Foreclosure Filings Double

Foreclosure filings across the United States nearly doubled last month compared with September 2006, as financially strapped homeowners already behind on mortgage payments defaulted on their loans or came closer to losing their homes to foreclosure, a real estate information company said Thursday.


A total of 223,538 foreclosure filings were reported in September, up from 112,210 in the same month a year ago, according to Irvine-based RealtyTrac Inc.


The number of filings in September was down 8 percent from August’s 243,947, the firm said.

Despite the sequential decline, the September figure represents the second-highest total for filings in a single month since the company began tracking monthly filings two years ago.

"August was an extraordinarily high month for foreclosure activity, so some falloff was almost predictable," said Rick Sharga, RealtyTrac’s vice president for marketing.

The filings include default notices, auction sale notices and bank repossessions. Some properties might have received more than one notice if the owners have multiple mortgages.

Typically, borrowers must be 60 to 90 days past due on their mortgage payments before their lender will consider them in default, the first stage of the foreclosure process. If a homeowner can’t find a way to get current on payments, the home is then often put up for auction, and if it doesn’t sell, it eventually goes back to the bank.

In all, 39 states saw a decline in foreclosure filings, the firm said.

Sharga noted that there was a spike in the number of bank repossessions in August that did not occur in September.

It’s likely that the sequential decline in foreclosure activity between August and September was just a blip, not a bellwether of lessening foreclosure filings.

"We don’t see September as the beginning of the end in this cycle of foreclosures," Sharga said.

The foreclosure rate for the nation in September was one foreclosure filing for every 557 households, the firm said.

The U.S. housing market has seen sales decline and home prices fall or remain flat, making it harder for homeowners who can’t afford to make mortgage payments to sell their homes or seek refinancing.

Many of those troubled homeowners were among those who took on adjustable-rate mortgages that are now adjusting to a higher interest rate, translating into payments they cannot afford to make.

The rising delinquencies and foreclosures this year have led the mortgage industry to tighten lending standards, further narrowing options for homeowners struggling to pay their mortgage.

Nevada, Florida and California had the highest foreclosure rates in the country last month, the firm said.

Rounding out the states with the Top 10 foreclosure rates last month were Michigan, Arizona, Georgia, Ohio, Colorado, Texas and Indiana.

Top Ten Reasons For A Title Search

Top 10 Reasons to Check Your Property Title Search


The real estate "bubble" market of the past 5 years has caused millions of documents to be recorded on property titles. This volume has increased the number of errors, and opened loopholes for document fraud. Because of this, more homeowners are becoming interested in checking their property title records, like they might check a vehicle history or their credit report. We are more often finding some common title errors. When clients check the title search on their property, they are often surprised to find old liens, incorrect ownership, and even mortgages taken out without their knowledge.

1. Unreleased mortgages
Even though the financial account for a prior refinanced mortgage may be paid off, the lender also has to file a lien release with the county records office to remove the old mortgage from your property title. The extreme volume of mortgage refinance activity over the past 5 years has resulted in lenders becoming less careful in filing these documents.

2. Incorrect liens
Liens can become recorded on a property due to county clerk error, or misfiling of property tax payments.

3. Property vesting - family events
A title search will show the current ownership structure, if it is owned individually, jointly, as tenants-in-common, tenants by entireties, or even as a corporation. A death in the family, or divorce are also reasons to verify title search records.

4. Document fraud
Increasingly, criminals are using property records fraud to commit financial crimes, and identity theft, without notice to the property owner.

5. Prior owners records
The gap between the contract and closing dates allows a loophole where liens or mortgages from a prior owner may not be cleared from property records.

6. Assessed value
The counties assessed value may not represent the true taxable value of property in today's changing market, resulting in an inflated tax bill.

7. Deed copy
A title search will provide a stamped recorded copy of the property deed, which can be valuable as proof of ownership, or residency.

8. Other party mortgages
By using loopholes in the recording system, third parties can take out a mortgage against one property and have it recorded against another property, resulting in a lien on the title.

9. Pre-purchase research
The title search shows the original purchase price and date of the current owner, listing mortgages and liens. The buyer knows the sellers current financial situation before making an offer.

10. After sale verification
After purchasing a property, the title search is checked, to verify that the correct names are on the title, and that all records are recorded properly.

Best Places For Real Estate Deals

Best Places For Real Estate Deals
By Matt Woolsey, Forbes.com
October 8, 2007

Home sales have sunk to their lowest levels since 2001. Investors are jumping ship, foreclosures are mounting and lenders are exercising caution.

Still, there are areas of the country where it makes sense for some to buy. That's because, in a market slump, sellers eager to unload their homes often accept less money from buyers. New construction also slows. Both bode well for buyers hoping to score a deal--if the market in which they are buying is expected to experience increased sales.

To find such places, we paired with Moody's Economy.com to research current home sales patterns and sales projections in the country's 40 biggest real estate markets. Based on models that estimated housing inventory, sales rates and turnover for 2008, we arrived at a list of markets that are experiencing price stalls or declines, but where over the coming year are expected to provide deals for buyers.

In Pictures: Best Places For Real Estate Deals



A buyers' market in the purest sense is one where there are far more sellers than buyers, creating a supply and demand dynamic that benefit those looking to invest in a home. However, by that definition, a floundering market like Detroit is a good buyers' market because prices are dropping and inventory is high.

"A market with declining prices and few sales is a strong buyers' market," says Anthony Sanders, professor of real estate finance at Arizona State University. "But it is also a risky market given that prices could decline further."

With that in mind, we required the slumping or neutral markets on our list to have expected volume and turnover increases, based on sales and inventory models run by Moody's Economy.com.

The results turn out three types of markets and three types of deals.


Attractive Arrangements

The first are undervalued, affordable markets like Fort Worth, Texas, which haven't felt huge post-boom price corrections, but where there is an expected acceleration in sales volume, making now the time to buy.

Second are markets like Long Island, N.Y., and Washington, D.C. These are traditionally strong markets that are recovering from speculation, especially in the D.C. condo market and by Long Island's second-home buyers. Once these areas stabilize, the market as a whole should return to health.

"Long Island is continuing to slip, but a modest amount," says Jonathan Miller, president of Miller Samuel, a New York-based real estate appraisal and consultancy firm. "In [Long Island] the upper-end market was the market of choice for speculation and tear downs."

But economists caution that while over the next year the dust may settle in these 10 spots, buyers should be prepared for future swings. This is especially true in the case of riskier markets like Orlando and Las Vegas, where the expected increase in sales volume and housing turnover doesn't necessarily mean that the price trough is imminent.

"Housing market activity revives when house prices decline sufficiently to restore housing affordability and entice buyers to step up and make a purchase," says Mark Zandi, chief economist at Moody's Economy.com. "Some markets are already approaching those price points, in many others prices will have to decline much more to get to that point."

