foreclosure http://www.wisebread.com/taxonomy/term/9933/all en-US These Are the 8 Most Common Homebuying Mistakes Foreclosure Experts See http://www.wisebread.com/these-are-the-8-most-common-homebuying-mistakes-foreclosure-experts-see <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/these-are-the-8-most-common-homebuying-mistakes-foreclosure-experts-see" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/house-466373471.jpg" alt="house" title="house" class="imagecache imagecache-250w" width="250" height="200" /></a> </div> </div> </div> <p>As a foreclosure prevention advisor at a Housing and Urban Development (HUD) approved counseling agency, I see my clients suffer the consequences of their homebuying mistakes on a daily basis. Sometimes they are facing foreclosure due to the economy &mdash; job loss or pay reduction &mdash; but a lot of the time it&#39;s because they weren&#39;t prepared to buy a home. Either their credit wasn&#39;t good enough and they signed for a high interest loan they can&#39;t afford, or they don&#39;t have an emergency fund. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-before-buying-your-first-home?ref=seealso">What First-Time Homebuyers Need to Know</a>)</p> <p>Below I&#39;ve listed eight mistakes I see on a regular basis. Read and heed so that when you purchase your first home, you are able to keep it.</p> <h2>1. Forgetting About Other Costs</h2> <p>When you rent a place, you&#39;ll pay rent, utilities, and (hopefully, if you&#39;re smart) renter&#39;s insurance. When you buy a home, you&#39;ll be paying down your principal with interest, property taxes, homeowner&#39;s insurance (which is a lot more than renter&#39;s), utilities (which are probably more, because you&#39;re likely moving into more space), and all maintenance costs. You won&#39;t be able to call your landlord if you have a leaky faucet. You&#39;ll either have to fix it yourself or call a plumber. Keep this in mind when you buy a home, and be ready. Most experts suggest having an emergency fund equal to all of your expenses for six months. And through the actual homebuying process, don&#39;t forget that there are closing costs associated with purchasing a home, including appraisal fee, credit report fee, escrow fee up front, and more. Do your research and save up as much as possible. (See also: <a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for?ref=seealso">Costly Things New Homeowners Don&#39;t Prep For</a>)</p> <h2>2. Falling in Love With a House</h2> <p>I&#39;m obsessed with homes. When I was younger, I used to draw out my home with architecture catalogs. And even now, when I get stressed out, I like to go shopping for homes online. In other words, I understand &mdash; buying a house is fun! But be careful. You could end up going over budget if you get too excited about all the things your house could have. You don&#39;t necessarily need a breakfast nook or a pool. In fact, before you even start looking for a home, it&#39;s best to get pre-approved for a loan. This will tell you exactly how much the bank is willing to lend you. Then, only look for homes in your price range. (See also: <a href="http://www.wisebread.com/how-emotions-can-hurt-a-home-buyer?ref=seealso">Emotions Can Hurt a Home Buyer</a>)</p> <h2>3. Buying a Home You Can&#39;t Afford</h2> <p>This seems obvious, but it&#39;s surprising how many people do this. The mortgage industry considers your mortgage payment to be affordable if it is 31% or less of your gross monthly income. That payment includes principal, interest, taxes, insurance, and HOA fees. But this might not be affordable for your lifestyle. Really sit down and crunch the numbers, and make sure your home fits into your spending habits. Also, if you&#39;re purchasing your home with another person, don&#39;t base the payment on two incomes. Base it off one. That way when something happens, you&#39;ll still be able to make your payments.</p> <h2>4. Not Making a Full 20% Down Payment</h2> <p>When you buy a home, make sure you have a large down payment ready. You want to build up equity before you buy, so that if you decide to sell later, you don&#39;t lose money on the transaction. If you don&#39;t, you might end up paying pricey private mortgage insurance (PMI) every month until your equity is up to 20%. If you do this, your mortgage will be considered risky, which basically means you&#39;re more likely to default on your loan, and your lender requires insurance to cover potential losses. (See also: <a href="http://www.wisebread.com/7-financial-must-haves-for-the-first-time-home-buyer?ref=seealso">Financial Must-Haves for the First-Time Homebuyer</a>)</p> <h2>5. Skipping the Inspection</h2> <p>You&#39;re purchasing a home that you hope will last forever, or at least well past the 30 years it will take you to pay it off. So don&#39;t trust your real estate agent with your entire life. Make sure to get a home inspection by someone you trust. You need to know what you&#39;re getting into so you can prepare. God forbid you&#39;re one year in and your foundation starts leaking or your porch starts to fall off.</p> <h2>6. Buying With Bad Credit</h2> <p>If you have terrible credit, the chances of you getting a good loan product are slim to none. And don&#39;t believe that predatory lending is dead, because it&#39;s definitely still out there. Adjustable rate loans, balloon notes, and high interest rates still exist. If you have terrible credit, contact a HUD-approved counseling agency or seek out credit counseling. Repair your credit first and only then consider buying a home. (See also: <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps?ref=seealso">Rebuild Your Credit in 8 Steps</a>)</p> <h2>7. Making Lots of Spendy Credit Activity</h2> <p>Buying a house is exciting, and you might think you also deserve a car. I hate to break it to you, but you don&#39;t. Do not, and I must emphasize this, do not buy a car before you buy a house. Do not take out a credit card. In fact, don&#39;t do anything but pay your bills and save money. Anything you do could affect your credit, and everything will change when you go to close. It could cost you your home.</p> <h2>8. Buying If You&#39;re Not Planning to Stay Put</h2> <p>Homeownership is 30 years. You may want to sell your home quicker than that, and there&#39;s nothing wrong with that &mdash; most American homeowners <a href="http://www.creditsesame.com/blog/how-long-are-americans-staying-in-their-homes/">don&#39;t stay the full 30 years</a>. But if you like moving every year, homeownership isn&#39;t for you. I decided a long time ago it&#39;s not for me. I have anxiety about signing a year lease, so a 30-year mortgage will never float my boat. If this is you, weigh your decision carefully.</p> <p><em>What mistakes have you seen homeowners make? Please share them in comments.</em></p> <a href="http://www.wisebread.com/these-are-the-8-most-common-homebuying-mistakes-foreclosure-experts-see" class="sharethis-link" title="These Are the 8 Most Common Homebuying Mistakes Foreclosure Experts See" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jennifer-holder">Jennifer Holder</a> of <a href="http://www.wisebread.com/these-are-the-8-most-common-homebuying-mistakes-foreclosure-experts-see">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">What&#039;s Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/six-options-if-youre-underwater-on-your-mortgage">6 Options if You&#039;re Underwater on Your Mortgage</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">How Long Can You Stay in Your Home After You Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/front-loaded-loans-a-financial-conspiracy">Front-loaded loans: a financial conspiracy?