Foreclosure – Karen's Perspective

Buyer Beware

This is why you don’t buy a property sight-unseen.

12 / 27 / 2011
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Message to Congress on Small Home Mortgage Foreclosures

“Those who cannot remember the past are condemned to repeat it.” George Santayana

Read this Message from Franklin D. Roosevelt to Congress. American Presidency Project, April 13, 1933. We have been here before..

To the Congress:

“As further and urgently necessary step in the program to promote economic recovery, I ask the Congress for legislation to protect small home owners from foreclosure and to relieve them of a portion of the burden of excessive interest and principal payments incurred during the period of higher values and higher earning power.

Implicit in the legislation which I am suggesting to you is a declaration of national policy. This policy is that the broad interests of the Nation require that special safeguards should be thrown around home ownership as a guarantee of social and economic stability, and that to protect home owners from inequitable enforced liquidation in a time of general distress is a proper concern of the Government.

11 / 30 / 2011
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Foreclosures – More Profitable Than Loan Modifications?

photo by peternamara1

I first posted this article on November 10, 2009. I just came across it again and, unfortunately, it still seems completely relevant. I would love your feedback to know if you think any of this has changed over the past two years.

Have you worked on a loan modification or a workout with your lender in an attempt to avoid foreclosure? Have you faxed pages and pages of information only to have them tell you they haven’t received it, or that you faxed them to the wrong number, or that you faxed the wrong documents??

Have you gone through the modification process but been denied without a clear explanation as to why? Have you received incompetence and indifference from your lender?

If you’ve jumped though all of their hoops only to come out frustrated with no work out, you’re not alone.

In the last year, Consumer Affairs has received hundreds of complaints from consumers who said they followed loan modification instructions, faxing requested documents repeatedly, only to have their applications disappear.

11 / 16 / 2011
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1 Million Foreclosures Delayed Until 2012

But how does this impact you? A recent report by RealtyTrac stated:

“An estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until next year.” Yes, they said 1 million.

The economic recovery is far from over. “Shadow inventory” is real and, no doubt, growing. If you were hoping for a quick housing recovery, sorry.

07 / 26 / 2011
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If You’ve Never Failed, You’ve Never Lived

Here’s some of the good stuff I learned this week.

According to MSNBC, as of 2009, more than 19 million households paid more than half their incomes for housing, including more than 10 million renters, according to the study.

Foreclosures on North Carolina homes fell 38.3 percent in May from a year ago according RealtyTrac and foreclosures nationwide dropped 33.4 percent between May 2010 and May 2011. I read elsewhere, however, that the number of homes that should be foreclosed has not dropped. It’s just that the banks are so backed up in their processes that fewer foreclosures are, as a result, being filed.

The great thing about being rich isn’t the money, it’s the choices. – Chris Rock

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.” Steve Jobs

06 / 25 / 2011
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Good Stuff I Learned this Week

Real Estate Investors Rock

Too often, as investors, we get a bad rap. Many would have the public believe that those who invest in real estate are “scam artists”.

The truth is, what we do is vital to the economy and to literally hundreds of thousands of homeowners across the country. As a group, our goal is to buy properties from sellers who need help with their situation and to “sell” to people who wouldn’t otherwise be able to buy or live in a home as nice as what we provide. We work for the public good because (1) we care and (2) without them, we don’t have a profession.

The above video is the perfect example. It was filmed by one of our Triad Mastermind members, Garfield Duncan of Real People Real Homes in Forsyth County, North Carolina. Here is what Garfield had to say about this video:

“Just a glimpse of why we do what we do. This woman lost her house to foreclosure and I was able to purchase it, completely remodel it (35 days) and return it to the family using Rent-To-Own. The family’s matriarch commented that her dead husband can finally rest in peace after which her son, not captured in the video, began to cry.”

In the next business day, the banks will commence foreclosure on another 10,000 families. We, as investors, are doing what we can to help you and them and our economy.

Real estate investors, like Garfield Duncan, rock.

06 / 10 / 2011
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Homeowner Forecloses on Bank

Laughing.. all the way to the bank.

06 / 09 / 2011
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Foreclosure Basics

Foreclosure, simply speaking, is taking possession of a mortgaged property because someone failed to keep up the mortgage payments. The homeowner lost it, the lender now owns it.

Approximately one third of homes sold nationwide in 2010 were foreclosures. One third; that’s a lot of properties. In the first quarter of 2011, 47% of house purchases (we’re talking almost half!) were made by investors, so know you’ll have a lot of competition shopping for the best deals.

How do you know you’re in threat of foreclosure? You’ll receive, in the mail, a formal demand for payment from the lender. Depending on your state, the lender will issue this letter of notice or Notice of Default (NOD) when the homeowner is 3 months behind on the mortgage payments. The notice is a threat to sell your property, terminate all your rights in that property and evict you from the premises. Many mortgage contracts state that the lender has the right to do this when you’re late with your payment the very first time. Most won’t, they have too much going on and really just want the payments they get from you every month, but read your contract to know what they can do legally.

Foreclosures are not only a problem for the borrower.

05 / 20 / 2011
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Foreclosure

6 Options When You can’t make Your Mortgage Payment

If no longer being able to make your mortgage payment is a reality for you, here are 6 of the most commonly practiced and accepted options for any homeowner in this position.

Loan or Mortgage Modification. This is a good place to start when you feel the mortgage payment growing to a place you can no longer handle it. Whatever you do at this point, DON’T WAIT!! As soon as you know your mortgage is too much for you, contact your lender. Rest assured, the lender does not want your house. They are in the lending business, not the real estate business. They will work with you even when you are still current on your payments.With a loan mod, they may refinance the debt, extend the term of your loan or even reduce your monthly payments to an affordable level.Your loan could be permanently changed by adding what you’re not paying currently to the back end of the existing loan balance, lowering the interest rate, making an adjustable rate fixed, or extending the number of years you have to repay your loan.
Why would the lender want to do this? It keeps them from losing the loan payments and gaining a house and, ultimately, they will make more from you over time because it will take you longer to pay off the loan.

Why would you want to do this? This allows you to keep the house and keep your credit in tact. It gives you time to wait until the market turns around, house values begin to climb and you can sell for a profit.
Forbearance - Read more…

05 / 17 / 2011
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Flipping Properties

flip house

What makes a property a “flip”? According to RealtyTrac, a property that is bought and then sold again within 180 days is considered a “flip”.

Apparently, we’re doing our share of flipping here in North Carolina. RealtyTrac put out a list of the top 10 areas in the country for flips and Guilford County, North Carolina (my home) ranked number 5 on their list. I’m happy to report that we and our coaching students helped significantly with that ranking!

RealtyTrac also reports that, in 2010, 15.6% of the foreclosed properties purchased in Guilford County resold within 6 months. No wonder house prices have dropped so dramatically and buyers want to purchase, even retail properties, at such unbelievable discounts.

Are you a “flipper”?