Short Sale Negotiation Basics

Short Sale Negotiation

Negotiation through the loss mitigation department will be the key factor in getting your new home at a deep discount.

If opportunities emerge in which lenders can sell distressed properties without registering big losses, they will do it.

For example, consider that a homeowner with a $200,000 mortgage is late on his or her loan payments and is facing foreclosure. With the consent of the homeowner, you offer his or her lender $150,000 as full payment for the loan, which is accepted. That means you instantly save $50,000 on a real estate investment.

This is a short sale.


Getting started

Negotiating a short sale with a lender can be a complicated. But with careful research and patience, it is possible for you to earn big profits with short sale deals. Naturally, closing the first one will be the most challenging.

The first step in this process is to identify potential investment opportunities on Foreclosure.com, which offers more than 1.2 million listings across the nation.

Preforeclosure properties are ideal because you can make more money with them versus homes that are already bank-owned.

To be most successful, we recommend reaching out to homeowners who are more than three payments behind on their mortgages. At this point, each of these homeowners has received a Notice of Default (NOD) and is very close to losing their home. Time is running out and the chances of them curing the loans and making up the back payments are slim.

The homeowners understand this and may be grateful for your assistance. The lenders understand this, too, and are motivated to recoup their losses as soon as possible.



Calling lenders

It’s important to gather as much information as possible about the properties and the homeowners prior to getting on the telephone with lenders. Because when you do get a lender representative on the line, he or she will have questions.

Using the contact information contained within the listings you have targeted from Foreclosure.com, it’s time to call a lender and inquire about the possibility of a short sale agreement. Traditionally, the “Loss Mitigation Department” will handle these types of requests.

If you can’t get in touch with anyone, move onto the next listing. The negotiating can begin only when you get in touch with the right person.

Once you have reached a representative for the lender, inform him or her that you represent the homeowner. This is all you need to say — avoid revealing that you are an investor. The representative will usually want basic information about the property, the homeowner and the proposed deal. He or she will also want to know the value of the property and the financial situation of the homeowner (borrower).

Aside from making the initial introduction, the goal of this conversation should be to request a short sales or workout packet. This packet will provide you with everything you need — instructions, forms and procedures — to close a successful short sales deal.


Broker’s Price Opinion (BPO)

Lenders generally hire local real estate brokers or appraisers to evaluate properties in the foreclosure process prior to selling them at public auction. These are referred to as a Broker’s Price Opinion (BPO).

Essentially, a Realtor® — based on the condition of the home and current market conditions — provides the lender with an estimate for the value of the property. The BPO is the key piece of information that a lender will rely on to make a decision regarding a short sale.

The lower the estimate, the better it is for you.

Lenders want to get rid of distressed properties as soon as possible, but they aren’t going to sell them for ridiculously low prices Many short sales, in fact, fall through if the BPOs come in too high. When properties are in good condition, it is hard to convince lenders that they are worth much less than the appraised values.


Hardship letter

Most lenders will request a hardship letter that details the reasons a homeowner has not made his or her mortgage payments. This is a bit strange because the borrower who is in default must prove that he or she is broke and unable to afford the payments.

This is a fairly extensive request, which may require the homeowner to submit pay stubs, tax records and other personal financial records, along with the letter. It is essential that you submit everything that is requested.

Otherwise, your offer will not be accepted.

Creating an effective and compelling hardship letter requires creativity. Without lying, the letter should paint a very bleak picture of the situation. If neither you nor the homeowner possesses decent writing skills, it may be in your collective best interests to seek the assistance of a professional — it’s worth it.


HUD-1 settlement statement

A lender will generally require a written contract between you and the homeowner. A preliminary HUD-1 settlement statement will reassure the lender that the homeowner isn’t receiving any cash from the deal.

The HUD-1 form requires you to itemize all charges imposed upon you and the homeowner for the real estate transaction. Essentially, it is a complete list of the incoming and outgoing funds.

The contract should be written so that you pay all costs associated with the deal. And, that the “net cash” to the homeowner is the precise amount of the short pay to the lender.

If you have difficulty completing the form, a title or escrow company may help you prepare it in advance of the closing.


Supporting materials
A lender will often agree to a bigger discount if a property requires significant repairs. The more work that needs to be put into the property, the less it is worth and the harder it is to sell on the open market.

Hire a professional(s) to appraise the home and provide you with a bid for repair estimate (the higher the better). This is not a requirement because as mentioned above, the lender will get its own BPO. However, providing independent appraisals and comparable sales information that support your offer are critical.

There are other things you can also do if the home is not in ready-to-move-in condition.

Always remember, it is in your best interests to submit with your paperwork as much negative information about the property as possible. For example, newspaper clippings that discuss “bad news” nearby or in the neighborhood can help reduce the price of the property in negotiations.


Waiting for an answer

It usually takes about three to six weeks to receive an answer from the lender once you have submitted the HUD-1 settlement statement and all of the other supporting materials.

It’s always good to call the lender to ensure that he or she has received the information, as well as make it clear that you are always available to answer questions and provide additional information, especially if something is missing.

If the auction date for the property is approaching, ask the lender to extend it until he or she has had time to consider your offer. If your offer is legitimate, the lender will almost always grant your request.

10 tips to add value to your property

10 Inexpensive Ways to Add Value to Your Rental or Rehab Property
It's easy to fix up your properties if you have unlimited cash. However, you need to keep your repairs to a minimum to stay profitable. You also need to keep your properties in good shape to attract tenants or buyers. There are the basic improvements, such as carpet and paint, but these can still costs thousands of dollars. The following are some inexpensive ways to improve your properties with very little cash.

#1) New Electrical Switch Plates

This is such a minor, yet overlooked improvement. Most rental owners and rehabbers paint a unit and leave the old, ugly switch plates. Even worse, some even paint over them.

New switch plates cost about 50 cents each. You can replace the entire house with new switch plates for about $20. For the foyer, living room and other obvious areas, spring for nice brass plates. They run about $5 each - not much for added class.

#2) New or Improved Doors

Another overlooked, yet cheap replacement item is doors. If you have ugly brown doors, replace them with nice white doors (you can paint them, but unless you have a spray gun it will take you three coats by hand).

The basic hollow-core door is about $20. It comes pre-primed and pre-hung. For about $10 more, you can buy stylish six-panel doors. If you are doing a rehab, the extra $10 per door is well worth-it. For rentals, consider at least changing the downstairs doors.

#3) New Door Handles

In addition to changing doors, consider changing the handles. An old door handle (especially with crusted paint on it) looks drab. For about $10, you can replace them with new brass finished handles. Replace the guest bathroom and bedroom door handles with the fancy "S" handles (about $20 each).

#4) Paint/Replace Trim

If the entire interior of the house does not need a paint job, consider painting the trim. New, modern custom homes typically come with beige or off-white walls and bright-white trim. Use a semi-gloss bright white on all the trim in your houses.

