When you’re facing an underwater mortgage you’re facing a situation where none of “the rules” matter that much anymore. What rules are we talking about? We’re talking about the rules that say that you must always pay your debts, no matter what. We’re talking about the rules that say it’s actually bad to look out for yourself and your family first. Just why would people think that those rules apply to people with underwater mortgages, especially when families are having trouble making the payments? First, those rules became rules for good reasons: when you are dealing in good faith and the other party is dealing in good faith, you really ought to do all you can to honor your end of the bargain.
Many Michigan homeowners burdened with underwater mortgages find that walking away from the mortgage is, in the long run, less financially damaging than continuing to make monthly payments. Mortgage foreclosures, however, pose serious damages to the homeowner’s credit history, and underwater homeowners who choose foreclosure may not be eligible to purchase another home for the next seven years. Home foreclosures are equally damaging to the mortgage lender, which faces the high legal fees, potential property damage and liabilities associated with managing a foreclosed house.
They’ve pushed mortgages like never before. They’ve allowed people to get mortgages without proof of their incomes. They’ve pushed ARMs-adjustable rate mortgages-on a gamble that families would be able to afford the larger mortgage payments when those mortgages reset in five years, and every year after, to reflect inflation. They’ve pushed mortgages like dealers push drugs. And because most people in our country don’t have a good basic financial education, we’ve been mainlining the credit drug for 20 years.
Often, the original mortgage lender requires the homeowner to pay the deficiency, but this is not always the case. Depending on the size of the deficiency, the homeowner’s original credit score and other circumstances surrounding the mortgage’s underwater status, lenders may choose to release homeowners from the remaining debt. Recent foreclosure laws and government incentives have made it more beneficial than ever for mortgage lenders to accept loan modifications as an alternative to foreclosing home with underwater mortgages. Before deciding to walk away from a bloated mortgage, homeowners should contact a company which specializes in foreclosure transactions to see if they might qualify for a short refinance.
I don’t know about you, but I’m certain that, if Kristin and I were to try the shady financial dealings that these mortgage lenders and other bankers were into, that we’d be in jail fast. We’re pretty sure you would be, too. Instead, these jerks are getting their multi-million dollar bonuses paid for out of our tax money! With all this in mind, what rules do we think you should apply to yourself and your family if you’re faced with an underwater mortgage? We’ll tell you-and this is the cardinal rule: Look out for your own best interests. Your only real responsibility is to yourself and to your family. We don’t care if you made an honest mistake in dealing with your mortgage lender or if you let yourself be handily convinced to take out more mortgage than you could afford. You don’t deserve to ruin a huge part of your life because of that mistake. And your children certainly don’t deserve to suffer because of it.
Learn more about Obama Mortgage Relief Plan Qualifications.
Foreclosure Help: Houses Sold At Foreclosure Auctions
By · CommentsThe Home Affordability and Stability Plan is a government foreclosure help program that is costing over $75 billion dollars. This shocking figure has caused an up-roar in Congress and many Americans are holding their breath. This is a long awaited stimulus package that many people are hoping will help stop foreclosure and save homes. Government Foreclosure Help has too long kept silent while hardworking people is losing their homes. The Billionaire Program as some referred to is nothing in comparison to what the welfare program will become with millions of people on the streets.
Foreclosure proceedings differ from state to state, so it is important to find out exactly what regulations will apply to you if you are forced into foreclosure. The basic procedure is the same in all states, however. If you miss a payment, you will usually be charged a fee and given a certain period in which to make up the payment. This will usually be about a month. If you do not make the missed payment, or continue to miss future payments, your lender will begin to put more pressure on you. If you miss three months worth of payments, your lender can begin the formal foreclosure, either through judicial sale or power of sale.
As the old saying goes, “Knowledge is power” and proper actions based on accurate information is the key to helping you avoid foreclosure. Due to the glut of unsold housing inventory on the market, lenders don’t want your situation to escalate any more then you want it to. If you get accurate information regarding home foreclosure help, and if you act quickly, you may be able to show your lender an alternative solution that alleviates the “need” for them to foreclosure on your property.
Government foreclosure help is just right around the corner in the form of the Home Affordability and Stability Plan. In Texas there are two types of foreclosure laws and you probably fall under the category of the Non-jurisdiction where your lender can sell your property with a 21 day notice. The other category is the Jurisdiction where your lender must take you to court.
