Monthly Archives: June 2017

Avoid Foreclosure through a Professionally Negotiated Short Sale

Foreclosure is a very dreadful situation for the homeowners in the USA. In this situation, they may end up losing their homes. Upon defaulting on mortgage payments for a stipulated amount of time, the homeowner runs the risk of losing the house. There are many options to forestall such a circumstance and it is important to be informed and aware of the options open to the homeowner. Professional loan modification firms can give clients the right options which they can take in other to either save their homes or let the homes go without hurting their credit ratings.

One of the ways of avoiding a foreclosure is having a professionally negotiated and drawn out contract for a short sale. Many loan modification consulting firms help their clients avoid a foreclosure if they cannot keep up with their mortgages. Allowing a house to go into a foreclosure sale and then having an auction for the house as demanded by law are unacceptable for the homeowner.

Short Sale

In a short sale, the homeowner looks for a buyer who buys off the house completely and the former homeowner can be relieved from the mortgage without hurting their credit worthiness. The lender who is the bank also takes less than the balance owed by the client. This is still a win-win situation for all because the value of houses is never stable and the lenders could eventually lose money.

There are certified distress property experts (CDPE) who prepare the reports properly so that the lenders believe them. There are also loan modification professionals that can assist homeowners in taking the right decisions for themselves which will not hurt their credit ratings.

5 Strategies You Can Use to Profit on Foreclosures

Smart investors find opportunities in every situation, be it good or bad. A foreclosure is a terrible situation for a homeowner; however, as an investor; there are several ways in which this misfortune can benefit you. Many investors miss on deals for lack of knowledge and the notion that the foreclosure process is complex and hard to crack. However, there is only one secret for benefitting from a foreclosure; being knowledgeable of the stage where the homeowner is at and acting from that point. This strategy can be used by a loan modification professional, a realtor or any investor in the real estate market.

  • Buy at a Foreclosure Auction

This is normally the most common strategy that investors use, even though it should be the last option. Making profit at the auction necessitates that you have partners or a buyer ready to buy the property. You should act carefully when facing a foreclosure to avoid making a bid that’s too large, resulting in a loss.

  • Deed In Lieu of Foreclosure

This is a situation where a homeowner volunteers to hand over the house to the bank before the bank is compelled to foreclose on it. After the homeowner surrenders the property, they simply move out. Most creditors also don’t like the entire complex and cumbersome foreclosure process. For this reason, the lender will be willing to pay the homeowner even up to $1000 to convince them to surrender and move out of the property.

  • Stop foreclosure services

As an investor, you can benefit from helping a homeowner retain their home if the temporary situation, say job loss that was deterring them from financing their mortgage loan, has been solved. You can help the homeowner stop the foreclosure process by negotiating a forbearance or loan modification with their lender. You can charge the homeowner for your services by acting as their loan modification professional.

There are a lot of secret strategies that an investor can use to profit from a foreclosure. The more strategies you have mastered, the more the deals you will be able to close and consequently the higher profit you will make.

 

Financial Hardship: What Can You Do When You’re Having Difficulty in Paying Your Mortgage?

Sometimes there can be difficulty in paying mortgage loans. These difficulties may arise when there is a divorce, death, loss of a job or any kind of calamity which affects the finances of the homeowners. However, there are a number of options for those who are finding it difficult to make their mortgage payments on time.

OPTIONS FOR MORTGAGE PAYMENTS

  1. Understand your mortgage plans: there are many options open for those who are defaulting on their mortgage payments. Some people do not understand the kind of mortgage plan which they are having. Loan Modification experts are always available for them to explain different plans available as well as what the plans mean. Some plans are called ARM plans that are adjustable rate mortgages, which means the rates can be adjusted either at the beginning of the payment or after a while of paying the instalments.
  2. Forbearance agreement: this is a special kind of agreement which ensures that there is a suspension on the mortgage payments for a certain period of time. There can either be a 3-month or 6-month suspension from the finance institution to give the mortgage holder some kind of reprieve.
  3. Loan Modification: many loan modification specialists are around who can help one modify his loan payments and rates. Firms such as Loan modification depot , which are loan modification experts can help you get better rates and modify the terms and conditions of the loan to make them favorable and easier to pay.
  4. Selling your Home: sometimes it does not seem feasible to hold on to a particular home because it is way above your pay grade and you cannot manage the payments. In this situation, it is better to let go of the house rather than holding on to it.

 

Tips to Avoid Foreclosures and Short Sales

Having a home and a roof over the head is a basic need for anybody. But losing it due to foreclosures or short sales is unbearable.

The terms foreclosure and short sales are sometimes confusing to many people and they need clarification to understand that these two are different concepts. They are somewhat alike considering the fact that they have to do with mortgage or home ownership, but the concepts are different.