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Should We All Just Stop Paying the Mortgage?</a></span> </div> </li> </ul> </div> </div> </div> </div> Real Estate and Housing foreclosure home buying mistakes homebuying mortgages Mon, 03 Feb 2014 10:48:15 +0000 Jennifer Holder 1122868 at http://www.wisebread.com What Happens at a Foreclosure Auction? http://www.wisebread.com/what-happens-at-a-foreclosure-auction <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-happens-at-a-foreclosure-auction" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/8121906840_d3a626fa68_z.jpg" alt="bidders" title="bidders" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p><a href="http://www.baltimoresun.com/business/real-estate/wonk/bs-re-corelogic-completed-foreclosures-continue-to-decline-20121031,0,4507778.story">Foreclosures have declined recently</a>, but many houses are still being auctioned on courthouse steps across the country. Recently I attended one of these auctions; here is a run down of what happened and what I learned. (See also: <a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With&nbsp;Cash</a>)</p> <h2>Finding a Foreclosure Auction Near You</h2> <p>Generally the list of houses up for auction are posted at an official building in each county, and many listings are also accessible online through listing services such as <a target="_blank" href="https://www.lpsasap.com/">LPS Agency Sales and Posting</a>. These auctions are also called trustee's sales because the trustee of the mortgage is making the property available.</p> <p>The auction we attended was for Solano County in California, which covers about a dozen cities. We arrived at the Vallejo City Hall a few minutes before the scheduled auction. The auctions happen on the front steps of city hall twice a day. When we arrived, the auctioneer was sitting on the ground filling out forms. A few more people filed in and waited quietly.</p> <h2>The Auction Process</h2> <p>The auctioneer stood up and asked if everyone was ready, and then she started the auction by reading out all the listings that were canceled or postponed. Many houses get taken off the auction block because the banks have worked out a short sale or decided to modify the loan, and cancelations can happen as late as the date of the auction. After she rattled off a dozen numbers and addresses, she finally got to the actual houses for sale.</p> <p>The first house was a 2,000 sq ft property in Vallejo, and the opening bid was $147,000.</p> <p><strong>Bidding Requirements</strong></p> <p>Before bidding, the qualified bidders stepped up to show the auctioneer their money. Basically, you can only bid if you can show that you have cashiers checks that can cover the amount of the bid. The bidders all have hundreds of thousands of dollars in cashiers checks in their pockets. A few people went up with their envelopes and then the bidding began.</p> <p><strong>The Bidding</strong></p> <p>The first bid was for a penny over the opening bid, then bids of $100 and $500 came in from two or three bidders. Finally the house was sold to a bidder for $158,000. After it was sold, the winner and the auctioneer stepped to the side to fill out forms, and the buyer gave the auctioneer a number of cashiers checks adding up to at least the bid amount. Any overage would be refunded later. The whole process took about 10 minutes.</p> <h2>For Buyers With Cash, Savings Are Substantial</h2> <p>During one of the breaks we talked to the winner of the first house. He told us that usually buyers can get 25% to 30% off the market price at auction. For example, the property he purchased for $158,000 was probably worth around $200,000. However, the risk is that buyers can't inspect the inside of the houses they buy, and they are responsible for any liens such as back taxes or unpaid utilities. Buyers also need cash to close the transaction right on the spot. For these reasons, buyers are mostly professional investors or work for bigger companies.</p> <p>After they purchase these houses, they often have to deal with the unpleasant business of evicting the former owners and <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">making any necessary repairs</a>. Currently many investors are renting out houses after they buy them. They are planning to sell after the housing market recovers further. The bidder we spoke to works for a company, and he said that he buys one or two houses per day.</p> <h2>Too Many Houses, Too Few Buyers?</h2> <p>In the end only a few houses sold. Many listings went back to the bank because the starting bid was much higher than the current market price. The investors had all done their research, so they did not bid on those properties. The houses that go back to the lender eventually will end up on the open market or will be sold to other investors in batches.</p> <p>It is definitely possible to make money on these properties if you do your research and a lot of legwork in attending auctions in your area. I felt like it was actually much more transparent than <a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">buying a house from a realtor</a> because everyone knows the bids, and there isn't a lot of competition. The deal also closes right away, so it is a much more efficient process. However, it is definitely not the way to buy a house for those who need a loan or those unprepared to make substantial repairs on their new, formerly foreclosed property.</p> <p><em>Have you thought about purchasing a house at a foreclosure auction?</em></p> <a href="http://www.wisebread.com/what-happens-at-a-foreclosure-auction" class="sharethis-link" title="What Happens at a Foreclosure Auction? " rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/what-happens-at-a-foreclosure-auction">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-into-a-good-school-district-for-less">How to Get Into a Good School District for Less</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">How Long Can You Stay in Your Home After You Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Should We All Just Stop Paying the Mortgage?</a></span> </div> </li> </ul> </div> </div> </div> </div> Real Estate and Housing auction buying a house foreclosure Wed, 14 Nov 2012 10:36:46 +0000 Xin Lu 955195 at http://www.wisebread.com Farewell to Homeownership: Lessons to Share http://www.wisebread.com/farewell-to-homeownership-lessons-to-share <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/farewell-to-homeownership-lessons-to-share" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/homeowners_sold3.jpg" alt="Family in front of a home" title="Family in front of a home" class="imagecache imagecache-250w" width="250" height="153" /></a> </div> </div> </div> <p>Losing your home is a strange and alienating process. Mine is being lost right this minute, but it&rsquo;s not the end of the world. Here&rsquo;s what happened to me this year, and some advice from what I learned along the way. (See also: <a href="http://www.wisebread.com/how-to-avoid-foreclosure">How to Avoid Foreclosure</a>)</p> <h3>The Long, Slow Demise</h3> <p>The day my neighbor&rsquo;s house &mdash;<o:p> twice the size of mine and renovated &mdash; sold at auction for $65,000, I knew we were in trouble. We paid $189,000 for 1,000 square feet of non-renovated 90-year-old American dream. <em>But</em>, I thought stupidly, <em>it&rsquo;ll come back up</em>. Then, six months later, three more houses in our neighborhood foreclosed. <em>It won&rsquo;t be too bad</em>, I said to myself. Those were old single-wide trailers. They have nothing to do with us. We&rsquo;ve got a gem of a little house on an acre of land. Surely, it&rsquo;ll still be worth something. Then, six months ago, the cute, refurbished, hardwood-everything house I coveted across the way sold at auction for $20,000. It had more bedrooms and baths than mine. We were done for. </o:p></p> <p>I tried all last winter to modify our loan without success. We made too much on one application. Didn&rsquo;t owe enough to other people and weren&rsquo;t behind, so we didn&rsquo;t qualify for another.