource books for homeowners and real estate professionals, The Complete Loan Modification Guide Kit and The Stimulus Book-HAMP & HAFA Edition. She also teaches workshop training classes for the federal programs to help real estate professionals assist homeowners with home retention and exit strategies. The Complete Loan Modification Guide kit provides a valuable resource for borrowers that includes a step by step handbook, required forms, and a loan mod software program that mimics the federal approval triggers for loan modification. An advocate for homeowners, Susan also offers free 30 day email support for all of her clients who purchase her publications. Thousands of homeowners have been helped using these materials.
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