Posted by
admin on Jun 12, 2009 in
Foreclosures,
Housing,
Marketplace The first stage in the foreclosure process is Preforeclosure
This is when the bank files the foreclosure lawsuit. In some states, its called the Notice of Default and in other states, it’s called a Lis Pendis. The bank can file the foreclosure lawsuit when the borrower becomes 3 payments behind.
During this period, the borrower has options to solve their situation:
- They can pay off the lender in full.
- They can bring the loan current for all of the past due payments and attorneys fees due.
- They can do a workout with the lender to negotiate a repayment plan, loan modification of forbearance.
- They can sell the house and move
- They can sell the house to an investor and lease it back
- They can refinance the home with an equity lender.
- If they owe more than the home will sell for, they can do a short sale with the lender. This stage only occurs in a judicial state, It does not occur in a non-judicial state.
The 2nd Stage in the foreclosure process is the Auction or Trustee Sale
- This is where the bank brings the property to public auction.
- The sale date is set by a hearing 3-4 weeks before the actual auction occurs.
- The homeowner has the right to attend the hearing and request an extension to get the home sold. Most of the homeowners we work with that attend this hearing can buy themselves an additional 3 days for a total of 60 days.
- 95% of the homes that go to auction go back to the bank as an REO.
The 3rd stage in the foreclosure process is the REO stage
- REO stands for Real Estate Owned. This usually costs the bank anywhere from 35,000 -50,000 to take a home back in foreclosure. This is the 3rd and last stage of the foreclosure process in a judicial state. The property becomes an REO if the property does not sell to a third party bidder at the auction.
Foreclosure Timeline
The time line for a foreclosure dictates the options you have. The longer you wait to deal with the problem the less options you have.
30-90 Days late
Many more options – including saving your home – than folks know about, and many are not very painful.
90 Days +
The absolute best options and opportunities to save your home lessen and are much more restrictive. This also diminishes some of the sales opportunities.
Attorneys letters – Lis pendens
Several easy solutions are no longer available.
Sheriff notice
We can still salvage your credit and possibly your equity, but every day you allow to go by reduces your options.
Sheriff sale and foreclosure!!
A foreclosure will be on your credit report for at least 7 YEARS. But, worse than that, PUBLIC RECORDS will show this legal action for the statutory period of a judgment in New Jersey! The bank will file a deficiency judgment that must be satisfied before you can buy another house. This does NOT happen with the other options we can employ for you. With foreclosure, your credit is devastated. The reduction in your credit score is more then 2 or 3 times what it is for some other options. That means higher interest rates AND higher purchase prices for almost anything you want to buy.
Short Sale Instead of Sheriff Sale
We can assist you with bringing your credit back to a level for you to again own your own home much sooner than you think. The government is responding to the housing crisis by offering legitimate mortgage options so people don’t have to resort to subprime mortgages and predatory lenders anymore.
Are you behind on your payments? See what your option are at http://www.i-teamhomes.com/foreclosure.htm or call us at 609-417-1084. Don’t lose your home unnecessarily.
Tags: distressed home owners, distressed owners, distressed property, foreclosure, short sale, short sales
Posted by
admin on Feb 20, 2009 in
Foreclosures,
Selling,
for sale For Immediate Release:
February 18, 2009
(Edison, NJ) In today’s unsteady economy, many homeowners experiencing financial difficulty have turned to a short sale as a means of avoiding a foreclosure. In many cases, sellers who cannot keep up with their mortgage payments strike a deal with their lender to sell the home and payoff less than the total amount due on the loan. In some cases, the lender forgives the outstanding debt. A short sale can occur in any real estate transaction where the purchase price is less than the amount required to pay off the liens on the real property, such as mortgages, judgments, taxes, homeowner or condominium association fees, assessments, as well as closing costs including but not limited to brokerage commissions, realty transfer fee, and attorney’s fees.
There are key advantages to pursuing a short sale over a foreclosure. Depending on how the lender reports the loan, short sales can appear on your credit report as “pre-foreclosure in redemption,” not as “debt discharged due to foreclosure.” Thus, people who come to an agreement on a short sale with their lender do far less damage to their credit rating than those who go through a foreclosure. Additionally, a benefit to a short sale is that borrowers will generally face a shorter waiting period before they can obtain another mortgage.