</p> <p>Then spring hit. Which wasn&rsquo;t spring, really, but a second winter. Record snow. Record rain. The basement, where the posts and piers are, flooded three times. The water table was so high that the bathroom sink no longer drained. The septic, which had been drained and cleaned the summer before when we replaced pipes, was a mess. Contractors and plumbers said good luck with that &mdash; &ldquo;You&rsquo;ve got a year before you&rsquo;re going to have to build a new one up the hill from you.&rdquo; How much would that cost? All three contractors said $60,000. Oh, and did I mention the bathroom is sinking from the wet ground? I did some investigating, and apparently our whole town is built on top of mine caverns. One good earthquake, and it all comes down.</p> <p>Math isn&rsquo;t my strong suit, but even I know that my dinky house, now more than likely worth less than $20,000, is not worth a $60,000 new septic system built on top of a hillside that apparently is just caverns a few feet down.</p> <p>The bank didn&rsquo;t seem to think it was worth fixing either. It was worth it that we pay them our mortgage, but not worth it for them to loan us more or modify it for us to fix it. So earlier this year, we decided to leave.</p> <h3>Can&rsquo;t Happen to Me</h3> <p>It&rsquo;s not like us not to pay our bills. It feels weird. Especially the phone calls. We get them every hour from the mortgage company. Once every two weeks I pick up the phone and talk to them. I tell them the same thing each time &mdash; we are leaving our house because the plumbing issues and foundation issues have left it near to condemned. You wouldn&rsquo;t help us fix it. Soon it will be yours.</p> <p>The representatives are always pleasant. But what can they do? They tell us to apply for <a href="http://www.wisebread.com/how-foreclosure-deed-in-lieu-and-short-sale-affect-credit-scores">deed in lieu</a>. In order for the bank to go for deed in lieu, the house has to be in move-in condition. That doesn&rsquo;t work for a house with winter storm damage needing a new septic. We had been remodeling the kitchen but never finished. They tell us to short sale &mdash; and then they can apply what we make from the sale to the mortgage. No one who lives in our area is going to buy this house. Everyone here knows what the winter did to these houses, and that underneath the house is a cavern waiting for the house to fall in it.</p> <p>Then I asked my lender the big picture question &mdash; which option is better for the home owner? Turns out deed in lieu and short sale are both better for the lender. But for us schmucks in the muck of home-owner disaster, it doesn&rsquo;t matter much. What does bad credit mean in the US of A anymore?</p> <p>So the bank calls me all the time now. I&rsquo;m one of their dead beats.</p> <h3>The Silver Lining</h3> <p>With the savings of not paying the mortgage for a few months, I paid off a credit card, paid off medical bills, and was able to go see my grandfather before he died. None of these things I regret.</p> <p>And there&rsquo;s kind of a happy ending.</p> <p>When I knew we were going to leave our house, I emailed a couple of friends of mine who have rentals. I stated I wanted at least a three-year lease so I wouldn&rsquo;t have to move again soon. I&rsquo;d need time to recover from all this madness. Did they have any open rentals or know a good landlord that did? My credit would be shot. I&rsquo;d need someone who would take us on recommendation that we were decent people who would pay.</p> <p>A friend wrote back. She had left the state but never sold her old house. It had been sitting empty for a couple of years. Beautiful house, but no one around here could afford to buy it, and odds are in the current market she couldn&rsquo;t get what she paid for it. She wasn&rsquo;t planning on selling it any time soon. She also bought a new house and wasn&rsquo;t returning. She&rsquo;d be less nervous about the property if someone was there to take care of it. Did we want to rent her twice-the-size-of-our-old-house, 70-years-younger, completely redone house? Yes, yes we did.</p> <p>I&rsquo;m writing to you from the new house. This feels like one of those &quot;only in America&quot; stories. The new home is in a nice area with lots of forest. The old home had a lovely view of my crackhead neighbor that used to weld in his garage at 3 a.m. Now I just have deer to contend with at night &mdash; a good trade off.</p> <h3>The Lessons for All of Us</h3> <p>It&rsquo;s the community that will help you. It&rsquo;s friends and neighbors with information. So many are suffering and in different stages of losing that we can all tell each other what&rsquo;s going to happen next, which hoop to try, etc. I&rsquo;ve gotten more information from my neighbors during our various yard and <a href="http://www.wisebread.com/how-to-have-a-successful-garage-sale">moving sales</a> than from anyone in an official capacity.</p> <p>If we were a corporation, we wouldn&rsquo;t have thought even twice about cutting our losses and getting out of there. On the books it just doesn&rsquo;t look right. Why put money into a failing investment? My husband and I are too old for that mortgage deal to ever have worked in our favor. We&rsquo;d have been dead by the time we owned it anyhow.</p> <p>Home ownership tends to be emotional, and just like we wrap up our worth in what we do for a living instead our humanity, we wrap ourselves up in our home's success or failure. I, frankly, have had enough of that.</p> <p>Yes, America, I lost my house this year because by and large I was gullible and stupid and many people took advantage of my stupidity and gullibility. Stupidly, I thought that if I owned my own home I&rsquo;d feel like less of a loser. I&rsquo;d feel (there&rsquo;s that emotion again) that I did something right and worthy of approval. I&rsquo;m sure I&rsquo;m not the only one that&rsquo;s fallen into that trap.</p> <p>But if there&rsquo;s any Wise Bread reader out there about to lose his or her home and is freaking out &mdash; don&rsquo;t freak out. We&rsquo;ve all gone home with the wrong guy before. You didn&rsquo;t die, and no one broke up with you for a cute young blonde. You helped yourself get screwed by a big giant corporation. They enjoyed it, and you feel cheap and easy. Get your clothes back on, grab your car keys and go. Hold your head high.</p> <p>I&rsquo;m a happy renter now. I love my landlady &mdash; she&rsquo;s laissez faire about the right things and concerned about the right things. I love living in a house where everything was fixed and up to code. My kids are enjoying the 1,500 extra square feet. I&rsquo;m enjoying paying out 300 less a month for a better house in a nicer neighborhood. Maybe finding a good landlord and a decent rent so that we pursue more important dreams than purchasing homes could be the new American dream.