If the floor trim is worn, cracked or just plain ugly, replace it! Home Depot carries a new foam trim that is pre-painted in several finishes and costs less than 50 cents per linear foot. Create a great first impression by adding crown molding in the entry way and living room.

#5) New Front Door

You only get one chance to make a first impression. A cheap front door makes a house look cheap. An old front door makes a house look old. If you have nice heavy door, paint it a bold color using a high-gloss paint. If your front door is old, consider replacing it with a new, stylish door. For about $125, you can buy a very nice door.

#6) Tile Foyer Entry

After the front door, your next first impression is the foyer area. Most rental property foyers are graced with linoleum floors. Consider a nice 12" Mexican tile. An 8' x 8' area should cost about $100 in materials.

#7) New Shower Curtains

It amazes me that many landlords and sellers show properties with either no shower curtain or any ugly old shower curtain in the bathroom. Don't be cheap - drop $40 and buy a nice new rod and fancy curtain.

#8) Paint Kitchen Cabinets

Replacing kitchen cabinets is expensive, but painting them is cheap. If you have old 1970's style wooden cabinets in a lovely dark brown shade, paint them. Use a semi-gloss white and finish them with colorful plastic knobs. No need to paint the inside of them (unless you own a spray gun), since you are only trying to make an impression.

Americans spend 99% of their time in the kitchen (when they are not watching TV). A fancy modern faucet looks great in the kitchen. They can run as much as $150, but not to worry - most retailers (Home Depot, Home Base, etc) often run clearance sales on overstocked and discontinued models. I have found nice Delta and Price Pfister faucets for about $60 on sale.

#9) Add Window Shutters

If you have ugly aluminum framed windows, consider adding wooden shutters outside. They come pre-primed at most hardware retailers and are easy to install. Paint them an offset color from the outside of the house - (e.g., if the house is dark, paint the shutters white. If the house is light, paint them green, blue, etc.).

#10) Add a Nice Mailbox

Everyone on the block has the same black mailbox. Stand out. Be bold. For about $35 you can buy a nice colorful mailbox. For about $60 more, you can buy a nice wooden post for it. People notice these things....and they like them!

Connecticut Foreclosures - The Real Deal

Connecticut's legal procedure concerning foreclosures offers two options: foreclosure by sale, or strict foreclosure. The appropriate option is determined by the amount of home equity owner has accumulated in the property.

In those cases in which the home owner has accumulated little or no equity, the strict foreclosure rule applies. The bank or lender is entitled to the full amount of proceeds from the property. If the homeowner has accumulated some equity, however, the foreclosure by sale method applies. The judge assigned to each foreclosure case will determine which option is the correct one.

The First Step: The Complaint to Foreclose The Connecticut foreclosures laws require that, when a foreclosure is in order, a set of procedural steps be followed. The first step is the Complaint to Foreclose, in which the bank determines the correct names of all those who hold liens against the property in question. Those parties will be included in the Complaint as defendants.

The Connecticut foreclosures statute requires that the Complaint to Foreclose be filed in the Superior Court of the County in which the property is located, indicating that the mortgage is in default and that the bank is within its rights to ask for repossession of the property, or strict foreclosure.

If the bank suffers a loss from selling a Connecticut foreclosure at auction for an amount less than what it was still owed, the bank is required to send a notification of breach and to follow the mortgage and promissory note provisions.

If you intend to file a Connecticut foreclosure, both the summons and Complaint must be served on all defendants within twelve days. If this is done, and the defendant fails to appear at the Court hearing, the court may award the plaintiff a default judgment; default judgments are also possible if the defendant neither makes no plea nor offers a defense.

A Matter For The Court

Connecticut foreclosures are initiated as soon as a lender files the necessary legal documents against the property owner. From that point the Court makes all the decisions regarding the amount of debt, the property's actual value, and the costs involved in the foreclosure proceeding. And most importantly, the Court determines whether there will be a foreclosure by sale or a strict foreclosure.

In cases of strict foreclosure, the borrowers are given a specific day by which they must either pay off the amount owed or lose their interest in the property. All the other defendants to the foreclosure actins are given similar deadlines, and if nor payment is made, the title to the property vests in the foreclosing lender, usually after one hundred and fifty days. But the time between the judgment of strict foreclosures and the vesting date dictated by Connecticut foreclosure law is discretionary, and if the Court determines that the debtor under financial hardship, it may extend the time for repayment.

If the Connecticut foreclosure is to be a foreclosure by sale, the court will set a sale date which is usually sixty to ninety days in the future. The Court will also, within fourteen days of the actual sale, decide whether or not the terms of the sale are acceptable.

7 ways to flipping properties

"Flipping" is the buzzword of the year in real estate: Flipping books, flipping articles in the newspaper, and even flipping shows on TV! What is flipping, how does it work, and how you can profit?

Flipping Real Estate simply means buying a property and reselling it quickly, as opposed to holding on to a property long term as a rental. Flipping comes in several varieties, most of which are legal and profitable, some of which are not.

Flip Strategy #1: Buy, fix, and flip

Let's start with the most common form--the good, old "fix ?n flip." This involves buying a property that needs work, fixing it up, then selling on the "retail" market, that is, to a person who will live in the house.

This method is tried and true and works very well. You can easily make $15,000 to $50,000 on one deal, depending on your market and how good you are at finding bargains.

The danger in fix and flips is either paying too much or underestimating repairs. Be very conservative in your fix-up costs and length of time it may take to resell. Also, make sure you consider the cost of paying a real estate agent to sell the property.

Flip Strategy #2: Buy, refinance, and lease option

Rather than sell the fixed up property for all cash, sell for terms. Once you have completed the rehab, refinance the property at its new appraised value. If you did the math correctly, you should have little or no money in the deal. Sell the property on a lease with option to buy.

The rent payment from your tenant/buyer should cover your mortgage payment. (If not, consider an interest-only or adjustable rate loan that is fixed for three years.)

When your tenant exercises his option, you reap a larger profit, since you don't have to pay a broker's fee. If the tenant exercises his option after twelve months, you benefit from a lower capital gains tax rate.

Flip Strategy #3: Buy and flip "as is"

Don't like to do fix-up work? Consider selling the property "as is" as a light fixer upper. If the local real estate market is hot, you should be able to sell the property in poor condition just a little below market.

This is especially the case with houses in "transitioning" neighborhoods. Make sure, of course, that you acquire the property cheap enough that you can sell it below market quickly and still profit.

Flip Strategy #4: Wholesale

Strategy #1, the fix and flip, is very popular, which means there are a lot of investors looking for rehabs. You can buy the property cheap and sell it for just a few thousand dollars more to another investor without doing any work. You won't make nearly as much as the rehabber, but you will realize your profit quickly.

