Your Questions About Foreclosures | foreclosureorder.com

Your Questions About Foreclosures

Your Questions About Foreclosures

William asks…

home foreclosure HELP where do we go and how do we start refinancing?

Wasn’t the bailout suppose to help homeowners refinance if they were facing foreclosure? How? Was there any agency or website to go to in order to start the process?

Your Questions About Foreclosures

The Expert answers:

The FHA has a loan program you an try to qualify for, although the requirements and terms make foreclosure seem the more beneficial resolution to your situation.

1. You have to show that you can not afford the payments.
2. Your mortgage-to-income ratio must be below 31% of your gross income.
3. Your tax statements must be used to qualify you for the new loan. If you had a stated income loan before, you probably won’t qualify.
4. Any second mortgage must be paid off before the FHA will refinance.
5. You must have a down payment of at least 3.2% of the new loan.
6. Your new interest rate may be .25-.50% below the norm, but you must pay a 1.5% insurance fee, which could raise the costs.
7. If you sell in the next 5 years, you have to split any proceeds with the FHA (up to 90% would go to the FHA).
8. This can only apply to your primary residence.
9. The max loan amount is based on the current market value of your home; your bank must be willing to write down the mortgage if you are underwater.

That’s the best the government can do. It’s quite a bit worse than a regular foreclosure loan or a hard money loan. But if you want to give it a try, contact the FHA. In the meantime, it would make sense to work on other solutions, too, and not trust solely in the government.

Good luck.
ForeclosureFish

Your Questions About Foreclosures

Daniel asks…

What’s the difference between a regular foreclosure and an REO foreclosure?

I’ve been looking up foreclosures at the county office to buy a foreclosure (the ones about to be auctioned). Someone said I should be looking at REO foreclosures. What’s the difference, and how do I buy one and or get info on these?

Your Questions About Foreclosures

The Expert answers:

Step 3 ~ REO = Bank has already foreclosed on the home

Step 2 ~ County Foreclosure Auctions = Could be tax foreclosure or home that bank will be there to be the highest bidder on a home loan default.

Step 1 ~ Short Sale = Pre-foreclosure (Buy from Seller where their bank approves a short payoff on their home loan)

Foreclosure auctions are the absolute riskiest way to buy a home. You are not provided with clear title unless you pay for one prior to attending the auction. Could also have tax liens, utility (water & sewer) liens, materialmen/mechanic liens (contractor), unpaid HOA fees, etc.

Also, you may not be afforded the opportunity to inspect a home prior to bidding on it at auction. Could be a big nasty bucket of worms.

Buy at Step 1 or 3, never Step 2 unless you are an experienced and seasoned foreclosure investor.

Your Questions About Foreclosures

Steven asks…

What’s the difference between bank foreclosure and homeowner’s association foreclosure?

My sister is already facing bank foreclosure but she also just got a letter saying that she will be facing homeowner’s association foreclosure because of unpaid dues. They’re filling a lien against her … I don’t understand the difference … I thought only banks could foreclose.

Your Questions About Foreclosures

The Expert answers:

Nope they both can since ownership is dependent on paying both your mortgage and association fees.

Your Questions About Foreclosures

Ruth asks…

What is the current national foreclosure rate?

I keep seeing in the news that foreclosure‘s are up XX% in the last year. What they never say is what the foreclosure rate actually is. I mean if it’s up to 4% from 3%, that’s a dramatic 33% increase, but it also means that there are still 96% of people still paying their mortgages.

I just want to know what the real number is.

Your Questions About Foreclosures

The Expert answers:

The article I read today said that 1 in 538 mortgages are in the foreclosure process…

So, 0.2% or so. This is an almost 100% increase from last year. Some regional markets are disasters with up to 5% of houses in foreclosure (Stockton, CA is one example).

The news makes it sound a lot more scary, no?

Good luck!

Your Questions About Foreclosures

Robert asks…

How does shorting on a foreclosure work?

Can you explain the process of shorting on a foreclosure? How do the negotiations work with the lien holders? What would be a normal offer for a foreclosure property (as a percent of retail value)? Thanks, first best answer gets my ten points.

Your Questions About Foreclosures

The Expert answers:

First I do not know whether you are looking to sell or buy.

I have assisted with many short sales. From the buyers perspective you must asses the value and make an offer to the lending institution prior to the process of foreclosure.

You need to know that the home-owner is struggling before they go into foreclosure.

You then negotiate the price with the lender and the seller. Getting the lender to take less than the seller owes.

Most generally this is only accomplished if the seller owes more than the property is worth.

You will need cash or a verified line of credit as the lender will not likely loan on the same property again.

I have linked to an article below that is pretty complete.

Single family is harder as it is a smaller portion of the total assets of the lender. Large multi-family and commercial is easier because the lender is out so much money and they are restricted in how much they can loan based on the amount of bad loans they have. Federal law restricts lending institutions from lending more than a certain percentage of good assets.

Often in larger acquisitions you can expect to purchase for as much as 20% less than owed.

Occasionally more depending on the properties condition and other facts.

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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