</p> <p><em>Editor's Note: The views shared by one writer does not reflect the views of all writers on Wise Bread. </em></p> <a href="http://www.wisebread.com/farewell-to-homeownership-lessons-to-share" class="sharethis-link" title="Farewell to Homeownership: Lessons to Share" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/maggie-wells">Maggie Wells</a> of <a href="http://www.wisebread.com/farewell-to-homeownership-lessons-to-share">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-tips-for-getting-your-security-deposit-back">20 Tips for Getting Your Security Deposit Back</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-into-a-good-school-district-for-less">How to Get Into a Good School District for Less</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">How Long Can You Stay in Your Home After You Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Should We All Just Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-benefits-of-having-a-roommate-besides-saving-on-rent">The Benefits of Having a Roommate (Besides Saving on Rent)</a></span> </div> </li> </ul> </div> </div> </div> </div> Real Estate and Housing foreclosure homeownership renting Fri, 09 Sep 2011 09:48:38 +0000 Maggie Wells 529937 at http://www.wisebread.com 5 Tips for Buying a Commercial Short Sale or Foreclosure http://www.wisebread.com/small-business/5-tips-for-buying-a-commercial-short-sale-or-foreclosure <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/5-tips-for-buying-a-commercial-short-sale-or-foreclosure" target="_blank">http://www.openforum.com/articles/5-tips-for-buying-a-commercial-short-sale-or-f...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/5-tips-for-buying-a-commercial-short-sale-or-foreclosure" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/iStock_000001789325Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <a href="http://www.wisebread.com/small-business/5-tips-for-buying-a-commercial-short-sale-or-foreclosure" class="sharethis-link" title="5 Tips for Buying a Commercial Short Sale or Foreclosure" rel="nofollow">ShareThis</a><p>There was a time when snatching up a commercial property through a short sale or a foreclosure involved finding a fixer-upper and then hunkering down for some serious red tape.</p> <p>But with default rates for commercial real estate mortgages skyrocketing in some parts of the country, banks and other lenders are becoming more flexible in working with buyers just to get non-performing loans off their books.</p> <p>&ldquo;In 2006 and 2007, we dealt with virtually no commercial foreclosures,&rdquo; says Adam Von Romer, director of Commercial Capital Advisors in the Fort Lauderdale area. &ldquo;Now, it&rsquo;s one out of every two cases we see.&rdquo;</p> <p>Financial hardships, brought on by changing consumption patterns, increased competition, construction delays or production shifts overseas, can lead a business to default on a commercial mortgage loan. In the end, the lender(s) can either agree to accept less than the full balance of the loan at closing (a short sale), or seize the property through an expensive and time-consuming foreclosure process.</p> <p>In either scenario, an informed buyer can reap substantial savings (in some markets, high-end office condominiums are being offered at 30 cents on the dollar). Nationally, commercial foreclosure filings have jumped by more than 500%, from 3,597 in 2006 to 21,869 in 2010, according to RealtyTrac, a foreclosure listing company.</p> <p>Before diving into an uncertain market, however, you&rsquo;ve got to do some homework.</p> <h3>Become a Detective</h3> <p>Be ready to dig for foreclosures or other commercial properties sold through short sale. Online databases, courthouse listings and legal ads offer some insight. You may try approaching banks, mortgage companies or other financial institutions to inquire about their current listings of foreclosed commercial properties. Good customers with a demonstrated track record and contacts within the institution are generally more successful.</p> <p>For added support, hire an experienced commercial real estate agent as a buyer&rsquo;s agent, who can scope out properties through specialized databases. Make sure to find someone who has connections to lenders and experience working with commercial property short sales and foreclosures. Often, these properties are sold off-market, meaning that they are never formally advertised, says Michael Bull, president and founder of Bull Realty based in Atlanta. A buyer can offer a broker a reasonable fee, which can vary from less than one percent to ten percent of the purchase price, as a commission to find these hidden gems.</p> <h3>Do Your Due Diligence</h3> <p>Even the best bargain can be a flop if it doesn&rsquo;t fit your business objectives.</p> <p>&ldquo;If you&rsquo;re buying it for your business, it needs to be the right property,&rdquo; advises Bull, who also hosts a national talk radio show about commercial real estate and works with nearly 300 lenders handling commercial foreclosures. &ldquo;Don&rsquo;t compromise on that.&rdquo;</p> <p>Determine what the property is worth (the bank likely won&rsquo;t tell you) and its profit potential, paying special consideration to location, access, and visibility. If it&rsquo;s an income-generating property, evaluate the strength of the tenants. Mortgage companies typically require an attornment clause in commercial loans, which safeguards existing tenants against having to sign new leases if a property slips into foreclosure. Avoid questionable lease arrangements, such as when a seller in default executes a 40-year lease for $3 per square foot with his brother-in-law.</p> <p>&ldquo;No matter what else happens, get title insurance,&rdquo; urges Von Romer of Commerical Capital Advisors.</p> <p>Conduct a uniform commercial code search to ensure that any equipment in the building or anything attached to the building is not subject to leases or a chattel mortgage. Check for code violations and open permits.</p> <p>Even more important in a short sale is making sure that no one else can lay claim to the property, since a secondary lien may not be extinguished automatically. In foreclosure situations, get permission from the bank to conduct an inspection and require copies of any environmental assessments performed.</p> <h3>Show Me the Money</h3> <p>Before you buy, you&rsquo;re going to need cash on hand or ready access to cash. &ldquo;People always say location, location, location, but buying a commercial foreclosure is all about timing,&rdquo; says Marcia Mueller, president of Westbrook Realty in Denver. When applying for a commercial foreclosure loan, the lender will require detailed financial records for your business, along with an appraisal, valuation, and inspection of the property. Lenders tend to prefer owner-occupied properties to those backed by investors at a distance.</p> <p>In a bidding war, &ldquo;lenders want to be confident that the horse they picked gets to the end of the race,&rdquo; notes Bull, who recommends that buyers submit a copy of their bank statement or other proof that cash is available, and offer the largest amount of earnest money that they can afford.</p> <p>Von Romer suggests avoiding bidding-up situations entirely. &ldquo;Buyers need to determine their line in the sand and be prepared to walk away,&rdquo; he says.</p> <h3>Skip the Letter of Intent</h3> <p>Once a property is owned by the bank, the opportunity for drawn-out negotiations may evaporate. Rather than compete with five other letters of intent buried on a banker&rsquo;s desk, Bull suggests cutting to the chase and offering your best offer upfront in a purchase and sale contract drafted by a real estate attorney. Sign in blue ink and have it overnighted to those handling the transaction.</p> <p>When you make an offer, know with whom you&rsquo;re dealing. Small community banks worried about staying aflo<span>a</span>t may be more willing to accept lowball offers, while large, affluent banks may prefer to hold on to the property.