Borrowers who seek foreclosure help early are much more likely to work out a solution, no matter how dire their situation, than those who try to avoid the problem. The best option may be to contact your lender, seeking the foreclosure help you need. By taking an early active role you may be able to obtain a reduction in monthly payments through a loan modification. Get foreclosure help and stop foreclosure today.
Learn more about Obama Mortgage Relief Plan Qualifications.
Will The Bank Throw Me Out Of My Home?
By · CommentsHow long you can remain in your home after you stop paying your mortgage, is influenced directly by the cost of your home. The more expensive your home, the longer you will probably remain. Many people today are still in their homes two years or more after being served with Lis Pendens, or notice of a pending foreclosure action.
One short sale expert in the Tampa Bay area of Florida specializes in luxury waterfront properties. His clients typically remain in their homes 2.5 years after their last payment is made. During this interval, tough negotiations are taking place with lenders until a favorable settlement is reached.
Foreclosure Radar is a site that tracks foreclosures.Their studies indicated that the more someone owes, the longer they can remain in their home while not paying their mortgage. Sean O’Toole, CEO of Foreclosure Radar, said, “The truth is that the larger the loan balance you have, the more upside down you are in the home, and the bigger the loss for the lender, the better your chances are of not being foreclosed on for a very long time.”
O’Toole added, “So while we still think foreclosure roulette is the bank’s game of choice, we now also believe that the number of chambers in their gun, and your likelihood of being quickly foreclosed on, is directly tied to the size of the potential loss that the bank might face. Perversely, this means those who took the biggest loans, on the nicest houses, with the largest lines of credit to buy lots of shiny new toys will also get the most free rent when they strategically default”
O’Toole added, “Specifically we were wondering if banks took longer to foreclose on larger loans, where there tend to be larger losses, than on smaller loans. The answer is clear: Yes. The size of the potential loss absolutely matters. Not only that, but time to foreclose doesn’t diverge until the government intervened in the foreclosure market in early 2009, with, for example, changes to the Federal Accounting Standards Board rules on mark-to-market.
If one follows accepted accounting principles, you record the value of your assets periodically, whether they increase or decrease in value. Treasure Secretary Paulson, after announcing the TARP bailouts in 2008, suggested that banks should not be required to either record or sell assets that had decreased in value.
After Secretary Paulson’s announcement, considerable pressure was put on the supposedly independent Federal Accounting Standards Board (which writes the accounting rules these companies must follow) to ease the rules that require companies to mark assets to current market values. I think there is little doubt that the changes to these rules were necessary in order for the banks to pass the stress tests that were undertaken shortly after this accounting change was pushed through.”
Many ways exist to postpone foreclosure proceedings, or even to stop them altogether. Anyone who is upside down in their home investment, or about to be placed into foreclosure, should consult an expert in such matters. Many attorneys and Realtors don’t understand all of the options because they don’t deal with these matters on a daily basis. Some are sadly misinformed about the latest and most effective strategies to protect the homeowner. Big banks and other major lenders have large teams of attorneys who specialize in finding every advantage for their clients. They often take unfair advantage of unsuspecting or uninformed homeowners or their well-meaning, but under-qualified Realtors or attorneys.
Go to Short Sale Commando to learn you best options if your home is valued at less than what you owe. We specialize in short transfers of Florida luxury homes.. Unique version for reprint here: Will The Bank Throw Me Out Of My Home?.
If you are in search of foreclosure help in Phoenix, Arizona and are not sure where to turn, consider the government’s plan to help you out. However, realize that the government plan for foreclosure help, basically a loan modification, has several requirements that may cause you to be ineligible. We believe that foreclosure help from the government is just the second best option. The best foreclosure help available to you is the short sale. Here are the two plans, in a nutshell, and some of the things to consider with each.
With the government program, you will only receive foreclosure help in Phoenix, AZ if you meet the criteria laid out by the government and get your application for foreclosure help is during the time frame that the government sets aside. Here is that criteria as we understand it: You must live in the home that you are seeking foreclosure help for. The mortgage you are seeking foreclosure help on must have been obtained prior to January 1, 2009. Foreclosure help can not be used on mortgages that are more than $729,750.