“In general, a short sale can be much faster and less expensive than a foreclosure,” said 2009 NJAR® President Diane Dilzell, CRS, e-PRO. “Troubled homeowners should remember that a short sale is not a cure-all but the ramifications are less harmful to their long-term financial well-being.”
Homeowners who are having difficulty making their mortgage payments and who may be considering a short sale must generally meet three qualifying criteria: they must be behind on their payments, be able to prove a legitimate hardship, and have little or no equity in their home.
Sellers should be aware that a short sale is a complex transaction and can take several months to complete. A short sale also requires several parties to come to an agreement on negotiated terms. In addition, different lending institutions have different policies. Some lenders may agree to forgive the difference between what they are owed, while others may require repayment of the deficiency. If your lender “writes off” any portion of the amount owed it may be reported as taxable income. Therefore, sellers should always seek the advice of an attorney or tax professional.
Dilzell noted that a REALTOR® is a valuable resource to home sellers considering a short sale. REALTORS® can help consumers navigate the short sale process, as well as facilitate communication between interested parties.
“REALTORS® don’t just sell houses; we work to help people to afford to stay in their homes. In the end, we want troubled homeowners to know that a foreclosure might not necessarily be their only option. Whether it’s a refinanced loan or a short sale, resources are available to homeowners having difficulty making their payments,” concluded Dilzell.
Tags: foreclosure, homes for sale, listing your home, selling your home, short sale
Posted by
admin on Feb 8, 2009 in
Announcements,
Foreclosures New Jersey has implemented a new initiative called the NJ Judiciary Foreclosure Mediation Program for home owners who are in foreclosure. NJ is trying to help prevent as many foreclosures in the state as possible. Foreclosures are not a winning solution for any of the parties in today’s economy. The home owners don’t want to lose their homes, the banks don’t want any more asset on their books that will take months to dispose of (at a substantial loss, probably), and the municipalities don’t want the vacancies and loss of property tax revenues.
So, if you’re one of the NJ home owners currently facing foreclosure, check out our web site that outlines the different options you have (the sale of your home is NOT the only option you have) besides waiting for foreclosure. We also have details on the NJ Judiciary Foreclosure Mediation Program.
Tags: foreclosure, Foreclosures, new jersey foreclosures, stopping foreclosures
Posted by
admin on Feb 2, 2009 in
Announcements,
Foreclosures Fannie Mae and Freddie Mac on Friday again extended their moratorium on evictions of borrowers or renters facing foreclosure through Feb. 28. The companies also announced plans to expand rental options after defaults and to develop a new rent-to-own program.
Details of the programs include:
- Month-to-month leases for borrowers and renters;
- Property management companies hired by Freddie and Fannie will set market-value rents;
- Tenants and homeowners will be asked to demonstrate that they have enough money to pay the rent.
“Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market,” David Moffett, Freddie Mac’s chief executive officer, said in a statement.
Tags: evictions, Fannie Mae, foreclosure, Freddie Mac, moratorium
Posted by
admin on Jan 14, 2009 in
Foreclosures,
Housing,
Marketplace On Tuesday, Fannie Mae announced that it would allow qualified renters of foreclosed properties owned by a government-controlled mortgage company to stay in their homes.
Under the National Real Estate Owned (REO) Rental Policy, renters of homes acquired by Fannie Mae will be offered a new monthly lease at market-rate rent or if they desire, financial aid to help them move. Fannie Mae stated that it will hire real estate practitioners or property management companies to manage the properties while the units are for sale.
The properties must still meet all state, local building, and safety codes.
Tags: Fannie Mae, Foreclosures, foreclosures for sale, National REO Rental Policy, renters
Posted by
admin on Oct 3, 2008 in
Finances,
Foreclosures,
Housing,
Mortgages Struggling families facing foreclosure will find one more avenue to take-mortgage assistance through a program called HOPE for Homeowners program, which will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD’s Federal Housing Administration (FHA).
The HOPE for Homeowners program begins today and ends September 30, 2011. The program is available only to owner occupants and will offer 30-year fixed rate mortgages, so the borrower’s last payment will be the same as the first payment. In many cases, to avoid what would be an even costlier foreclosure, banks will have to write down the existing mortgage to 90 percent of the new appraised value of the home.
If you are interested finding out more or in attending a planned seminar on this new program, call Linda at 609-417-1084 for details.