</p> <p>Consider shortening the contingency period for a more attractive offer. This will depend on the size and price of the property. The inspection period on an eight-unit apartment building might be wrapped up in three days, while it could take more than two months for a mammoth shopping center.</p> <p>The timing of the offer is also important, notes Bull. Banks may be more willing to play ball at the end of a quarter.</p> <h3>Be Patient</h3> <p>In this topsy-turvy market, you may not receive a response from the lender. If the property is worth the time and energy, revisit it a few months down the road and reevaluate its potential. Then, the bank may be in a better (i.e., more desperate) position to sign on the dotted line.<i><br /> </i></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/margie-fishman">Margie Fishman</a> of <a href="http://www.wisebread.com/small-business/5-tips-for-buying-a-commercial-short-sale-or-foreclosure">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-foreclosure-deed-in-lieu-and-short-sale-affect-credit-scores">How Foreclosure, Deed in Lieu, and Short Sale Affect Credit Scores</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">How Long Can You Stay in Your Home After You Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Should We All Just Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/forgiven-mortgage-debt-may-lead-to-huge-tax-bills">Forgiven Mortgage Debt May Lead to Huge Tax Bills</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-happens-at-a-foreclosure-auction">What Happens at a Foreclosure Auction?</a></span> </div> </li> </ul> </div> </div> </div> </div> Real Estate and Housing Small Business Resource Center business purchase business sale commercial real estate commercial short sale foreclosure short sale small business Fri, 29 Jul 2011 19:30:15 +0000 Margie Fishman 620271 at http://www.wisebread.com How Long Can You Stay in Your Home After You Stop Paying the Mortgage? http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/godbless.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="200" /></a> </div> </div> </div> <p>Even though the economy seems to be getting better, <a href="http://seekingalpha.com/article/196760-mortgage-delinquencies-continue-to-rise">the number of mortgage delinquencies is still rising</a>. Some homeowners are choosing to walk away because their debts are much higher than what their houses are worth, and many others just cannot afford their mortgages any longer. Although I am not thinking of walking away from a mortgage, I wondered how long those who stop paying their mortgages can live in their homes before the lenders kick them out. Here are some real life examples of people who lived in their homes for months or even years after stopping payment.</p> <h3>Martha Shickley</h3> <p>According to this recent <a href="http://online.wsj.com/article/SB20001424052702303429804575150161178252530.html">Wall Street Journal report</a>, the Shickleys decided to stop paying their mortgage in August, 2009 and have not even received a default notice as of March 2010. That is a whole eight months of free housing and it is not over yet. This family stopped paying because they have an interest only mortgage and is now using their money to pay off other debts.</p> <h3>Ron Nash</h3> <p>This man was featured in the <a href="http://money.cnn.com/galleries/2009/real_estate/0908/gallery.Life_after_foreclosure/3.html">CNN Life After Foreclosure</a> slideshow and he vacated his home after not paying for the mortgage for 18 months. He feels that he &quot;landed on his feet in just about every way.&quot; His mortgage was $5,600 a month and he moved his family into a $1,900 a month rental..</p> <h3>Shawn Aaron</h3> <p>This Florida homeowner stopped paying for the mortgage on his 5,800 square foot home <a href="http://www2.tbo.com/content/2010/apr/02/feeling-entitled-homeowners-walk-away-or-loot-fixt/news-money/">more than two years ago</a>. He says that since his loan was sold to a new lender he doesn't have a contract with the new lender and does not have to pay the mortgage. He even started a company to help homeowners fight banks.</p> <h3>Louis Tondu</h3> <p>This airline mechanic stopped paying in June 2009, and was still <a href="http://realestate.msn.com/article.aspx?cp-documentid=23390500">living in his residence in February 2010</a>. He said his bank has not filed a notice of sale and expects to live there until May 2010.</p> <p>These are just a few of the many homeowners who decided to stop their mortgage payments. Although these few cases are by no means conclusive, the general political and corporate policies of the present are stretching out the length of time people get to stay in their houses after stopping payments. Some homeowners are even <a href="http://www.nytimes.com/2009/03/30/us/30walkaway.html?_r=2&amp;hpw">finding that they were not foreclosed on after they moved out</a> because banks deemed their properties to be too costly to take back.</p> <p>Recently Paul Michael of Wise Bread wrote about <a href="http://www.wisebread.com/citimortage-told-me-to-default-on-my-loan-if-i-want-their-help">his thoughts on walking away from his mortgage</a>, and if he really does it I would be interested to read about how long it takes the bank to actually get to the stage of eviction. Are you more likely to walk away from your underwater <a href="http://www.wisebread.com/redir/mortgagerates">mortgage</a> knowing that you could possibly live in the home for another two years?</p> <a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage" class="sharethis-link" title="How Long Can You Stay in Your Home After You Stop Paying the Mortgage?" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Should We All Just Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-skip-a-mortgage-payment-to-get-a-banks-attention">Should you skip a mortgage payment to get a bank&#039;s attention?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-afford-payments-on-your-adjustable-rate-mortgage">How to Afford Payments on Your Adjustable Rate Mortgage</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/things-i-wish-i-knew-before-i-bought-my-second-house">Things I Wish I Knew Before I Bought My Second House</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-great-reasons-for-paying-off-the-mortgage-on-your-home">6 Great Reasons for Paying off the Mortgage on Your Home</a></span> </div> </li> </ul> </div> </div> </div> </div> Real Estate and Housing foreclosure mortgage real estate Tue, 06 Apr 2010 14:00:06 +0000 Xin Lu 6233 at http://www.wisebread.com How Foreclosure, Deed in Lieu, and Short Sale Affect Credit Scores http://www.wisebread.com/how-foreclosure-deed-in-lieu-and-short-sale-affect-credit-scores <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-foreclosure-deed-in-lieu-and-short-sale-affect-credit-scores" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/foreclosure_0.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Currently millions of Americans are delinquent on their home loans or facing foreclosure. Foreclosure, deed in lieu of foreclosure, and short sales are several ways for borrowers to get out of a mortgage that is no longer affordable. Here is a quick guide to what these options are, and how much they could affect one's <a title="Wise Bread's Guide to Credit Scores" href="http://www.wisebread.com/debt/credit-scores">credit score</a>.</p> <h2>Foreclosure</h2> <p>A foreclosure happens when a borrower has defaulted on a property and the lender claims ownership of the property. Usually lenders start the foreclosure process after three missed payments. The property would then be sold at a public auction. The impact of the foreclosure to a borrower's FICO score is around 200 to 300 points if you include the effects of the missed payments. A foreclosure stays on your credit report for seven years.