FORECLOSURE

A foreclosure is a situation where a person has defaulted on a mortgage loan payment and cannot keep up with the installment payments. When this occurs, the lender which is the bank then puts the home up for sale. The bank tries to get another buyer for the house. It is important to note that during a foreclosure, the proceedings are taken to court as this is a requirement of the law. When in court, the borrower is expected to appear in court to explain his own side as well as why he is unable to make his payments. When the judge is satisfied, then the home ownership is formally transferred away from the current lender. The bank then auctions the house to get a new buyer for the house which has been officially foreclosed.  Loan Modification specialists can be consulted for more information in this regard.

SHORT SALES

Short sales are also like foreclosures because of the fact that the home is lost by the client when he cannot make the payments. But the difference is that in short sales, the client looks for a buyer for the house and introduces the buyer to the bank. During the court proceedings, the former owner does not have to be in court when the proceedings are going on. Loan Modification attorneys near you could be contacted for more information.

7 Ways to Stop a Foreclosure Fast

Homeowners may sometimes find it difficult to pay the loan due to many unforeseen circumstances, like unemployment or emergency medical conditions. When they have missed their monthly payments, their house may be sold in a foreclosure auction. So, it is very important to find ways to prevent this foreclosure sale; as it may result in the loss of the property and the foreclosure may affect the credit rating of the homeowner.

These are the 7 ways to stop a foreclosure fast:

  1. Refinancing the loan:

Refinancing means lowering the interest rate of the existing loan by taking another loan. This can help in reducing the monthly payments, thus increasing the cash flow.

  1. Forbearance Plans:

This is a short term agreement between the borrower and the lender when the borrower is suffering from a sudden financial crisis. This agreement either suspends the payment for a certain period of time or reduces the amount of payment or the interest for a short period of time.

  1. Deed in Lieu:

This deed helps the borrower get rid of all their obligations to the lender by signing an agreement, stating that the homeowner has transferred the ownership of the house or property to the lender.

  1. Deed for Lease:

This deed allows the homeowner to stay in the house on rent after transferring the ownership of the house to the lender, for a certain time period.

  1. Short Sale:

To avoid a foreclosure, the bank may accept the amount that is less than the total amount payable. Short sale, therefore, means that the borrower is ‘short’ of the amount to be paid.

  1. Loan Modification:

Loan modification service providers help in changing the terms of the loan permanently so that they become more favorable to the borrower. For this, the borrower needs to inform the lender of their current situation. There are many loan modification companies that can help homeowners in modifying the terms of their loans.

  1. Bankruptcy:

Once the bankruptcy is filed, the government and the law prevent the collectors to collect money. This is only temporary and once the financial crisis is solved, the borrower needs to repay the money to the lender.

 

 Why a Mortgage Forbearance Plan Is Not Always a Good Idea

 

Mortgage Forbearance Plan

In a mortgage forbearance plan, the borrower does not have to pay for a certain period of time. This gives the borrower enough time to stay in their house and find solution until their financial condition improves. Whenever a borrower is going through a financial crisis, this is the first option that will be provided by the lender. This plan is helpful usually when the borrower suddenly faces a financial crisis due to medical emergency or sudden loss of income; and the borrower is confident that they will be able to resume making the payment within a certain period of time.

What to do?

But before opting for the mortgage forbearance plan, the borrower must search or consult someone for more info, as there are many more options available and these may be more beneficial as compared to the mortgage forbearance plan. The borrower must understand that this plan is temporary and they will have to pay the lender as soon as the time provided by the lender ends.

The borrower must also know all the risks associated with it. For example, after the forbearance period is over, they may need to pay for the interest on the forbearance period along with the regular payments. Also, their credit score may go down due to the forbearance plan.

So the best option is to consider some other options as well before going for the mortgage forbearance plan. Some other options include:

Loan Modification: here the current loan terms can be modified according to the borrower, making the loan repayment easier for them. For this, one may consult a loan modification lawyer or a loan modification specialist.

Short Selling: The borrower may sell the house at an amount lesser than the amount due. This option is for those borrowers who are financially distressed.

 What do Homeowners Need to Know When Facing a Foreclosure?

A foreclosure is a process by which the lender can recover the balance amount from the borrower when the borrower is not able to pay, by either taking the ownership of the property or selling the property as a loan security. Usually, the borrower is supposed to give the lender a security interest to secure the loan.

The lender can initiate the foreclosure procedure on the basis of the time specified in the agreement document between the lender and the borrower.

The two main types of foreclosure producers:

Judicial foreclosure: The judicial foreclosure is initiated by the lender against the borrower by filing a lawsuit. Here, the sale of the property that is mortgaged takes place under the court’s supervision. The decision is given after pleadings are made.

Non judicial foreclosure: This is also known as foreclosure by power of sale, which comes into power if the power of sale clause or the deed of trust clause is included in the process of mortgage. In this foreclosure process, the lender or the mortgage holder can sell the property without the need of court supervision.

Impact of Foreclosures:

Foreclosures can have negative impact not only on the homeowners but also on many other aspects. For example, when the rates for foreclosures increase, they may impact the sale value of the property neighboring the foreclosure houses. Thus we can say that a foreclosure impacts the neighborhood as a whole and not only one house.