Tags: financing, foreclosure, HOPE for Homeowners, mortgage
There seems to be a new game in town. Sellers who are seeking short sales are encountering a new twist to the approvals from banks and lenders. The lenders are agreeing to let some short sales go through, however, they want the home owners to sign a note promising to pay some or all of the balance due. These debts that could burden borrowers for the rest of their lives in terms of their credit and financial viability to rent currently or buy another home in the future.
Moody’s Economy.com estimates that about 10 million home owners have negative equity, a condition known colloquially as being upside down or underwater. By next June, the forecasting company expects the total to rise to 12.7 million; this is a quarter of all home owners who have mortgages.
“The first wave of foreclosures involved a lot of investors who just disappeared,” says Lance Churchill of Frontline Seminars, which teaches real estate practitioners how to negotiate with lenders on short sales. “Now, home owners with jobs and assets are underwater and want to sell. The banks want as much as they can get, today or in the future, and the owners want to get away clean.”
Now comes the conundrum. If the lender does a short sale without extracting anything from the seller, everyone in the country who is upside down could try to wiggle out from under and banks will take a fresh wave of hits. But if the lender pushes too hard, the borrower will default, leaving the bank in worse shape. It’s a extremely difficult balancing act to find a mutually acceptable solution.
The real estates agents are the primary solution to this issue. The real estate agents have to stop using the short sales as a gimick to drive business to themselves. Since we expanded into the pre-foreclosure market we have heard some real horrendous stories from home owners about some of the agents that they have spoken to or have dealt with. It seems that a large majority of the real estate agents in our market are using the short sale as a gimick to entice home owners to sign a listing agreement with them by either touting themselves as experts in that field or guaranteeing the short sale will go through fast. Both of these advertisings are WRONG. Every single short sale is unique becuase each bank and each case worker has their own set of guidelines and rules they use. Additionally, with so many agents pushing short sales onto unsuspecting home owners, and those home owners being led to believe that they will be getting something (a clean slate) for nothing, the lenders are being overwhelmed with short sale applications. This results in thre lenders taking more time to make a decision.
So, it does not come as a surprise that the lenders are now pushing back and not going to allow that many debt forgivenesses. Lenders are also pushing back on the listing agent by trimming the commission that they will allow. The agent who proposed the short sale and listed the property under those conditions now attempts to short the agent who represents the buyer.
The listing agent (LA) is told by the lender that they will only pay a 3% commission on the sale. The LA then tells the buyers agent (BA) that the lender will only allow the BA to get 1% commision, thus keeping the lion’s share for himself. The LA also tells the BA that if they don’t accept this 1% then the deal is off and they can explain to their buyer why they allowed the deal to collapse.
As Foreclosure Prevention Consultants we never recommend that a financially distressed home owner entertain a short sale as a primary alternative. Why do other agents do so? Because many other alternatives do not put any money in their pockets, even though they would be of more benefit to the home owner. Our recommendations are always to avoid foreclosure, first and foremost, then to try to stay away from marketing the home as a short sale. Always, and we do mean ALWAYS, try to work out a mutually agreeable solution with the lender. They don’t want the house and they don’t want to lose any money, either. It is to their benefit to keep the home owner in the house, making some type of payment, and allowing the market forces to increase the value of the home at a normal rate and over the long-term.
With this new revelation of lenders not alolowing as many forgivenesses the only people to gain from using a short sale as a primary solution is the real estate agent and everyone else who will charge a fee for the transaction.
Terry Iwaniw
Foreclosure Prevention Consultant
REALTOR Associate
RE/MAX Home Team
609-417-1086
Tags: Foreclosures, mortgages, real estate sales, short sales
In April of 2008 the NATIONAL ASSOCIATION OF REALTORS® conducted an on-line survey of members on issues related to the credit crunch, foreclosures, and short sales. They released approximately 5,800 responses. Below is a summary of the results of that survey.
Short Sales
What is a short sale? A short sale is usually defined as a case in which a bank or other mortgage lender “discounts” the balance of the loan, usually due to a borrower’s financial or other economic hardship. The property owner/borrower then sells the property at that lower price and the proceeds from the sale are turned over to the lender. Typically, short sales are done in order to prevent foreclosure.
In the national NAR survey, REALTORS® indicated that overall 40 percent of their clients have been involved in a short sale. And of those REALTORS® that participated in short sales, 55% of them reported that they had assisted the buyers and 45% had assisted the sellers.