</p> <h2>Deed in Lieu</h2> <p>A deed in lieu of foreclosure is where the borrower gives the deed back to the lender with the lender's approval. The lender also forgives the remaining balance on the loan. The borrower still loses the home. It depends on how the lender reports this to your credit report but the credit drop could be as large as a real foreclosure and the record would stay for seven years. If your lender does accept a Deed in Lieu then you could try to negotiate with them to not put a foreclosure notification in your credit record, but if you had late payments your credit would still be affected.</p> <h2>Short Sale</h2> <p>This is not exactly a foreclosure, but a deal with the lender to sell a home for less than what is owed. Basically the borrower has to find a buyer who is willing to purchase the home at a price approved by the bank. The credit impact depends on how many late payments there are. If a short sale is completed without any late payments then the credit impact would be much less than that of a foreclosure. If the borrower accrues a significant amount of late payments during the short sale then the credit impact could still be as much as 200 points.</p> <p>If you have to default on your mortgage, just remember that losing a home is not the end of the world and credit can be rebuilt. It generally takes two to three years for someone who went through one of the above events to qualify for another home loan. If a borrower keeps payments current on obligations other than the mortgage then the foreclosure would be an isolated negative event and that would not be indicative of a history of bad credit. This is why those who strategically walk away from their homes keep current on their credit cards and other loans because they can get back their &quot;prime&quot; credit score fairly quickly.</p> <p><em>Have you gone through one of these events? How did it affect your credit score?</em></p> <a href="http://www.wisebread.com/how-foreclosure-deed-in-lieu-and-short-sale-affect-credit-scores" class="sharethis-link" title="How Foreclosure, Deed in Lieu, and Short Sale Affect Credit Scores" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/how-foreclosure-deed-in-lieu-and-short-sale-affect-credit-scores">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">How Long Can You Stay in Your Home After You Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-appraisals-ten-things-most-people-just-dont-understand-about-them">Real Estate Appraisals - Ten things most people just don&#039;t understand about them</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent">Why you can&#039;t trust a real estate agent.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-you-fire-your-real-estate-agent">When Should You Fire Your Real Estate Agent?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Should We All Just Stop Paying the Mortgage?</a></span> </div> </li> </ul> </div> </div> </div> </div> Real Estate and Housing credit report deed in lieu foreclosure real estate short sale Fri, 13 Nov 2009 15:00:02 +0000 Xin Lu 3824 at http://www.wisebread.com Tips for Avoiding a Foreclosure Prevention or Loan Modification Scam http://www.wisebread.com/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/foreclosure.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Rising home loan delinquencies and foreclosures have made con artists very&nbsp; busy.&nbsp; These scammers use the public records to find homeowners who are in trouble, and then use a variety of schemes to take the homeowners'&nbsp; money and property in the name of helping the homeowner avoid foreclosure.&nbsp;&nbsp; If you have late payments on your home loan then it is likely that you will be targeted. The following are some warning signs that you are dealing with a possible scammer.</p> <p><strong>Unsolicited contact </strong>- If you receive an unsolicited call or letter promising help, verify that the person promising help is actually from your lender or servicer.&nbsp; Technically only your lender or servicer has the power to modify your loan.&nbsp; Scammers use the public records to find out the default status of homeowners, and some of them<a href="http://www.latimes.com/news/local/la-me-mortgage-fraud6-2009jul06,0,6867637.story"> pretend to be the lender holding the lien</a>.&nbsp; However, you can usually verify if the offer for help is real by contacting your lender's public customer service line.<br /> <strong><br /> Pretending to be from the government</strong> - We all know that there has been several federally sponsored <a href="http://www.wisebread.com/details-of-obamas-mortgage-plan-released-will-you-benefit">loan modification</a> and <a href="http://www.wisebread.com/the-more-questionable-aspects-of-the-housing-bailout-bill">bank&nbsp; bailout programs</a>.&nbsp; However, these programs ask homeowners to contact their lenders for help.&nbsp; If you receive unsolicited contact from someone saying they are affiliated with the government then it is a warning sign it's a scammer trying to sound legitimate.</p> <p><strong>Great promises </strong>- Con artists are usually very good salesmen, and many of them promise that they can get the homeowner out of trouble with certainty.&nbsp; If it sounds too good to be true it usually is.</p> <p><strong>High pressure </strong>- If the nice promises do not work, some scammers go straight for the vulnerability of those in trouble.&nbsp; For example, they would ask a person if they really want to live on the streets.&nbsp; If you feeling pressured or threatened by someone promising to help then it is a sign to walk away.</p> <p><strong>Advanced fees&nbsp; </strong>- If a company asks you for a few thousand dollars to start&nbsp; the process, it's most likely a scam.&nbsp; When a legitimate lender modifies or refinances your loan they add up the costs at closing. Once you hand over the advanced fee there is really no guarantee that the company will do anything. There are legitimate housing counselors that charge fees for their services, but consumers should make sure that they have actually received the services before paying.</p> <p><strong>Diverted mortgage payments</strong> - Some scammers tell a troubled homeowner that they already negotiated a lower mortgage with the lender and that the homeowner should send the lower payment to the scammers instead of the lender. Even though this scheme is fairly easy to verify through the lender, sometimes troubled homeowners do not figure out that the lender is not receiving any money until months later.</p> <p><strong>Suspicious advice</strong> - Scammers often give advice such as &quot;stop talking to your lender&quot; or &quot;you are not obligated to pay your loan.&quot;&nbsp; They want the troubled homeowner to talk to them only.&nbsp; Make sure to communicate with your actual lender.</p> <p><strong>Property transfer</strong> - Many scammers ask troubled homeowners to sign over the property so that they could make the mortgage payments.&nbsp; The fact is that the scammers do not have to make mortgage payments on the property, and often times they use the properties to defraud&nbsp; lenders.</p> <p><strong>Power of attorney </strong>- Some scammers ask troubled homeowners to sign over the power of attorney to another person.&nbsp; This basically allows them to act on the homeowner's behalf on many legal documents.&nbsp; Giving away the power of attorney is actually worse than signing away the home.