Flip Strategy #5: Pre-construction In very hot real estate markets, prices are appreciating as much as 2% per month. If you time things right, you can put a contract on a pre-construction house or condominium, then flip it to someone else when the development is complete.

If it takes 12 months for the development to be complete, and the condo price is $500,000, you could make $100,000 or more in one year! Of course, the opposite is also true. You could end up losing money if the local economy tanks and you end up with a worthless condo that you can't sell for more than you paid. Use this approach very carefully?

Flip Strategy #6: Scouting

The Scout is an information gatherer, so not technically a property flipper. He is the "bird dog" who finds potential deals and sells the information to other investors. Many people get started as a Scout for other investors because it does not take any cash or prior knowledge to look for distressed properties.

The Scout finds a property for sale, gathers the necessary information, and then provides this information to investors for a fee. The fee will vary depending on the price of the property and the profit potential. The Scout can expect to make $500 to $1,000 each time he provides information that leads to a purchase by another investor.

Flip Strategy #7: Illegal flipping

Okay, I am NOT advocating this approach because it is illegal. Illegal property-flipping schemes work as follows: Unscrupulous investors buy cheap, run-down properties in mostly low-income neighborhoods. They do shoddy renovations to the properties and sell them to unsophisticated buyers at inflated prices.

In most cases, the investor, appraiser, and mortgage broker conspire by submitting fraudulent loan documents and a bogus appraisal. The end result is a buyer that paid too much for a house and cannot afford the loan.

Since many of these loans are federally insured, the government authorities have investigated this practice and arrested many of the parties involved. As a result, the public perceives is flipping to be illegal.

The fact is, "flipping" (as I described in the beginning of this article) is NOT illegal. Loan fraud in the process of flipping is what is illegal. So don't confuse the two. The other six ways to flip are very legal, very ethical, and very profitable!

Where to find foreclosures?

There are a plethora of places to look when you want to find foreclosure properties. The key is finding them before someone else does. You can find foreclosure properties on the web, newspapers, lis pendens lists, seminars, direct mail, word of mouth, friends, real estate agents, real estate offices, and lending institutions just to name a few.

The internet is a good place to search for foreclosure properties. Several foreclosure listing companies actually search out notifications of default and sell a subscription to those who are willing to pay for this information. Just remember, this is the easiest way to find properties, so beware of competition. Also beware that some of these subscriptions are just a way to make money and provide little or outdated information on these foreclosure properties. If you decide to test one out, make sure they give you a free trial period so you can see how current the listings are.

Newspapers are another great way to find foreclosure properties. All states are required by law to post a public notice of auction in a newspaper for all foreclosure properties. You can look up these notices and send a letter to them, call them or stop by. Another option, you have as a creative investor, might be to place an ad in the newspaper yourself to attract those who are in foreclosure. Believe me, if you have a good ad, your phone will begin ringing off the hook. You see, sooner or later the homeowner finally realizes they cannot save their home. Then when time runs out, they have no choice but to call, and during this time they are very motivated.

Direct Mail is one of the best ways to find the "GOOD" foreclosure properties. This is because you can talk to a person who is still in the pre-foreclosure stage and negotiate a nice discount on the property. There will be fewer investors that even know about the property, however, there is more work involved these kind of foreclosure properties.

Real Estate Agents are a good way to find foreclosure properties. Normally, banks that end up with foreclosure properties will hire an agent to represent them. Banks are not in the foreclosure business, they are in the lending business, so they too are very motivated to sell. Agents have connections and can get a list of some "bank-owned" properties.

Word of mouth is a technique that all the good investors use. Let it be known to everyone you come in contact with that you are a real estate investor who specializes in foreclosure properties. You should make some business cards as well that say "I specialize in foreclosure properties" and hand them out to everyone you know. You will be amazed what this will do for you. You may get a call from your friend's, friend's, sister's, friend who needs help avoiding the public auction.

There are so many excellent ways to find foreclosure properties. In fact there are many more than what are listed here. The idea is that it's a numbers game. You've always got to be working to find more deals. Find out which methods of finding works for you and go with it.

Flippings profits from the computer

You know the value of your computer and how it saves you time and effort.
What if there was a product that taught you how to flip real estate using
your computer? For the first time ever there is a product that will teach you
how to find real estate deals, get money for your deals, fix your deals and
sell them for BIG PROFITS using your computer and the internet.

Never before has real estate been so easy to flip as now! Even if you don’t know
anything about real estate, this product can change your future!

Armando Montelongo of the hit reality show on A&E Flip This House
Invites you to launch his hit product Flip It Now! I would love to extend
you an exclusive invitation to become one of my Joint Venture Partners.

Learn from Armando Montelongo how to flip houses and gain maximum profits. Unlike others, Armando Montelongo has a national tv show, not paid advertisement, to show you he is the real deal.

A & E meets internet marketing

How would you like to partner with the most influential partner
in the world… TELEVISION!!! The Offline World of Real Estate and
Reality Television is here to make you BIG MONEY ONLINE!

Armando Montelongo of the hit reality show on A&E Flip This House
Invites you to launch his hit product Flip It Now!
Flip It Now is already growing MASSIVE INTEREST!

“Never Before has there be an online Ground Floor Opportunity like this.
Earn HUGE Commission Checks Promoting an Incredible Product that your
customers cannot refuse - backed by the celebrity of Reality Television!

http://thenoteservice.armandomontelongo.com

Finding Hard Money Lenders

Finding hard money lenders isn't really a mystery. At least it isn't a hard mystery to solve. You just need to get out there and take the right steps toward uncovering them.

There are many different ways their investors, attorneys, accountants, insurance agents, etc., who are generally to locate hard money lenders or private lenders. When talking with other professionals, I tend to refer to my lenders as "private lenders" simply because not everyone is familiar with the term "hard money lender."

I have found most of my lenders by asking for referrals from o willing to help me because I do what I can to help them. Some of my favorite people to ask are settlement/closing attorneys. They usually prepare the loan documents for hard money lenders and most attorneys will be able to give you at least one name. In fact, on a number of occasions the attorney whom I asked for a referral was a hard money lender themselves.

Accountants are also a good source for hard money lenders since they have clients who are sitting on a lot of cash and need to do something with it. In some cases, they even have clients who already hold paper. Such people are great to approach about lending money since they already understand the business of lending. They have either taken back paper upon selling a property or they have lent their own funds to someone.

Real estate paper is a very secure investment, and people who understand the business of lending don't mind doing real estate loans, especially when the LTV is low and the interest rate is high. If someone trusts their accountant enough to let them handle their finances, then a referral from an accountant should carry a lot of clout.

Another method of finding hard money lenders is to write down the addresses of homes undergoing renovation. With few exceptions, if I go to the courthouse with ten addresses to uncover the lender involved in each of these renovation projects, you will find that a private lender is funding at least one of them. Contact the lenders that you discover and get to know them, especially if they have already lent money on a home in an area where you want to invest.

