Spouse Objections to Rehabbing Real Estate
I’ve run across a lot of folks who tell me they’d love to do what I do, but their wife is just not comfortable with it. That’s a powerful objection, and sometimes it’s one that cannot be overcome. Most times, I think it can be, if you really want to. All too often, I get the impression the potential investor doesn’t want to jump into rehab real estate bad enough to work through the spouses objections. It’s the old “it’s easier NOT to” mentality!
The issue is usually not that your spouse doesn’t want the financial rewards that accompany the real estate rehab business. The reasons spouses object is usually good ol’ fear. For example:
fear of the unforeseen
fear of financial loss
fear that you don’t yet know what you’re doing (my favorite!)
The latter two are the big leaders. These fears may come from something they’ve heard, or they may be rooted in them not really understanding the transaction or what you’re trying to accomplish.
For my wife, her fears were that something would come up that I hadn’t thought of, or that a house may sit empty for several months thus depleting the bank account.
How to deal with the fears of your spouse regarding rehab real estate
Sit down and discuss their fears. Find out what they really are. You always want to deal with a known entity.
Be sure your spouse understands the importance of rehab real estate in your long term financial goals, and how it fits into your family’s security.
Always encourage your spouse to ask questions!
If your spouse expresses general fear of the whole thing, that may be because of a lack of understanding of the process or they are very intimidated by it.
Encourage questions!
Explain how the transactions will work
Explain how you are minimizing the risk to your family.
Yes, the numbers might be big, but if you aren’t putting a lot of your own money in it, then your risk of loss is minimal.
Go over the worst case scenarios. Explain that worst case, the property could be quickly sold for SOME profit.
Reveal to your spouse the folks you have working with you, such as your mortgage broker, your wholesaler (flipper), appraiser, and anyone else you’ve identified up to that point.
My wife was very distrustful of these folks in the beginning. I had to explain and show her that these folks had EVERYTHING to gain by my first deals going very well, if they wanted to continue making money with me.
If the fear seems to be of the unforeseen
Explain that while this seems complicated, you’ve done your homework and you’ve learned about all you can learn without actually doing a deal for experience. (You reach a point where this is true!)
Explain that you won’t own the property a minute without enough insurance to cover anything that could happen.
If the fear is financial loss
Depending on your personal financial situation, you should focus your spouse on how real estate can and does improve the lives of investors.
If you’ve already identified a property, reveal your worksheet and how much you stand to make off that property.
Agree with your spouse NOT to take on too much risk. Set your boundaries together. I assure you that you’ll easily revisit these the first time you bring home a large check.
Fear that you don’t have the knowledge
Be sure you are well studied! Remember, knowledge comes before the money! Spend the money on a good course, or book. Don’t rely on just one. Get several author’s take on the subject. There are inexpensive ways to do this!
Explain that you have studied this thoroughly. Heck, you’ve got a head full of knowledge that needs to be put into action in order to move forward.
Agree with your spouse. That’s why you are tapping into the knowledge of those real estate professionals around you! Explain who’s on your team, and what they have to gain from you. Remind your spouse that you are tapping into the knowledge of those around you, those that know your area very well.
When your spouse comes around and is resigned that you are going to do this, they may:
Sign on and dig in beside you for the deal and what follows (throw total support behind you).
Flatly say, they don’t agree, but if you must…
Something in between, like “Honey, you do whatever you think is best.”
This last possibility is what I predict will happen to most. This allows your spouse to give you the room you need, but at the same time not completely agree. That’s where my wife went. It was a safe position for her. And, it’s a safe position for you! You’ve got the go-ahead, so go ahead!
I was in that position myself. If was a good feeling to watch her fears fall away as I complete my first couple of projects. Her eyes got nice and big when I refinanced my first two properties at the same time and brought home more money in one day than I’d ever held in my hands before. I also watched her understand the benefits more completely while sitting in my CPA’s office and having him say to her “These properties are saving you big time on your taxes.” I dare not say, I told her so, but I told her so
Sure, there are challenges, but the paydays are great.
So, over time, my bride is my full partner taking on whole aspects of the business freeing me up to do the parts I do best.
