Your Questions About Foreclosures |

Your Questions About Foreclosures

Your Questions About Foreclosures

Jenny asks…

How is Florida real estate getting better?

Florida is one of the states most affected by the mortgage crisis. The most accessible loans available in this market are FHA loans. After qualifying for an FHA loan I initially thought the difficult part of being a first time home buyer was behind me. However, it would seem that the journey has just begun.

Most communities do not meet the requirements for FHA approval. The most common reason is the high foreclosure rate. The community of interest must also be current on HOA fees, there must be a certain percentage of home owners to investors and other such conditions must be met for an FHA approval. With all these regulations and restrictions associated with an FHA loan it is not difficult to imagine that even this type of loan may become obsolete. The dilemma now is not whether you will exceed your budget but whether the available homes within your budget will qualify for the loan type.

With all fairness I am obligated to mention that conventional loans or cash sales do contribute to recent sales. The requirements for a conventional loan in Florida are not realistic. Where some borrowers may be able to contribute 10% down payment the newly required 25% down payment to say the least is a stretch on nearly anyone’s budget not to mention the budget of a typical first time home buyer.

Investor are buying at extremely low prices with cash and conventional loans. FHA loans cannot compete with these investors due to all of the restrictions and rules that they must adhere to. The increasing of number purchases by investors in a neighborhood/community further limits opportunities available to FHA first time home buyers. As a result investors and not “home owners” are benefiting from the low market rates.

I have concluded from my observations that the so called homes sales increase doesn’t fully disclose the underlying problem. The true rate of available homes and foreclosures properties are not represented in the market. Banks are slowly trickling inventory into the market while the excess or “ghost inventory” remains hidden in their vaults in an effort to manipulate market values.

I have also noticed another disturbing trend. Yes, single family homes, townhouses and condos are at an all time low. However, where FHA approval is not available home prices are much lower than market values. One would initially think this is in their best interest but these homes are primarily only available to investors due to requirements and restrictions placed on FHA loans. Where homes are FHA approved this results in homes being listed and maintaining the inflated prices. The limited homes available especially ones built in 2005 and 2006 are in high demand. As a result a new type of bidding war is ensues. Potential home owners of low to moderate income cannot compete with investors of whom recent sales can be attribute to.

I expect home prices will continue to fall. Do you predict a change in the way the real estate market and lenders addresses these new issues and it’s direct connection to lower home prices? Do you think the government will relax some of the FHA regulation to combat these issues? (which in itself has pros and cons associated with the outcome for home buyers). Finally do your foresee a new program/stimulus that will assist first time home buyers in the near future once this $8,000 tax credit expires?
I live in Pompano beach area. I thinking of buying in palm beach county. That market is over saturated with town homes and condos…. Over saturation can be a good or bad thing.

Your Questions About Foreclosures

The Expert answers:

Wow, you should be a writer!! Lol The way you typed this; your wording, ect is great!

Yes I do agree that here in FL it is very hard to obtain a loan & have all other requirements met as well. But the truth is…if you search hard enough & have a great real estate agent you will be able to find a good home that will except FHA loan & meet all the requirements. (I am going through the same thing right now in FL as well.) What part of FL do you live in?

Your Questions About Foreclosures

Mandy asks…

Do you agree with the following answer I found on this site?

Mortgage banking meltdown: There’s no valid reason but that America’s corporate politicians are subservient to Wall street and the super rich.