Ways to avoid a foreclosure:

There are some options that can help in avoiding foreclosure, including forbearance (where a certain time limit is provided to the borrower to make the payment before going for a foreclosure), loan modification options (where the loan terms are modified according to the convenience of the homeowner), Deed-in-Lieu, bankruptcy and sale of the property.

7 Ways to Stop a Foreclosure and a Strategic Default Option

Strategic default option comes into play when the borrower stops making their mortgage payments even when they can afford these. They usually stop doing so when the value of the properties decreases. There are some disadvantages of the strategic default option, like difficulty in getting a new loan, dropping of the credit score and other future housing related issues.

Therefore, they must consider other options to stop the foreclosure instead of the strategic default option.

 

Here are some ways to stop a foreclosure:

  1. Negotiate with the lender:

It is very important to explain your financial condition to your lender. Try to communicate with the lender in the best possible way and inform them about your situation. Make them confident that you will certainly do something about the situation as soon as possible.

  1. Borrow money:

Check the amount needed to prevent the foreclosure. You can borrow from your family or friends to stop the foreclosure for that time.

  1. Forbearance:

This is an agreement between the borrower and the lender in which the lender either temporarily suspends the payments or reduces the monthly payments for a specific period of time.

  1. Loan Modification:

The loan modification option is also available and for this, the concerned bank must be approached. You just need to explain your current situation and if the bank is convinced, they can make changes in your loan agreements. A loan modification professional can be of great help and can assist you with the whole process.

  1. Deed in Lieu:

In deed in Lieu, the homeowner or the borrower can transfer the ownership of the house to the lender by signing an agreement; thus relieving the borrower of all obligations. This can prevent the damage to the borrower’s credit score to a great extent.

  1. Deed for Lease:

This means that after transferring the ownership of the house, the buyer can again rent back the home. In this agreement, the homeowner can stay in the house on rent for a specific period of time.

  1. Sell the House:

If, in between the foreclosure process, the homeowner or the borrower receives an offer to sell the house, they can sell it at a price higher than the debt owned by the homeowner.

 

How Does a Forbearance Plan Can Help Homeowners Avoid Foreclosure?

Forbearance agreement is a short term agreement between the lender and the borrower which can be very beneficial to the lender, especially during financial difficulty. In this agreement, the foreclosure can be delayed. Foreclosure is a legal process in which the lender can recover the balance amount from the borrower.

Foreclosures can happen when the lender is not able to pay the mortgage loan due to some unforeseen circumstances, like medical emergencies or unemployment. Foreclosure is a costly process even for the lender and thus it must be avoided.

It is essential to form a forbearance agreement where the lender can delay the foreclosure for a specific period of time. The lender can either temporarily suspend the payment or reduce it for a certain amount of time.

Terms of Forbearance:

  • The agreement must be negotiated between the lender and the borrower, and must be accepted by both parties.
  • The lender may decide whether he or she wants to approve temporary suspension of the payment or reduce the payment amount.
  • There are many other forbearance options, like reducing the interest rate of the borrower on the temporary basis or the borrower may have to pay only the interest and not the principle.

Conditions for receiving the Forbearance:

  • Explaining the lender the exact situation and asking for his or her approval for the forbearance.
  • Providing financial records.
  • Being aware of all the details related to the forbearance agreement.

It must be noted that people may get confused about the difference between a loan modification service and a mortgage forbearance. The difference between the two is that a mortgage forbearance alters the terms related to mortgage for a certain period while a loan modification permanently changes the terms of the mortgage. The only similarity between the two is that both help in avoiding foreclosures. Taking advice of a loan modification expert can be of great help before deciding which option to opt for.

Know Your Options to Save Your Home from Foreclosure

Foreclosure is a situation where one’s home is taken away from him and sold by the lenders due to the fact that he had been defaulting on his loan payment. When a person who is on a mortgage plan is unable to make his/her mortgage payments, the home is foreclosed.

A foreclosure is a gradual process and there are many viable options for the homeowner to save his home. These options when activated could lead to the home being saved from a foreclosure.  Some of the reasons why people default on mortgage payments include death, divorce, unemployment, ill health and any other factor which could cause the homeowners lose their wealth.

OPTIONS TO SAVE YOUR HOME FROM A FORECLOSURE

  1. Forbearance agreement: this is a special kind of agreement which people on mortgage payment plans can enter into. In order to make such an agreement, you will need the services of a competent loan modification specialist. The agreement will suspend the collection of the installment payment on mortgages for a certain period until the person is able to pay the money again. The reprieve might be given for 3 to 6 months or even as much as 12 months in some cases. A well-known loan modification expert can help a lot in this regard.
  2. Special Indulgent: a client can seek indulgence and reprieve under special circumstances based on their situations. For instance, those who were civilians and later joined the military get some form of indulgence and reprieve when they cannot pay their mortgage loans.
  3. Loan Modification: in cases where the client is finding it really difficult to pay the loans, he can rework the payment plans. He can get revised and easier conditions surrounding their loan repayments.