Insurance agents who sell hazard insurance policies (particularly those that specialize with investment properties) have to put a "loss payee" on all of the policies where a lender is involved. The loss payee is the lender, so the insurance agent can tell who are private lenders and which ones are not. An active agent could probably go through their records and come up with dozens of names of people who have lent money privately on policies they have written.

Mortgage brokers can also be a good source for locating hard money lenders, particularly those that work with investors on a routine basis. I personally feel that any mortgage broker that deals with investors should have a hard money lender in their bag. If they don't, I wouldn't consider them a good mortgage broker. You may have to pay the mortgage broker a fee for the referral, but it is worth it if it means getting a deal done.

Increasing your chances of finding a hard money lender has to do with the circles that you run in, the people whom you ask, and the number of people you ask. Chances are if you are asking the cashier at your local convenience store if they know of any hard money lenders, the answer you get is going to be, "Huh?".

If you ask an attorney or title company who works with a number of investors in your area, it is much more likely that you will find someone who will be able to provide you with the names of several lenders. If you don't get anywhere the first time, don't stop asking people until you find one.

Webinars - Flipping Foreclosures on the Internet

Webinars - Flipping Foreclosures on the Internet with Mike Collins
Tuesday, September 25 @ 9 p.m. ET/6 p.m.

Build a booming online real estate business with thousands of foreclosure and rehab deals! Find out how to flip foreclosures on the Internet for serious profits with Mike Collins — Mike will reveal how to become the "middle man" in hundreds of real estate deals. That means you never actually own properties, but receive big commissions when you find the right investors for them! Find amazing foreclosure deals on the Internet — up to 50% off! Create a money-making real estate business that achieves HUGE profits Build a cost-effective and cutting-edge lead generation machine Generate amazing leads with search engines such Google, Yahoo! and MSN Typically, wholesaling properties means that you never actually own them. The wholesaler may be the "middle-man" between the homeowners and the investors. Put simply, the wholesaler finds good deals on properties and then finds investors to buy the properties from the homeowners and receives a fee or percentage for securing the deals. Rehabbing properties means buying homes that are in need of repairs at discounted prices. Repaired or "rehabbed" properties are either sold for a significant profit or used as a rental property. And Mike will tell you about the benefits of both during this exciting real estate training session.
Tuesday, September 25 @ 9 p.m. ET/6 p.m. PT Mike Collins has more than 20 years in the real estate investing business. He has found hundreds of single-family homes and flipped them for serious profits, resulting in the best-selling program, "Wholesaling Houses for a Living." Read more More recently, Mike has turned his attention to the Internet. Over the last four years, in fact, he has created lead systems that have resulted in the purchase of countless homes for his own personal benefit. His new passion for Internet lead generation resulted in the founding of RehabList.com, RehabHardMoney.com and YouSell.com. This combination has resulted in the generation of hundreds of thousands of leads for wholesalers, rehabbers and hard money lenders.
How to register Registration is simple. Reserve a space now before it is filled — seats are limited! Click the banner then go to webinars to register

Learn how to Flip and Rehab

Learn how to Flip and Rehab from Armando Montelongo from the hit A&E show , Flip This House.

Internet millionaire Armando Montelongo of armandomontelongo.comlaunched a new site called Armando Montelongo.com.

This site is catered to one market,entrepreneurial people and business opportunity seekers.
"The site is there for all types of people who want tomeet with other who have some of the same business interests. It caters to any type of opportunity, investment clubs, franchises, Network opportunities, Day traders, you name it and the site caters to it.

With so many filters on the internet, even legitimate subscriberemail is getting blocked, which unfortunately rendering newsletters somewhat ineffective leaving opportunity seekersno valid or cost effective way to find or communicate with each other.

ArmandoMontelongo.com is very different in that it allows people to communicate in real time audio and video conferencingin a secure environment.

People can join free knowing that others on the site will enjoyhearing about their opportunities.
You can visit the site at http://thenoteservice.armandomontelongo.com

Free Connecticut Foreclosure Auctions

Free Connecticut Foreclosure Auctions is serving New Haven County with listings of upcoming home and land foreclosure auctions.

• BUYING FORECLOSURES
• HOW TO PURCHASE AT A FORECLOSURE SALE
• FIND PROPERTIES THAT WILL BE SOLD AT AUCTION:

In all foreclosure auctions, a notice must be published locally. Although your county clerk's office is a great real estate resource in identifying foreclosures, it can be very time consuming and not worth the headaches when this information is readily available here. Foreclosure Times.com offers the largest real estate database of foreclosure homes in the country, including Bank REO, Pre-Foreclosure, Government Foreclosures including the Federal Deposit Insurance Corporation (FDIC), HUD, Government Services Agency (GSA), and even the Internal Revenue Service plus bankruptcy and by owner properties.

BIDDING AT AN AUCTION:

If you think you want to purchase a foreclosure property, you must check the title, get a true value for the property if it is sold on the open market, and allow for sales costs, fix up cost etc., when deciding to bid.

If you win at auction, you do not become the owner of the property. You get a "Certificate of Purchase." This certificate entitles you to receive interest money, at the rate of the first mortgage. However, a Certificate of Purchase is subject to redemption by the owner or by junior creditors.

AFTER THE FORECLOSURE SALE

Once a Certificate of Purchase has been issued, you must then present cash or certified funds in the exact amount of your property bid. The Public Trustee will then obtain a redemption amount. If an owner wants to keep their property, they must pay the redemption amount in cash or certified funds to the Public Trustee. The present owner still owns the property until their redemption period ends. That period is normally 75 days (or six months for agricultural property), during which time they can pay off the Certificate of Purchase amount, plus interest and fees. In this case, no Public Trustee's Deed is issued.

During the owner's redemption period, any junior lienors, or creditors, with a recorded interest in the property can also file their "Notice of Intent to Redeem." The junior lienors who file these Intents have specific time periods (after the end of the owner's redemption period) in which they're allowed to redeem if the owner does not.

If no one redeems and all the redemption periods expire, the Certificate of Purchase holder (potentially you) can be issued a confirming Public Trustee's Deed. In this case, the title vests free and clear of all liens and encumbrances junior to the foreclosed lien except omitted parties, or parties that were not notified of the foreclosure but who have an interest in the property.
And the property belongs to you!