The Bush administration on Friday announced plans for a massive and unprecedented federal bailout of the US banking system. In separate appearances Friday morning, Treasury Secretary Henry Paulson and President Bush announced a series of measures to shore up collapsing financial markets and called on Congress to pass legislation next week to use, in Paulson’s words, “hundreds of billions” of taxpayer dollars to buy virtually worthless mortgage-backed assets that cannot be sold on the market from banks and other financial institutions.
Paulson said he would meet over the weekend with congressional leaders to lay out the details of the government plan.
With this plan, the full cost of the immense debts piled up by the banks will be imposed on the American people. It will shift the banks’ liabilities onto the federal government, sharply increasing government budget deficits and the US debt, a process that can only further erode the creditworthiness of the United States and place a bigger question mark on the value of the US dollar.
The immediate line-up of both parties and the media behind the bailout plan for Wall Street stands in the starkest contrast to their indifference and inaction in regard to the plight of millions of American working people, who face a rising tide of home foreclosures, layoffs and sinking living standards. When it comes to the social needs of the people, the universal cry from corporate America and the two parties is, “There is no money,” but when the fortunes of the financial elite are threatened, the full power of the government and unlimited resources are marshaled virtually at a moment’s notice.
There was no suggestion in the statements of Bush and Paulson of any relief for the working class—nothing to stop home foreclosures or help those who have already lost their homes. Rather, hundreds of billions—and more likely trillions—of dollars in public funds will be used to prop up the banks.
The resulting bankrupting of the government will be used to justify a brutal assault on what remains of social programs, including Medicaid, Medicare and Social Security, and demand even greater financial “sacrifices” from workers, whether the next administration is headed by Obama or McCain. Nothing could more clearly demonstrate that behind the façade of American democracy there stands a dictatorship of big business.
In his statement, Paulson said “comprehensive” action was needed “to address the root cause of our financial system stresses. The underlying weakness in our financial system today is illiquid mortgage assets that have lost value as the housing correction has proceeded.”
This is a lie. The root cause of the crisis is the unbridled parasitism of American capitalism, which over a period of decades has dismantled huge sections of industry in order to reap super profits for the rich by means of financial speculation and fraud, based on a colossal buildup of debt. Now the bill is being passed to the American people.
Bush, flanked by Paulson, Bernanke and Cox, called for a government bailout of Wall Street in the name of “our system of free enterprise.”
“There will be ample opportunity to debate the origins of this problem,” he said. “Now is the time to solve it.”
There will, in fact, be no debate or discussion. Nobody will be held accountable for the greatest financial scandal in world history. There will be no penalties. No one who made tens and hundreds of millions from the plundering of America will be forced to give back a dime.
All of the financial resources of the United States are being placed at the disposal of Wall Street and every American citizen, without being asked, is being given the responsibility for covering the debts of the richest people in the country.

Your Questions About Foreclosures

The Expert answers:

Yes, I obviously do, that was part of several of my answers concerning the financial debacle and an excellent analysis by Barry Grey of the World Socialist Web Site, my preferred site for straight talk

Your Questions About Foreclosures

Ken asks…

Received notice of possible Trustee Sale/Foreclosure/Loan Mod on home I’m renting, should I be concerned?

There was an advertisement mailed to the home I’m currently renting addressed to “current resident” and outlined that the home is scheduled for Trustee Sale on Nov. 3rd by a law firm on behalf of the lender. I did some digging online and called the law firm to confirm and it’s true. We just moved in on July 17th – 3 months ago and signed a 2 year rental agreement with a realty company that’s acting as a third party handling the renting process between us and the owner.

The property manager nor I had any idea that the home was in the foreclosure process and that there is an auction scheduled at the local county court for November. He contacted the owner and the owner stated that they’re going through a ‘loan modification’ and are ‘confident it won’t be foreclosed on’. Should I believe this without any doubt and carry on with life as though this never happened? Should I be concerned that the bank may in fact choose to sell the property anyways? My mother told me to hold onto the rent that’s due Nov. 1st until Nov. 4th in case the home is sold because the rent we pay for the month of November may not be due to the homeowner [as he may no longer own the home]. I know you’re obligated to pay rent to the landlord so long as you’re living there but I’m also aware that the agreement between myself and the landlord is broken once the sale goes through. Is this sound advice?

Also, do you think we should just break our lease after this stress and find another place to live? I’m guessing this loan modification/foreclosure threats/auction sale business implies that the homeowner is having trouble paying their mortgage on the house… Not sure if we wish to be renting from someone under financial duress. Hubby deploys in January and I’d hate to end up having to move/argue with the bank next year if this happens again and the bank forecloses on the home.

This is in Cumming, GA. My hubby spoke with someone in the JAG dept and they said there’s nothing they can do for us other than suggest an Atlanta attorney; I was a little shocked.
Asked this question the other day [first question on yahoo answers] and set it up for voting on the answers 4-5 hours after – without realizing that no one else can answer after that. hah Apologize for the duplicate, I’m still searching for some good advice.

Your Questions About Foreclosures

The Expert answers:

This is cause for concern as the new owner can and usually does change the terms of the contract that you signed. However, they must give a certain amount of time to allow you to find another residence or agree to the new terms. Laws vacillate from state to state. Good luck

Your Questions About Foreclosures

Mary asks…

What is the best way to go about negotiating a rent price on a townhome in foreclosure?