</p> <p>If you suspect that you are being scammed you should definitely report the details to the <a href="https://tips.fbi.gov/ ">FBI </a>or the <a href="http://www.ftc.gov/bcp/ ">FTC</a> as well as your local consumer protection agencies.&nbsp; If you really need help dealing with your lender then there are <a href="http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm">legitimate housing couselors available at the HUD </a>and their services do not cost thousands of dollars.&nbsp;</p> <p><em><strong>Have you been contacted by a scammer or have you been scammed?&nbsp; What did you do?&nbsp; </strong></em></p> <p>&nbsp;</p> <a href="http://www.wisebread.com/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam" class="sharethis-link" title="Tips for Avoiding a Foreclosure Prevention or Loan Modification Scam" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-vicious-home-rental-scam-dont-get-conned">The vicious Home Rental Scam – don’t get conned.</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-can-renters-do-if-their-landlords-are-in-foreclosure">What can renters do if their landlords are in foreclosure?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-mystery-shopping-scam-that-could-cost-you-a-fortune">The mystery shopping scam that could cost you a fortune.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-the-nasty-secret-of-the-craigslist-free-section">Beware, The Nasty Secret Of The Craigslist Free Section</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/five-reasons-not-to-apply-for-a-loan-modification-in-the-home-affordable-modification-program-hamp">5 Reasons Not to Apply for a Loan Modification in the Home Affordable Modification Program (HAMP)</a></span> </div> </li> </ul> </div> </div> </div> </div> Consumer Affairs Real Estate and Housing foreclosure loan modification scam Fri, 10 Jul 2009 16:00:09 +0000 Xin Lu 3372 at http://www.wisebread.com What can renters do if their landlords are in foreclosure? http://www.wisebread.com/what-can-renters-do-if-their-landlords-are-in-foreclosure <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-can-renters-do-if-their-landlords-are-in-foreclosure" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/eviction.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="333" /></a> </div> </div> </div> <p>Lately many tenants across the United States who faithfully paid their rents on time were surprised to find eviction notices tacked on their doors because their landlords have not been paying the mortgage.&nbsp; Other tenants are receiving &quot;cash for keys&quot; offers from the banks that reposessed the homes.&nbsp; If you are a renter, here are some precautions you can take to make sure you do not face an unexpected foreclosure related eviction and also a few tips on what to do if your landlord is losing the home you live in.</p> <p>If you are living in a rental home now in a state with a high rate of foreclosure such as Nevada, Florida, or California, then you should definitely check the public records for any liens or judgments on the home you live in.&nbsp; Fortunately, many counties now have land and tax records online.&nbsp; For example, for San Mateo County you can simply search for &quot;San Mateo Tax Assessor&quot; and find the Tax Assessor's homepage.&nbsp; From there you can search for a specific address and see if the taxes are paid ontime.&nbsp; If the taxes are late or in default on the property, then that is a warning sign that the property may be in financial trouble.&nbsp; You can also search the land records to find any Notice of Defaults, which is usually the first step in a foreclosure in California.&nbsp; If public records are not available online where you live, then you could go to the county seat and search for the record at the county offices.&nbsp; Public records are available to anyone, but some offices charge a small fee to do a search for you.&nbsp; You can also find detailed information such as which bank holds the mortgage on the home, and what the mortgage amount is.</p> <p>Another way to check if the home you are renting is in financial trouble is by searching the local real estate listings.&nbsp; It is possible that your home is on the market as a short sale and your landlord did not inform you.&nbsp; If that is the case then the home is probably about to foreclose.</p> <p>If there is any sign of financial distress then it may be a good idea to speak to your landlord and ask what is going on.&nbsp; If your landlord tells you everything is okay when there is a Notice of Default in the public records, then he or she may not be completely honest with you and it is probably a good idea to find a new place and get your security deposit back.</p> <p>If you already received a &quot;cash for keys&quot; or eviction letter from the bank then you should also check the public records to see if the bank already owns the home.&nbsp; If the bank is indeed the recorded owner then you should definitely stop paying your old landlord rent.&nbsp; At this point you could either pack your bags or try to negotiate with the bank.&nbsp; Some banks may prefer to have occupied homes because they are less likely to be vandalized so in rare instances they are willing to sign new leases, but you still have to be ready to leave when the home sells.</p> <p>Eviction laws also differ from state to state so in some cases it is worthwhile to fight a foreclosure related eviction.&nbsp; <a href="http://www.thecrimson.com/article.aspx?ref=525883">In this article from the Harvard Crimson</a>, a group called No One Leaves is helping renters in Boston stay in their homes and get settlements from banks because in Massachusetts foreclosure is not legal grounds for eviction.&nbsp;&nbsp;&nbsp; However, this is not true in every state so you must research if a legal battle is worthwhile for your situation.&nbsp; Fighting an eviction also makes a renter undesirable to other landlords in the future even if the renter wins so you must make sure that you are willing to take that risk.&nbsp; <br /> &nbsp;</p> <p>The good news is that the powers that be are realizing that these unjust and surprising evictions are becoming problematic for many communities.&nbsp; In July California passed a law that gives tenants a 60 day notice to leave a rental unit after the property is sold in foreclosure, and yesterday <a href="http://www.nytimes.com/2008/12/15/business/15evict.html?em">Fannie Mae announced that it will not evict renters in the foreclosed homes it owns</a>.&nbsp;&nbsp;&nbsp; Hopefully other banks will follow suit and keep the good renters in their homes as long as they need. For now, if you are a renter, remember to protect yourself by verifying the ownership and financial status of a home through public records. Since landlords usually run credit checks on tenants, I think it is only fair for renters to find out the financial situation of their landlords.&nbsp; Hopefully in the future landlords will be required to disclose their financial troubles for the benefit of renters.</p> <p><em><strong>Have you been evicted due to your landlord's failure to pay mortgage?&nbsp; What did you do?</strong></em><br /> &nbsp;</p> <a href="http://www.wisebread.com/what-can-renters-do-if-their-landlords-are-in-foreclosure" class="sharethis-link" title="What can renters do if their landlords are in foreclosure?" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/what-can-renters-do-if-their-landlords-are-in-foreclosure">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-tips-for-getting-your-security-deposit-back">20 Tips for Getting Your Security Deposit Back</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-skip-a-mortgage-payment-to-get-a-banks-attention">Should you skip a mortgage payment to get a bank&#039;s attention?