Free Lis Pendens Listings West Haven

We are offering free lis pendens listings for West Haven, CT.
Come check us out at http://www.thenoteservice.com

60 Swampscott
$185,010 Assessed Value
8/15/07 Date of Lis Pendens

33 4th Ave.
$144,830 Assessed Value
8/7/07 Date of Lis Pendens

23 Warner Ave.
$137,270 Assessed Value
8/13/07 Date of Lis Pendens

Sub Prime Lending

Subprime Lending

Typically, subprime loans are for persons with blemished or limited credit histories. The loans carry a higher rate of interest than prime loans to compensate for increased credit risk.
Many have questioned why minorities appear to be over-represented in the subprime lending market. Studies reveal that even in upper-income African-American neighborhoods one is one-and-a-half times as likely to have a subprime loan than persons in low-income white neighborhoods. In neighborhoods where Hispanics comprise at least 80 percent of the population, they were 1.5 times as likely than the nation as a whole to have a subprime mortgage loan.

Some allege this disparity to be attributed to subprime lenders purposefully marketing to African-American communities-what some have called reverse redlining. They allege lenders will provide loans to these communities, but at a higher cost and with less favorable conditions.

Some facts about subprime lenders:

• Home refinance loans account for higher shares of subprime lenders' total origination than prime lenders' originations
• Subprime lenders originate a larger percentage of their total originations in predominately black census tracts than prime lenders
• Subprime lenders are more likely to have terms like "consumer," "finance," and "acceptance" in their lender names

Proponents of subprime lending

Individuals who have experienced severe financial troubles are often labelled as higher risk and therefore cannot obtain conventional financing. These individuals may have had job loss, previous debt or marital problems, or unexpected medical issues. Often, these events were unforeseen and cause a major setback in finances. As a result, late payments, charge-offs, repossessions and even foreclosures may result.

Due to these previous credit problems, these individuals may be precluded from obtaining any type of loan for an automobile. To meet this demand, lenders have seen that a tiered pricing arrangement, one which allows these individuals to pay a higher interest rate, may allow loans which otherwise may not occur.

From a servicing standpoint, these loans have higher collection defaults and experience higher repossessions and charge offs. Lenders use the higher interest rate to offset these anticipated higher costs.

Provided a consumer will enter into this arrangement with the understanding that they are higher risk, and must make diligent efforts to pay, these loans do indeed serve those who would otherwise be underserved. The consumer must purchase an automobile which is well within their means, and carries a payment well within their budget.

Criticisms of subprime lending

Capital markets operate on the basic premise of risk versus reward. Investors taking a risk on stocks expect a higher rate of return than do investors in risk-free Treasury Bills, which are backed by the full faith and credit of the United States. The same goes for loans. Less creditworthy subprime borrowers represent a riskier investment, so lenders will charge them a higher interest rate than they would charge a prime borrower for the same loan.
To avoid the initial hit of higher mortgage payments, most subprime borrowers take out Adjustable-rate mortgages that give them a very low initial interest rate of around 4%. But with annual adjustments of 2% or more per year, these loans typically end up charging around 10%. So a $500,000 loan at a 4% interest rate for 30 years equates to a payment of about $2,400 a month. But the same loan at 10% for 27 years (after the adjustable period ends) equates to a payment of $4,470. A 6-percentage-point increase in the rate caused slightly more than an 85% increase in the payment.

Alternatives To Foreclosure

Alternatives To Foreclosure

Mortgage foreclosure is a tragic and traumatic event for any homeowner. It is the legal process whereby property rights to one's home are stripped away due to inability to maintain the obligations of a mortgage loan. The actual process varies by State of residence, and can take anywhere from 6 weeks to 18 months, depending on the jurisdiction.
In almost every State, foreclosure involves the auction of a property by a representative of the county court or the lender in order to satisfy the debt on the house. The investor usually gives instructions to the loan servicer to bid at or near the value of the debt. The servicer usually wins the bid because foreclosure generally occurs only when the debt is greater than the value of the property. The servicer or investor must then manage the house, provide repairs, and sell it through normal real estate channels, hoping to lower the final loss from what would otherwise have been realized if a third-party bidder had purchased the property at the foreclosure auction.

Foreclosure is then not only a costly experience for the family losing a home, but can be a lengthy and expensive procedure for the loan investor, the servicer, and any insuring agency that is also involved. Contrary to popularly held beliefs, these mortgage market participants lose money on nearly all foreclosures. Fortunately, these firms have discovered they can benefit themselves and homeowners if foreclosure can be avoided. A forthcoming HUD report to Congress examines various strategies now used to protect borrowers while mitigating the loss experienced by the lenders.