We moved into a town-home in South Florida in April of 2009. When we moved in we were aware that the owners where in “final” negotiations with a buyer and that the new owners wanted renters as well. We never had any problems with the realtor company that was managing property and collecting rent. The realtor company we negotiated the contract with had power of attorney from owners to negotiate a contract. Everything was legit to our knowledge (or so we thought). We kept getting these notices from the bank for the original owners from Bank. We contacted the realtor and he spun a believable tale about negotiations fell through and owners were looking for new buyers. We didn’t open anything from the the bank that was addressed to the owners until 3 months ago when we were being inundated with bank mail. Come to find out the property has been in foreclosure for a long time and they are trying to negotiate a loan modification or foreclosure sale. So we’ve basically been throwing our money at somebody for free. We just found out today that the bank filed another lawsuit to cancel and reschedule the foreclosure sale they were proposing. When we confronted the realtor company with the information, we explained the situation and we were able to live in January and February rent free to make up for the security deposit and last months rent. They want to negotiate a new contract before February is up. As pissed as we are, we believe we are in a position to negotiate a better rent. We did look in the surrounding area and rent increased by about $400/$500 for a comparable place over the last two years.

I’m stuck between the following:

On one hand I don’t want to pay someone on something they are not paying for.

I want to negotiate a cheaper price than $1,700 per month.

If I negotiate they could simply turn around and find other renters than we are forced to move out of area or pay more for rent elsewhere.

I do know that per law (land law) if we negotiate a lease (12 months) and the bank does repossess the property, they have to honor the lease. (I asked a foreclosure lawyer that).

There are a lot of options but I’m not sure which one is the best. We love the area. It is convenient to get to school and work. It’s quiet and easy to get to shopping and the like.

So my question within the question is How do I negotiate a better rent with owners that are trying to either sell their home in foreclosure or modify their existing loan?

Any suggestions would be great.

Thanks Kemperk – I neglected to point out that our lease has been officially up for almost 6 months. We’ve been living there month to month. The owners never contacted us to renegotiate and there is no “renewal” clause in the lease either. They were happy to let us live there month to month until we brought this “issue” up and then they said they wanted to “renew / negotiate” another lease agreement.

Your Questions About Foreclosures

The Expert answers:

You do not know what the owners are paying or not paying for and it is none of your business anyway. As long as you rent the property, you owe the rent to the owners until the foreclosure auction.

Perhaps Florida law is different, but in most areas of the country, once the foreclosure auction occurs, your lease is void. You are entitled to live there 90 days, then you have to move.

Loan modifications can go on for a very long time, it is not unusual. The scenario you describe goes on all the time, so there is nothing for you to be pissed about or trying to connive something out of. If you are paying below market value for rent, you may not want to swat at this hornet’s nest, you may find yourself stung in the end. The PM company will evict you since you are month to month now, and find someone that will pay going rate.

Your Questions About Foreclosures

Laura asks…

I am interested in a Property that is or has been in the foreclosure process…?

I am interested in a Property that I came across doing maintenance for the bank, I tried looking up the address on the web and It is not an active listing & I know it has not sold, I was told by someone working for the bank that I have to speak to the current owner… who I have found out is in jail and the home was or is in foreclosure and has not been made public just yet, how can I get first dibs on this property? Is there someone else I can contact to find out more info?

Your Questions About Foreclosures

The Expert answers:

The property apparently is in the pre-foreclosure stage. The bank might have started the foreclosure, however the procedure has not played out legally.

The other scenario is that the bank has not yet started the foreclosure even though the current owner is behind several months in their monthly mortgage payment. This might be the case since you indicated there is no public information about a foreclosure.

Since this might be the case the only person authorized to take any type on the property is the current owner listed on the title deed.

You might contact this individual to see if he/she is willing to sell any equity in the property to you. If they are you might be required to give them a few dollars for them to sign the title deed over to you for this equity.

Since the property is in pre-foreclosure you would have to have enough money to bring this current mortgage note current.

Have this current owner sign a contract indicting they are selling the property to you “Subject to the Existing Mortgage”. Place the sale price as the balance of the current mortgage balance. Take this signed contract to a licensed escrow closing agent in your state, you would also want to have a licensed title company open title transfer at the same time.

The phrase taking or selling the property to you “Subject to the Existing Mortgage” is a technique investors use to take over the current mortgage loan without getting new financing or qualifying for the existing mortgage.

With the signed contract the escrow closing agent will contact the current mortgage company for the amount necessary to bring the mortgage loan current as well as the balance of the mortgage loan.

Since it is apparent that you are not a real estate investor you might would want to buy a book on the foreclosure procedures in your state to learn this technique as there are several things that you would need to know about the purchase of a pre-foreclosure from an owner.

Most real estate agents would not be helpful in this situation as there is normally a commission in this type transaction and would add to the cost of you purchasing the property.

I hope this has been of some benefit to you,good luck.


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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