We are always being asked about short sales because buyers in New Jersey, based on what they are reading in the news media, belive that a large portion of the homes being marketed are short sales. To clear up any misconceptions that anyone gets from reading the mainstream news media, the top states in terms of the percentage of REALTORS® involved in short sales were
- Nevada (65%)
- Rhode Island (52%)
- California (52%)
- Florida (50%)
- Arizona (47%)
The states with the lowest percentage of REALTORS® involved in short sales were:
- Vermont (less than 1 percent)
- Wyoming (11%)
- Mississippi (17%)
- Alaska (17%)
- Delaware (18%).
Since short sales involve some write-down by the lender of the amount owed, the survey asked REALTORS® about the extent of write-downs. More than a quarter of respondents who participated in short sales, approximately 26.7 %, stated that the short sales involved more than 20 percent debt forgiveness. Only a small percentage, about 4.4 %, said that the short sales involved less than five percent debt forgiveness.
Foreclosures
REALTORS® were also asked about the share of active listings in their market (or in their multiple listing service) were foreclosed properties. The median percentage of “foreclosure” listings was
6%. More than a 1/3 of respondents didn’t know the number of active listings were foreclosed properties. Also, some MLS’s do not list foreclosed homes. Almost 15% of the REALTORS® indicated that one to five percent of their market listings were foreclosed properties. Overall, this is an extremely low number as compared to what the news media’s articles would lead you to believe.
Credit
In addition to asking the participants about short sales and foreclosures, REALTORS® were also asked about recent availability of credit and what percent of their clientele were having difficulties/challenges
in obtaining approval for mortgage loans. Over a third of respondents indicated that all or nearly all of their their clients/customers encountered no problems in getting a loan.
But there were differences in some states. Fully two thirds of the participating REALTORS® from Alaska reported that their clients had no problems obtaining approval for a loan. Similar trends were reported in New Jersey (59%), Montana (48%), Wisconsin (47%), and the District of Columbia (46%).
Postponing the Homebuying Decision
Some potential homebuyers have been “on the fence” – perhaps waiting for prices to dip further, for interest rates to decline, or for their personal financial/economic situations to improve. In a difficult housing market, it is sometimes challenging to determine the factors that are influencing a buyer’s decision whether or not to purchase a home.
The survey asked REALTORS® if their recent clients had postponed the home buying decision. More than half indicated that their clients did actually purchase a property. But more than a 1/5 reported that buyers wanted to wait for home prices to decline even more before purchasing. Almost 8% said that their buyers were not able to purchase a home because they needed to sell their current home in order to use the proceeds on their next home purchase. But only 3.9 percent participants reported that buyers postponed a home purchase for personal reasons.
Some Positive Signs for the Future
Now, for some good news! Mortgage purchase applications are up according to recently released data from the Mortgage Bankers Association. The purchase portion of the MBA’s Mortgage Applications Index increased by 6.4%, from 349.0 to 371.5 for the week ending September 5, 2008. That is a fourth consecutive weekly increase. What this means is that buyers are returning to the market, it may be at a moderate pace but it’s still in numbers that can be measured. It may take some time for customers to absorb the recent positive housing news, the affordable home prices, a large selection of existing inventory, and the still historic low mortgage rates, these factors are already attracting the fence sitters.
Tags: Foreclosures, foreclosures for sale, home buyers, mortgages, real estate market, short sales
Since its inception in 1934, the FHA has been the answer to home ownership for millions of Americans who otherwise would never be able to own a home. The FHA was created as an answer to the Great Depression, where millionsof people lost every cent they owned and most banks went out of business.
The FHA allowed families to purchase homes with very little money and at market interest rates, even if they had a tainted credit history. The FHA was a godsend to what was left of the banking industry in 1934. Since every FHA loan was insured by Up-Front Mortgage Insurance Premiums (UFMIP) and MIP (mortgage insurance premiums) the banks had very little risk. Homeownership was now available to the masses, not just the privileged few.
In its 74 year history, there have been many changes to the FHA, but the most sweeping change is about to take place in about a year. The FHA has always offered the same interest rate to all its borrowers, regardless of their down payment or credit rating. It did not matter whether you put down 3% or 20%, or your credit scores was 550 or 850, your interest rate was the same. That will not be the case in the very near future.
The FHA is about to implement ‘Risk Based Lending”, just like conventional banks. Translated this means the lower your downpayment and the lower your credit score, the higher your interest rate. This would have been implemented on October 1, 2008 but Congress placed a 1-year moratorium on this radical change to allow for the sale of the millions of foreclosed homes clogging up the banks balance sheets.