You hardly need to begin coming down that listing and begin visiting all of the several offices to find out what government foreclosure help you’ll be able to get, if anything. It’s your sincere effort in finding the places lies the chance of saving your house from foreclosure. Additional choices to look at- While it concerns all of the varied alternatives out there, get to know that government foreclosure help isn’t the sole help that’s available.
If you qualify for foreclosure help based on the criteria above, you have a good chance of getting a loan modification that will better suit your needs. We recommend that you apply for foreclosure help as soon as possible. Do the following to get qualified for foreclosure help: Let the bank know that you would like foreclosure help with the President’s loan modification program. When you contact the bank regarding foreclosure help, verify the above criteria with them, but do not give them any information yet. Accurately supply the lender with the above criteria. There are no “do overs”. So check and double check to be sure that they information shows you qualify.
President Obama’s Stimulus Plan might give you the foreclosure help that you need. It will certainly be a good option for some people. The second, and in our opinion, better option, for many people is the short sale. With a short sale, you will place your house on the market and get an offer from a perspective buyer. To get the foreclosure help you need, you can avoid foreclosure all together by taking the offer to the bank and telling them that they should take the offer because you will otherwise default on your loan. They, in many cases, because you need foreclosure help, will accept the offer and forgive the remaining loan balance. They do this because the lender realizes that they will recover more money from you selling the home than they can if they have to sell the home through a foreclosure sale.
Learn more about Obama Mortgage Relief Plan Qualifications.
Underwater Mortgage: What is a Short Sale?
By · CommentsIf you read the news at all, you’ve probably seen the term “underwater mortgage,” but do you know what that means? When a mortgage is underwater, it means that the homeowner owes more on the mortgage than the house is actually worth. That’s not supposed to happen. In fact, from roughly 1990 to 2006, no one seriously thought that underwater mortgages were ever going to be a big problem. We all believed that housing prices would just keep rising and that we could count on our building equity to give us all the other cool things we wanted. Like fancy cars, a new deck, or a guaranteed retirement.
You could give your mortgage lender a “deed in lieu.” This means you hand over the deed and the keys, and you walk away from the house. This is not a good option! Why? Because most mortgage lenders will hound you relentlessly about paying the difference between what they can sell the house for and the total amount of your mortgage. And because mortgage lenders aren’t set up to be real estate offices, they will sell your house for pennies on the dollar just to get rid of it. The next option is foreclosure. With foreclosure, you can keep living in your house mortgage-payment free until you get an eviction notice. You’ll have to manage your way through a few years of less-than-stellar credit, but Kristin and I have been through this option, and it’s worked out well for us so far. You may also have to worry about your lender coming after you for the difference between the eventual foreclosure sale price and the amount you owe on your mortgage.
And, voila! We had the recession and near-financial collapse of 2009. Guess what else happened? Suddenly there was a glut of houses on the market from all the foreclosures that happened when the people who got those bad loans couldn’t pay them. What happens when supply goes way up? Demand falls way down-and so do property values. Add 10% (or 17%, if you understand how the government isn’t showing you accurate unemployment numbers) unemployment into the mix, and what we have on our hands now is a mess where a quarter of US homeowners have underwater mortgages-and one out of ten of them owe 25% more than their houses are worth!
Clearly this is a tough situation for homeowners who need to decide whether it makes more sense to keep paying on their underwater mortgage or to strategically default, just as any business does when it’s faced with an underwater investment. It’s a hard situation for neighborhoods when houses are getting boarded up and trashed because of foreclosures-which just drags property values down more. And it’s hard for city governments as they’re losing all of that tax revenue from property taxes. But if you’re dealing with an underwater mortgage, the first people you need to look out for are yourself and your family. If you decide to walk away and strategically default on your mortgage, you could end up staying in your house rent-free for possibly up to 2 years.
This way everyone wins a little. You keep maintaining the house so the mortgage lender doesn’t have to. You may need to keep paying the taxes during that time, but that helps keep city services going. And your neighbors won’t have to take a hit on their property values while you’re waiting out your default period. You may even be able to negotiate a short sale with your lender so the house is never empty! And while you’re staying in your house payment-free, you can save up for your life after your foreclosure or short sale. In other words, you won’t be throwing good money after bad.
Learn more about Obama Mortgage Relief Plan Qualifications.