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Archive for the ‘Foreclosure’ Category

Distressed Homeowners. Options for your Stamford Short Sale.

Monday, October 18th, 2010




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Real estate is not always an easy venture to be involved in. Mortgages are huge loans, and monthly payments can be extremely steep. Especially with the trend a few years back to give out sub-prime mortgages, there have been a lot of foreclosures lately. But foreclosure should be avoided at all costs.
So let’s assume for a moment that you are unable to make your mortgage payments. You become a defaulted owner. Now what? Well, typically, your lending institution will foreclose its mortgage. If this happens, not only will you lose your property when it goes back to the bank, you will lose all your equity. In addition, foreclosure reduces your credit rating, leaving a permanent stain on your credit account. This can be extremely hard to remove, and may prevent you from ever borrowing again. Finally, you may even have to pay taxes on the debt reduction amount. So in trying to save money, you’ve only added another expense to your list of bills. All in all, foreclosure is a bad deal for you.
There are two main types of foreclosure, foreclosure by judicial sale (the type we have here in Connecticut) and foreclosure by power of sale. In the former, the court supervises the sale of the property. In the latter, the bank or mortgage holder sells the home. In a strict foreclosure, not in use in all states, the bank would assume the deed of the defaulted mortgage, without the obligation to sell. This method is less popular as few banks want to become landlords. Usually, by whatever means, the foreclosure involves the sale of the property. In Stamford, CT Foreclosures are Judicial.
If you are unable to make the mortgage payments on your Stamford, CT home, or in any other way are unable to fulfill the obligations of your lending contract, it is best if you sell your real estate as soon as possible. This may mean selling at a much lower rate than market value, however as a homeowner, you may be able to retain some equity from your home, and you will definitely save your credit rating. This is very important for your future real estate purchases, and just about anything else in your life. By selling your home yourself, with or without the help of an agent, you are keeping the power in your hands. Even if you come out of it with no equity, the chances of losing money is slim unless your home has become totally derelict. Even then, you are still better off selling it yourself than allowing a foreclosure to go ahead.
While in a stressful situation such as mounting debt, it can seem like the easy thing to drop everything and run. But as I’ve outlined, it is never to your advantage to let a property foreclose. The key to saving yourself from this fate may be an honest analysis of your expenses. If you can see a problem coming, you have more time to act on it. Rather than waiting to the last minute, put your home up for sale as soon as you suspect you will have trouble making payments in the future. The more time you have to sell, the more likely you’ll walk away with a fair price for your property. You may even be able to find another, cheaper home, and nobody will have been the wiser that you narrowly escaped financial disaster.

Nicole Borsey is a Stamford Short Sale Expert.

Contact her for FREE advice. There ARE options!!!



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Short sales-Protect your credit score

Saturday, October 9th, 2010




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It is in the news. Bank of America suspends foreclosures. This does not let you off the hook; you will just dangle a little longer. But it gives you time to start the short sale process and limit the damage to your credit history. Remember, a foreclosure stays with you forever, can affect your security clearance, and can even affect the value of your neighbor’s homes. Contact me now if you have a hardship and can not maintain your mortgage payments.



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Flip That House!

Sunday, March 14th, 2010




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Flip That House!

-By your Staff Writer for the Property Network, Matt Giles

If you can afford to buy, renovate and sell a house right now, good for you! You are doing way better than most people. Flipping houses is a great way to make money and with this economy, now is the time to buy.

The ideal situation is to buy now, fix it up and rent until the real estate market comes back into full swing, then sell. Even if you buy now and sell it is worth it. But just remember the market is what it is right now, so don’t expect to be making a fortune on flips, unless you buy something really low and sink some money into it and sell for a moderate price.

Now, if I were you and could flip houses the first thing I would do is make buddy-buddy with a real estate agent (I would suggest Nicole Borsey, she is the only real estate agent I would trust with a project like this). Real estate agents get the listings first and by making friends with one or two can help get you the inside tip to a great buy. Plus they are always full of great suggestions to get the most bang for your buck on renovations.

Foreclosures and bank owned properties are a great place to start. Banks just want enough money so it is not a loss for them. So if the house is worth $300,000 but the bank only needs a $150,000 to cover the rest of the mortgage, you can probably get the house for around a $150k. This is sweet because it already puts you a head of the game when it comes time to resell.