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-more-questionable-aspects-of-the-housing-bailout-bill">The Questionable Aspects of The Housing Bailout Bill - H.R. 3221</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-does-the-fannie-mae-and-freddie-mac-bailout-affect-you">How does the Fannie Mae and Freddie Mac bailout affect you?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-check-if-your-mortgage-statement-is-correct">How to check if your mortgage statement is correct</a></span> </div> </li> </ul> </div> </div> </div> </div> Personal Finance Consumer Affairs Real Estate and Housing eviction foreclosure landlord renter Mon, 15 Dec 2008 20:53:01 +0000 Xin Lu 2649 at http://www.wisebread.com Should We All Just Stop Paying the Mortgage? http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-we-all-just-stop-paying-the-mortgage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/relax-4492310-small.jpg" alt="tossing papers" title="tossing papers" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>I&#39;ve been recovering from surgery recently, so that has given me the opportunity to do a lot of thinking on my sick bed. And with the recent turmoil in the economy, plus a focus on the housing market, I couldn&#39;t help a certain thought from bubbling up in my mind day after day. It&#39;s not responsible; it&#39;s not even fair; but I do have to wonder&hellip;should we all just stop paying the mortgage? (See also: <a href="http://www.wisebread.com/how-to-refinance-your-mortgage">How to Refinance Your Mortgage</a>)</p> <p>From what I understand, the $700 billion bailout plan has some provisions in it that will help struggling homeowners. John McCain also recently talked about using $300 billion of that money to &quot;buy back&quot; bad mortgages to help the struggling homeowner negotiate a decent, fixed rate. They may even renegotiate the cost of the mortgage, so you only pay what your home is now worth, not what you actually owe. Sounds great, right?</p> <p>But it got me thinking&hellip;what about the people who did everything right? Take someone I know well &mdash; me. I bought my house almost seven years ago. I stayed well within my means and avoided any adjustable rates or sub-prime loans. I got myself a nice, traditional 30-year fixed mortgage at a good rate. I even got the homebuilder to pay the closing costs without rolling them into my loan.</p> <p>Now, after being a homeowner for seven years, I am proud to say that I have NEVER missed a mortgage payment. Ever. Sure, times were tough on occasion. Sometimes I would pay the mortgage a few days late because there just wasn&#39;t enough cash in the bank. But the mortgage was paid, even if it meant staying home every night and eating Ramen occasionally.</p> <p>What&#39;s more, I never used my home as a bank account. Even when the home was worth more than we paid for it (ahh, remember equity?) I never refinanced. I never got a home equity loan. I just stayed the course, knowing that after about five years my growing family would have some ready funds available to upgrade to a bigger home. (See also: <a href="http://www.wisebread.com/things-i-wish-i-knew-before-i-bought-my-second-house">Things You Should Know Before You Buy Your Second Home</a>)</p> <p>Well, all those plans were shattered. Now, my home is worth 15% less than I paid for it. I will be lucky if I break even when I sell it, considering the dreadful market and the associated costs involved in selling a house. My wife and I are even thinking of renting it out, and renting a bigger place for ourselves. With the market the way it is, we can rent a house twice the size of ours for the same price as the mortgage.</p> <p>But here&#39;s the big question. Should we just stay in the house and stop paying the mortgage completely? <a href="http://www.signonsandiego.com/uniontrib/20081010/news_lz1e10schiff.html">An article I recently read by Peter Schiff </a> seems to confirm my thinking. Let&#39;s look at the pros and cons. First, if we stop paying the mortgage we know we won&#39;t be kicked out. There will be a moratorium put on foreclosures, so we could quit paying our largest bill and put that money in the bank, ready to use to buy a new home.</p> <p>Second, as we have now stopped paying our mortgage we would fall into the category of &quot;struggling homeowner.&quot; Which means, ladies and gents, that the government will swoop in and help us out! Yep, as unfair as it sounds, we&#39;ll get help if we suddenly become irresponsible. My mortgage would be renegotiated, probably at a lower rate, and for the current price of my home. Plus, I&#39;ll have saved thousands on mortgage payments until that happens. It could take six months&hellip;that&#39;s around $10,000 we&#39;ll have saved.</p> <p>The only downside I can see would be a tarnished credit rating. But so what? For the amount of money I&#39;m saving, it seems well worth it. And I&#39;ll still keep my house. (See also: <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">10 Surprising Ways to Hurt Your Credit Score</a>)</p> <p>This is wrong. I will, no doubt, keep paying my mortgage. But I cannot help but be angered by this whole system. It is rewarding people who made bad, bad choices. No&nbsp;one forced anyone to buy a home way bigger than they could afford. No&nbsp;one put a gun to Joe Schmo&#39;s head and said &quot;Hey, sign this, take a huge mortgage and do it with an adjustable, interest-only rate.&quot; And yet those guys, the ones who bit off way more than they could chew, are now going to get help. They get to keep their big house and pay a nice new low-rate mortgage. They don&#39;t even have to pay back the money they didn&#39;t pay on mortgage payments.</p> <p>Now, there are exceptions to the rule. People who lost their jobs and couldn&#39;t pay the mortgage, they genuinely need the help. People who got sick and had massive medical bills to pay, fair enough. But for the average greedy speculator who bought too much house with no money down and a sharply rising interest rate&hellip;well, in my opinion, that person should have to live with the consequences. I have my own problems, as do many of you. But why should my hard-earned taxes bail out the irresponsible segment of our society? It&#39;s complete BS.</p> <p>The one reason I&#39;ve been given is that we need to help these people, or our home values will suffer. But the market has pretty-much bottomed out anyway. So, that&#39;s no consolation to me. No, I&#39;m mad as hell and I just can&#39;t think of a better way to prove it than to stop paying my mortgage and get in on this nationwide handout. How about you?</p> <a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage" class="sharethis-link" title="Should We All Just Stop Paying the Mortgage?" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-secrets-to-refinancing-an-underwater-mortgage">7 Secrets to Refinancing an Underwater Mortgage</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">How Long Can You Stay in Your Home After You Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/citimortage-told-me-to-default-on-my-loan-if-i-want-their-help">CitiMortgage Told Me to Default on My Loan</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-the-subprime-lending-boom-hurt-everybody">How the subprime lending boom hurt everybody</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-home-renovations-that-almost-pay-for-themselves">10 Home Renovations That Almost Pay for Themselves</a></span> </div> </li> </ul> </div> </div> </div> </div> Real Estate and Housing bailout Economy foreclosure mortgage refinance Thu, 16 Oct 2008 15:42:00 +0000 Paul Michael 2524 at http://www.wisebread.com