Lessons from the private sector
By 1985 the mortgage industry was feeling the effects of several overlapping events: high interest rates from the Federal Reserve Board's October 1979 decision to allow interest rates to freely rise; foreclosures coming out of the national recession in 1981 and 1982 and the ensuing farm- and industrial-belt depression; a new economic environment in which rapid inflation could no longer be counted on to support troubled homeowners with low-downpayment mortgages; and a bevy of new and untested mortgage products developed to help portfolio lenders cope with volatile interest rates, but whose default risks appeared to be higher than those of traditional level-payment mortgages. All of these circumstances led to higher loan defaults. With the collapse of the oil-patch economy in 1986 came more defaults and foreclosures and even the insolvency of several private mortgage insurers. Then the stock market crash of 1987 and the retrenchment of the financial industry led to an escalation of foreclosures in the Northeast. These events sparked the beginning of large-scale efforts by national institutions to understand and mitigate the problem of single-family home foreclosures. By 1991, as the foreclosure rates of the oil-patch and Northeastern States were passing their peaks, mortgage finance institutions were establishing serious and wide-sweeping loss-mitigation policies with loan servicers. These basic approaches continue to undergo fine-tuning, but the changes that took place in the early 1990s truly ushered in a new era in how the mortgage industry treats financially troubled homeowners.
Industry sources suggest that 70 to 80 percent of all loans at 90-day delinquency can still be reinstated without assistance. Borrowers must be encouraged to proceed in that direction; the greatest danger is that borrowers will give up hope or panic and either walk away from their properties or use the legal system to forestall what they believe to be inevitable foreclosures. When a borrower's delinquency extends past day 90, the servicer must change from delinquency management to loss mitigation. After 3 months of loan delinquency, the organization bearing the credit risk faces a potential for some type of loss, and foreclosure with the associated property management and final sale, is the most costly option. Loss mitigation means finding some resolution short of foreclosure. These resolutions are typically called loan workouts. The least costly workout options are those that keep borrowers in their homes, and the next best are those that assist borrowers in getting out of the now burdensome financial responsibilities of homeownership in a more dignified and less costly manner than foreclosure.
The option used for homeowners with truly temporary, one-time difficulties is the advance claim. In this case the insurer pays the servicer the amount of the delinquency in return for a promissory note from the borrower. The mortgage loan is then made whole, and the insurer can collect part or all of the advance from the borrower over time.
The next option for keeping borrowers with temporary problems in their homes is a forbearance plan. This option is used for borrowers who have temporary reductions in income but have long-term prospects for increases in income that could again sustain the mortgage obligations. It is also used when troubled borrowers are working to sell properties on their own. The forbearance period can extend from 6 to 18 months or longer, depending on the borrower's circumstances. During this time borrowers may be initially permitted to make reduced monthly payments, working to eliminate the delinquency through increased payments during the latter part of the forbearance period. Because insurers, Fannie Mae, and Freddie Mac typically consider forbearance plans a servicer matter, they are rare in practice, leading some homeowners to lose their homes unnecessarily.
For permanent reductions in income, the only way to assist troubled borrowers to keep their homes is through loan modification. Loan documents can be modified in any way, but the two most common are interest-rate reductions and term extensions. Loans with above-market interest rates can be refinanced to the market rate and borrowers charged whatever portion of the standard origination fee they can afford. If the interest rate is already at or below the current rate, then monthly payments can be permanently reduced by extending the term of the mortgage, even starting a new 30-year amortization schedule.
Such modifications can be done quickly and inexpensively for loans held in portfolio, and in recent years they have become easier to implement for those loans in mortgage-backed security (MBS) pools. Fannie Mae and the U.S. Department of Veterans Affairs readily agree to allow servicers to buy qualifying loans out of MBS pools, modify them, and then sell them back to the agency to hold in a retained portfolio. Freddie Mac, which has a security structure different from that of Fannie Mae, performs the purchase itself after the servicer completes negotiations with the borrower.
In many cases borrowers are better off getting out of their existing homes. There may be a need to find employment elsewhere, a divorce settlement that requires selling the property, reductions in income that necessitate moving to lower cost housing, or a deceased borrower with an estate to be liquidated. Whatever the reason, there are three options currently available for borrowers who must give up their homes. The first is selling the home with a loan assumption. This is valuable if the mortgage carries a below-market interest rate that would make its sale more attractive, and in cases in which the assumption permits the purchaser to obtain a higher loan-to-value ratio than could otherwise be attained. Credit agencies will waive the due-on-sale clause of fixed-rate mortgage contracts as needed to assist troubled borrowers sell their properties and avoid foreclosure.
Borrowers who must move and who have negative equity in their properties may be eligible for preforeclosure sales in which the insurer or secondary market agency (Fannie Mae or Freddie Mac) helps the borrower market the home and covers any loss at the time of settlement. Borrowers can be asked to contribute to the loss according to their financial abilities. This has become the number one loss-mitigation tool of the 1990s. Industry sources indicate that preforeclosure sales prices are generally at least 5 percent higher than those for homes with foreclosure labels on them, and all of the costs and uncertainties associated with foreclosure and property management are eliminated. Borrowers benefit by avoiding the indignity of a foreclosure.
The last option short of foreclosure is for the borrower to voluntarily convey property rights to the lender/servicer. This is an old technique and, as it involves the homeowner signing over the deed to the property, is called a deed in-lieu-of-foreclosure, or simply a deed-in-lieu.
Win-win opportunities
Attempting loan workouts is risky; if they succeed, there are cost savings over foreclosure, but if they fail and foreclosure must be pursued anyway, default resolution has greater costs. That means that the entire decision about whether or not to offer foreclosure alternatives, from the creditor's perspective, comes down to understanding two probabilities: the break-even probability of workout success and the probability of an individual borrower succeeding in a workout. A break-even probability indicates how many workout offers must succeed in order for the total cost of all workouts (successes and failures) to equal the cost of immediate foreclosure on all loans. If the individual's success probability exceeds the break-even level, then it is financially prudent to offer that person a workout. This concept was formalized by Ambrose and Capone.
The Ambrose-Capone study is instructive as it simulates break-even probabilities for four major types of workouts: loan modifications, forbearance, preforeclosure sales, and deeds-in-lieu. It also takes into account uncertainties with respect to the time it takes to foreclose on and sell a property, considers a number of economic environments and initial loan-to-value ratios, and accounts for borrower opportunities to cure defaults. In circumstances in which housing prices are either stable or have experienced some decline,modifications have the lowest break-even probabilities (18 to 25 percent). That means that lenders can take the most chances with these workouts. Each success can cover losses from between four and five failures. In areas where there has been no housing market downturn, pre-foreclosure sales have the lowest break-even probability (20 percent), and modifications have the highest (42 percent). Deeds-in-lieu and forbearance break-even rates are each around 30 percent.
Since there is strong evidence that break-even probabilities tend to be well below 50 percent, borrowers whose chances of success are 50 percent or better certainly should be given workout opportunities. Even borrowers whose probability of success is somewhat less than 50 percent still should be given a workout opportunity. Of course, how low a probability of success the credit-risk bearer can accept depends upon its having enough defaulted loans to take advantage of the law of large numbers. That is, to ensure that offering alternatives to foreclosure will reduce the cost of loan defaults, one must have enough defaults to know that the probabilities on each loan will turn into certainties in the aggregate. Thus, national insurers and agencies are in prime positions to remove this risk from small lenders and servicers. By dealing with larger total numbers of defaulted loans, the national organizations can profitably offer workouts even to households with success probabilities very near the break-even levels.
Successes and failures at FHA
The Federal Housing Administration (FHA) has had a difficult history with respect to loss-mitigation and foreclosure-avoidance measures. Its original neglect of the issue was not unlike other mortgage insurers and guarantee agencies. At 90-day default, servicers would turn accounts over to foreclosure attorneys for immediate collection or foreclosure. But in 1974 the courts ruled (Brown v. Lynn) that HUD's insured borrowers were a protected class under the National Housing Act and required post-default assistance. In response, FHA developed its Single-Family Mortgage Assignment Program. Under the assignment program, FHA pays full insurance claims to lenders/servicers and becomes both the investor in and servicer of the loans. Borrowers are granted a period of reduced or suspended payments, which create long-term accounts receivable with FHA. The forbearance period can last up to 36 months after which borrowers have up to 10 years beyond mortgage contract maturity to pay off their entire debt.
From the perspective of borrowers, the assignment program has been a mixed success. Only a minority have cured their default, while many more families have postponed foreclosure for long periods of time. Some families simply avoid foreclosure but never fully recover. Based on FHA's experience from 1984 to 1993, a reasonably accurate distribution of outcomes can be constructed. During the first 10 years after families enter the assignment program, approximately 15 percent fully recover; another 25 percent sell their homes, many at prices insufficient to pay off the entire debt; and roughly 50 percent lose their homes through foreclosure.
The remaining 10 percent retain possession after 10 years but are so heavily in debt that it is highly unlikely that they will ever fully reinstate the mortgage. From a narrow financial perspective, the assignment program has been a failure for FHA. Because the program allows many families who eventually will lose their homes to remain in them for long periods without making regular mortgage payments, losses from carrying these mortgages are high. The expected loss on each assigned loan is roughly 48 percent of the outstanding loan balance, while outright foreclosures without assignment incur an average loss of 38 percent. That is, with an average loan balance of $58,000, the dollar loss per assigned loan is $28,000, which is $6,000 more than the cost of a direct foreclosure from the insured portfolio (without the use of an assignment option). The assignment program only affects a small part of the seriously delinquent loans handled by FHA each year. Only 15 percent of all serious defaults qualify for the single-family assignment program. Many loans fail to qualify because the default is judged not to have been beyond the control of the borrower or because the borrower is judged not to have reasonable prospects of resuming full payments within 36 months and repaying all accrued arrearages within 10 years past the mortgage maturity date. Because of a combination of statutory, budget, and judicial restrictions, HUD has been limited in its abilities to offer other options to borrowers who have become seriously delinquent but who do not qualify for assignment. Therefore, FHA has missed some important opportunities for loss mitigation and possibly some opportunities to help distressed borrowers avoid foreclosure.
Recently, however, FHA has begun to provide one alternative to families who are ineligible for assignment or who waive their rights to assignment. The Stewart B. McKinney Homelessness Assistance Amendments Act of 1988 authorized FHA to pay insurance claims on mortgagor house sales in lieu of property foreclosures. FHA avoids expenses related to foreclosure processing and subsequent property management and disposition and homeowners are released from an unmanageable property. FHA conducted a demonstration of the value of preforeclosure sales from October 1991 to September 1994 in three cities--Atlanta, Denver, and Phoenix.
A HUD evaluation studied the experience of more than 1,900 cases that entered the demonstration program through March 31, 1993. Successful sales rates varied across demonstration sites, but in total averaged 58 percent across sites. Another 5 percent of participants used the reprieve from foreclosure processing to cure their loans, and an additional 8 percent voluntarily transferred property deeds to FHA after failed sales efforts. Only 28 percent were referred back to servicers for foreclosure. Each successful sale generated $5,900 in savings on claims and avoided property management expenses. In contrast, properties that were either returned for foreclosure or had titles deeded to FHA cost HUD $2,600 in time cost during demonstration participation. Overall, each program participant saved HUD an expected net cost of $2,900. Subsequently, FHA has extended the preforeclosure sales option to all cases where foreclosure is a likely outcome, and HUD now expects even higher savings on each sale due to improvements in program design. Based on an expectation of 10,800 participants per year, national implementation would generate a total annual savings of $58 million.
Conclusion
FHA and the private mortgage market are still learning from the experience of the last 10 years -there is room for more improvements. While the private sector has been successful in applying loss-mitigation and borrower-protection techniques, it has failed to take full advantage of them. Servicers must generally prove to insurers and credit agencies that they have provided a good faith attempt at helping borrowers to cure loan defaults before initiating foreclosure, but not that they have made a good-faith effort in loan workouts. This asymmetry is also apparent in the workout approval process. Insurers and credit agencies generally must approve servicer applications for workouts but not servicer denials of workouts to borrowers in default. Fannie Mae has been the first to reverse this policy, as it now requires servicers to provide a recommendation on all noncured loans.
Uneven application of these techniques is further demonstrated when institutions concentrate their loss-mitigation efforts in areas of the country experiencing the worst problems, so that servicers in other areas have less incentive to pursue workouts. There are some notable exceptions to this situation, such as Fannie Mae grading servicer performance in curing defaults against regional averages, and both Fannie Mae and Freddie Mac waiving approvals if there will be no cost to them.
FHA has not taken full advantage of cost-saving foreclosure-avoidance techniques. The pending report to Congress cited at the beginning of this article lays out a potential framework that would allow FHA to catch up with the private market in this important area of foreclosure avoidance and loss mitigation.
What does the future hold? Certainly, the entire mortgage industry hopes that it does not have to face another long series of regional housing market declines like those experienced over the past 15 years. But if it does, the now standard practice of looking at foreclosure as a last resort will help strengthen homeownership, reduce house price declines, and maintain a healthier system of lending and insuring home mortgages.