Know your numbers. What you can afford to put into the house and what you will get out of the house. Go over the numbers with your contractor and than go over them again. Don’t go over. Stick to the numbers.

Once you find your property and get your mortgage, you have to really look at what is worth fixing in the house. Is it going to be a good return on investment??? Kitchens and bathrooms are usually the money makers. You give a kitchen a make over and it is usually instant relief when someone walks into the house.

*****Remember if you open up the walls, whatever you find behind the sheetrock has to be brought up to code if it is below code standards. So opening up the walls can be a gamble, if you find that you need to up date all the electric and plumbing the price of poker just went up.******

Finding a contractor you can trust is worth it’s weight in gold. Some contractors are willing to work with you if they know they are getting more work on the next house. Having a contractor who is consistent, uses good sub contractors and can get the work done quick, clean, and at a good price is key to flipping houses.

If you are going to do the work yourself on nights and weekends, flipping a house is not a quick process. There are advantages to doing it yourself if you are capable of doing the work. If you are not…by all means don’t be ashamed to hire someone. I have friends that think they are more “handy” than they really are around the house. They cause more damage and make the job cost twice as much if they hired someone. Figure out what your time is worth and where you make more money, being a contractor or doing whatever it is you do everyday. More than likely you will make more money at your job rather than the contactors.

Finally, don’t pull a Richard Gere in Pretty Woman, DON’T FALL IN  LOVE! It’s a flip. You come in, do the work and get out. No need to get emotionally involved in the house. The house knows what you are using it for; it’s why you paid for it in the first place. You wanted something quick. It’s nothing personal, it’s a business deal. You are in it to make money, remember that.

-Matt Giles, Staff Writer for the Property Network, Freelance writer for hire. For more info visit www.mdgcopywriting.com



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Foreclosure Solutions

Wednesday, January 27th, 2010




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Foreclosure Solutions

The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Stamford-area residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:

Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.

Benefit: Does not require the mortgage company or lender’s approval.

Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan

A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

Benefit: Allows the homeowner to make back payments over time.

Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan

Drawback: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

Benefit: Allows homeowner to keep property indefinitely.

Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a ‘friendly foreclosure’, a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.

Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.
Bankruptcy

Many have considered and marketed bankruptcy as a ‘foreclosure solution,’ but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

Benefit: Does not require lender approval.

Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.
Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

Benefit: In some cases, this will lower payments.

Drawback: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process.
Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.

Drawback: Must be ac



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Buying Foreclosures

Tuesday, January 26th, 2010




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Buying bank owned properties
There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject.   Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”.  The fact is that there are no secrets, and to make money does require effort.
What’s an REO?
REO stands for “Real Estate Owned”.  These are properties that have gone through foreclosure and are now owned by the bank or mortgage company.  This is not the same as a property up for foreclosure auction.  When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process.  You must also be prepared to pay with cash in hand.  And on top of all that, you’ll receive the property 100% “as is”.  That could include existing liens and even current occupants that need to be evicted.  A REO, by contrast, is a much “cleaner” and attractive transaction.  The REO property did not find a buyer during foreclosure auction.  The bank now owns it.  The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.  Do be aware that REO’s may be exempt from normal disclosure requirements.  In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects they are aware of.
Is it a bargain?
It’s commonly assumed that any REO must be a bargain and an opportunity for easy money.  This simply isn’t true.  You have to be very careful about buying a REO if your intent is to make money off of it.  While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it.  When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.  The bargains with money making potential exist, and many people do very well buying foreclosures.  But there are also many REO’s that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most banks have a REO department that you’ll work with in buying a REO property from them.  Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.  Before making your offer, you’ll want to contact either the listing agent or REO department at the bank and find out as much as you can about what they know about the condition of the property and what their process is for receiving offers.  Since banks almost always sell REO properties “as is”, you’ll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it.  As with making any offer on real estate, you’ll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.  After you’ve made your offer, you can expect the bank to make a counter offer.  Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.  Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends.  It’s not unusual for the process of offers and counter offers to take days or even weeks.
Looking to Buy? Give me a call 203.667.0897 icon smile Buying Foreclosures | CT Real Estate or email nicole@thepropnet.com


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