What does this mean for people who would need to take advantage of the low down payment/lower interest rates now offered by the FHA in order to buy a home? Very simply, if you wait to buy a home until 2009, may very well have to come up with more cash and suffer through higher interest rates and therefore, higher payments. Many people will be forced out of the market altogether, thereby taking homeownership out of the hands of thousands upon thousands of people.
Mr. & Mrs. Charles Humphreys, The First Home Financed
through the FHA
As a professional, my advice to anyone who thinks they will need to finance their home through FHA is to do it as soon as possible. Once the FHA is allowed to change their guidelines to “Risk Based” financing, people who once relied on old guidelines to qualify for a low, fixed rate mortgage will be out of luck.
Linda Iwaniw
REALTOR Associate First Time Home Buyer Specialist
Fixer Upper Property Specialist
Foreclosure Prevention Consultant
RE/MAX Home Team
609-417-1084
http://www.sjerseyhomes.com/
Tags: fha mortgage, Finances, home mortgages, mortgage qualifications, mortgages
Essentially, nothing newsworthy is happening on the foreclosure front in the New Jersey Market. In the latest from the news media the headlines read Nation’s foreclosure plague widens. Well this can’t be good news for those of us in the real estate marketing business. this will bring out all of those buyers that think that the market in New Jersey is a prime market to get a home for almost nothing. That the home owners will be dropping to their knees in glee in being able to sell their home for almost nothing. To be happy that these buyers will be able to brag to their friends about the great deal they made.
Well, here’s a reality check. Not in New Jersey. If you read the whole article and not just the headline, you’ll soon learn that if you are looking for such leverage in the State of New Jersey that you’re living in the wrong state. New Jersey isn’t even in the Top 5 of states with high foreclosure rates. Sorry. Houses are still being sold by provide owners who are looking to sell their homes at the market rate. Their neighborhoods have NOT been devistated by a high number of homes having been foreclosed on and then being sold by banks and mortgage lenders at lower then prevelant market prices, thus causing a further decrease in home prices. More and more home owners are either withdrawing their homes form the market or allowing their home’s listing agreement to expire and not
relisting. They’d rather do this then sell their home for either less then what they owe on it or leave themselves no money for their next home purchase.
One of the key factors that many of the buyers seem to forget is that the home owners who are not financially distressed will need funds from the sale of their current home to purchase the next one. If they don’t get enough money for their next purchase, they won’t be selling their current home. In the vast majority of cases in New Jersey, that is the way it is…simple and straightforward.
So, what states are leading in foreclosures? Which are the Top 5 states? Where can you have a large amount of choices of foreclosure homes? Well, pack up you bags! You’re going to have to move to one of the following states -
- Nevada – has the highest number of foreclosure homes with 1 out of 106 homes.
- California – is second with 1 out of 182 homes.
- Florida – is right behind California with 1 out of 186 homes.
- Arizona – is next with 1 out of 195 homes.
- Ohio – is a distant 5th at 1 out of 375.
Notice that New Jersey is not even listed? According to market research information from the NJ Association of Realtors, while other states have seen home prices plummet, homes in New Jersey have generally maintained their value. Specifically, as an example, Atlantic City, NJ homes sales prices were $264,600 in the first quarter of 2007 while they were $277,400 in the first quarter of 2008, this is a +4.8 increase from a year ago. According to the article from CNN, foreclosures drive prices down. Overall, the market areas where we conduct the majority of our business (Camden, Gloucester, and Salem Counties) is still strong, as shown on the chart below.
Click Image to Enlarge
If you’re a first time home buyer, work with us and we work to eliminate the possibility that you could end up in the same situation as the current home owners facing foreclosure. If you are a current home owner who is financially distressed and need help and advice with your home, call us…we’ve been where you are and have learned much through trial and error. We work so that YOU don’t make the same mistakes we did.
Terry Iwaniw
REALTOR Associate
RE/MAX Home Team
http://www.snewjerseyhomes.com/
http://www.i-teamhomes.com/
http://www.terryi.com/
609-417-1086
Tags: 2008, Association of REALTORS, first time buyers, Foreclosures, home owners.real estate sales, homes sales, housing market, NJ Association of Realtors, NJAR, real estate market, realtors
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