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1 million properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.




“Foreclosure activity subsided somewhat in June after hitting a 30-month high in May,” said James J. Saccacio, chief executive officer of RealtyTrac. “And the drop in activity was fairly broad, with 33 states reporting month-over-month decreases. Still, the foreclosure rates in most states remained substantially above last year’s levels.”

Foreclosure Filings Still Up 87 Percent From June 2006

Foreclosure Filings Still Up 87 Percent From June 2006


A total of 164,644 foreclosure filings - default notices, auction sale notices and bank repossessions - were reported in June, down 7 percent from the previous month but still up 87 percent from June 2006. The national foreclosure rate for June was one foreclosure filing for every 704 U.S. households. "Foreclosure activity subsided somewhat in June after hitting a 30-month high in May," said James J. Saccacio, chief executive officer of RealtyTrac. "And the drop in activity was fairly broad, with 33 states reporting month-over-month decreases. Still, the foreclosure rates in most states remained substantially above last year's levels."

Your Options Against Foreclosure

Foreclosure may occur. This is the legal means that your lender can use to repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued. If that happens, you not only lose your home, you also would owe HUD an additional amount.

Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if possible.

Q: What Should I Do?
DO NOT IGNORE THE LETTERS FROM YOUR LENDER. If you are having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help.
Stay in your home for now. You may not qualify for assistance if you abandon your property.
Contact a HUD-approved housing counseling agency. Call (800) 569-4287 or TDD (800) 877-8339 for the housing counseling agency nearest you. These agencies are valuable resources. They frequently have information on services and programs offered by Government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.
Q: What Are My Alternatives?
You may be considered for the following:

Special Forbearance. Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses. You must furnish information to your lender to show that you would be able to meet the requirements of the new payment plan.

Mortgage Modification. You may be able to refinance the debt and/or extend the term of your mortgage loan. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem and can afford the new payment amount.

Partial Claim. Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.

You may qualify if:
your loan is at least 4 months delinquent but no more than 12 months delinquent;
you are able to begin making full mortgage payments.

When your lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay your lender the amount necessary to bring your mortgage current. You must execute a Promissory Note, and a Lien will be placed on your property until the Promissory Note is paid in full.

The Promissory Note is interest-free and is due when you pay off the first mortgage or when you sell the property.

Pre-foreclosure sale. This will allow you to avoid foreclosure by selling your property for an amount less than the amount necessary to pay off your mortgage loan.

You may qualify if:
the loan is at least 2 months delinquent;
you are able to sell your house within 3 to 5 months; and
a new appraisal (that your lender will obtain) shows that the value of your home meets HUD program guidelines.

Deed-in-lieu of foreclosure. As a last resort, you may be able to voluntarily "give back" your property to the lender. This won't save your house, but it is not as damaging to your credit rating as a foreclosure.

You may qualify if:
you are in default and don't qualify for any of the other options;
your attempts at selling the house before foreclosure were unsuccessful; and
you don't have another FHA mortgage in default.

For More Info, check out The Note Service