Your Questions About Foreclosures | foreclosureorder.com

Your Questions About Foreclosures

Your Questions About Foreclosures

Susan asks…

How do foreclosures and defaults work?

As far as I understand if a home owner misses 2 or 3 mortgage payments, his property is put on the county notice of default report. At that point the owner has 2 or 3 months to start making payments. If no payments are made, then the property is up for foreclosure and will be put on the auction. Is this correct? Do I have to pay cash on the auction?

Your Questions About Foreclosures

The Expert answers:

The law varies from state to state.

In California where I am located, the Trustee’s sale gives you nothing but the interest of the lender.

You do not get a guarantee of title.

There are often other liens that are not released in the trustee’s sale that you must pay.

For example tax liens are not released and they now become your obligation. .

Often, unless you really know what you are doing, you do not know if you are buying a loan that is in first position or second position or worse.

If you buy a loan in second position you must pay off the first.

I have seen inexperienced people at these sales buy a loan in second position thinking they were buying a first, only to discover a lender with a loan amount of several hundred thousand dollars in first position that also had to be paid. Then the property was not such a good deal.

You cannot finance these properties. You must pay cash. In order to bid, you must show your cashier’s checks to the trustee to prove that you have sufficient cash to complete the transaction on the spot, if you are the successful bidder.

The previous owners are still in the property in most cases and think that they still own the property, so you must evict them.

Since they think that this is still their home and they think that you are a mere trespasser, this can get ugly.

They can also become very hostile hostile and desrtoy the property. By the time they are through you can be left with nothing but a shell.

If you want to buy forclosures at trustee’s sales, I recommend that you get a great deal of experience and that you attend a large number of trustee’s sales and get lots of practice searching the County Recordrer’s records for liens against the property before you try bidding on one of these properties.

The characters that sell you books and tapes on how to buy foreclosures in most cases have never bought a house at a trustee’s sale in their lives.

Most of them are out of work actors who have learned that they can play the part of rich real estate moguls (even though they are often minimum wage waiters and waitresses) and convince people to pay them thousands of dollars for their worthless books and tapes and seminars on how to buy foreclosures and make millions.

The only people making millions are the characters selling the books and tapes and seminars.

Your Questions About Foreclosures

Joseph asks…

Why is there only 23 states that make sure foreclosures are legal, will the rest follow suit now?

And require the original documents in court to make sure foreclosures are legal?

Your Questions About Foreclosures

The Expert answers:

In the other 27, that job is handled by the Trustee who holds the Deed. They are called “Deed of Trust” states.

Since the trustees are private businesses, they can hire more staff easily to accommodate added volume — which the courts can’t do. Thus, more checking already happens in the other 27 states. [Although I’m sure that some errors happen — errors are inevitable when humans do things.]

Your Questions About Foreclosures

Steven asks…

How do home foreclosures work in Canada?

I’m interested in buying a home, and I keep hearing that my area (Windsor, Ontario) has a high foreclosure rate. How do I find these homes?

Your Questions About Foreclosures

The Expert answers:

Call a realtor and ask about power of sale homes. It is the more frequent route in Ontario when people default on their mortgages.

Your Questions About Foreclosures

Sandra asks…

How much do home foreclosures cost the homeowner?

When the contract with a mortgage company says the homeowner will be responsible for foreclosure costs, how much do those costs usually amount to?

Your Questions About Foreclosures

The Expert answers:

Well, I’m a loss mitigator and they say it costs the lender about 40,000 on average to take a home and resell it over time.

The costs vary but if I had to put a number on it… At default time about $800-$1,200 then if the foreclosure is filed another let’s say about the same. Then if they acquire the home. The realtor fees, maintenance fees, loss of income from the loan -that’s where the bulk of the $40,000 obviously comes in. Don’t forget there are unseen costs like the personnel used to listen to you tell them why you can’t make the payments.

You’ve only got a couple options and moving is the best idea early on when you realize something has changed and it’s not going to get better. By the way, don’t answer every call but do keep in touch- they won’t move to foreclose as fast if you stay in touch! Even if you’ve got a motgage that’s over the value of the property now- don’t worry- just put it on the market and let the lender do an assisted short sale with the new buyer… It will be much better- see my web site if you want more specifics on why you should make a decision quickly, etc. Obviously, if you live in the Chicagoland area of Illinois you can call me -I might be able to help you get this done or at least help you since I’m a Real Estate Broker and a Loan Officer that does this as a community service to help people in these situations on a regular basis.

Your Questions About Foreclosures

Linda asks…

Anyone taking advantage of home foreclosures?

I’ve been hearing advertisments about home foreclosures. Has anyone had a good experience from getting a new home this way?

Your Questions About Foreclosures

The Expert answers:

I bought a home that had been foreclosed, but it wasn’t at a giant savings. I bought mine from a bank, and paid maybe 10% less than the house is worth. I definitely did not set out to buy this type of home and would never recommend focusing solely on this type of home if I was still searching.

Owning banks are trying to recoup as much as possible on a home on which they’ve suffered a loss. They aren’t always looking to quickly cut their losses and run; they might want to sit on a property for months waiting for the buyer willing to pay what they expect.

Find a buyer’s agent, tell them what you want, and they’ll show you the houses that meet your criteria. Foreclosure is not synonymous with bargain.

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Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures

Your Questions About Foreclosures

Your Questions About Foreclosures