Spouse objections can be show-stoppers, but these suggestions will hopefully help you deal carefully with them. It’s not enough to merely brush them aside and charge ahead. I recommend a loving, cautious approach because in good time and bad, your spouse is your greatest ally. Keep them close!
Showing posts with label work from home. Show all posts
Showing posts with label work from home. Show all posts
Friday, December 28, 2007
Thursday, November 15, 2007
Is Flipping houses a lucrative investment?
Flipping houses is one of the most lucrative investment strategies you can make. I stress that statement with one caveat, though: You absolutely must do your due diligence and your homework before you invest. Contrary to conventional wisdom, the hardest part about flipping houses is not the financing. (That's actually the easy part, because you don't even need to use your own credit or your own money.) The hardest part is not even doing the actual rehab work to fix up the foreclosure property and getting it back on the market. The hardest part is not even the negotiation or the bidding process. If you've done your homework, negotiation is really a matter of having the interpersonal communications skills to convey to the seller that you want to help them out.
The hardest part about flipping houses is doing the research and making the determination whether or not a particular property is worth investing in. Once you make the decision to either pass on a particular house or to go forward with the negotiation process, it becomes a matter of statistical numbers, salesmanship, and a bit of luck.
Many a time have foreclosure real estate investors been burned by neglecting to do their homework before investing in a particular parcel of real estate. Novice investors have a tendency to get emotionally attached to particular deals for some reason. Perhaps they like the house. Perhaps they think this house is a guaranteed home run and will net them with a nice decent five- or even six-figure profit. But when they actually sign the paperwork and handover the money to do the deal, the nightmare begins.
The house may need far more repairs than originally anticipated, and the investor had not bothered to do a visual walk-through of the house, or did not buy the house with a low enough loan-to-value (LTV) margin to leave room for repairs before flipping it. Or, the house is in a neighborhood or market where homes are sitting for upwards of six months at a stretch before being sold, and the investor ends up making monthly payments on the house that eat into his or her profits, and ends up having to rent out the place for less than the monthly payments on the mortgage are.
The house may have had an encumbrance on it such as a judgment lien or a second or third mortgage, and the investor didn't bother to conduct a title search to ensure clean title.
Or quite simply, the homeowner just didn't do a CMA (comparative market analysis) properly and didn't buy the house at a low enough percentage below market value in order to make the deal profitable.
You may have heard the expression from various foreclosure gurus that you make your money on an investment when you buy it, not when you sell it. In other words, what that means is that you should only be buying assets that have equity that can be realized.
Research is one of the single most important aspects of the foreclosure investing business. When done properly, you will find riches beyond your wildest dreams. When done improperly, you are digging a deeper hole for yourself financially. I know from personal experience, having done foreclosure investing, the sad reality of this fact. As a rookie investor, my first couple of deals I barely made a few pennies on. I was lucky that I didn't end up losing my shirt. I walked away with a few bucks. This was because I hadn't done the math right in my calculations because more was owed on the house than I previously thought. On another deal, I ended up paying more in repairs than I had anticipated, because I had never been inside the house before the homeowner deeded the house over to me. But then on my next deals, because I had done my homework properly (having learned from my mistakes with my previous deals), I was able to get into deals with a much healthier profit margin. A healthy profit margin is very important to maintain when doing your calculations. You can almost always expect that, due to factors beyond your control, you have the potential to make less on a deal than the numbers tell you that you will on paper. If you think you will net $20,000 on a particular property, you might end up only making $10,000 or $15,000, or who knows, maybe even less.
That is why research is important. That is why it is important to use a reliable foreclosure listing service that provides reliable and accurate data. Yes I could go to the courthouse and research the deals myself, but rather than spend countless hours looking through files from 8am to 4pm on weekdays, I would rather use my valuable time to evaluate pre-researched deals, make go / no-go decisions on each deal based on the researched information, and then focus more of my time on the actual process of making offers. If you want to be a successful real estate investor, you will learn that if you want to do a volume of deals, you will need to outsource some of your tasks. The easiest one to outsource is the compilation of foreclosure listings and researching of the deals. (You don't have to train anyone to do it, because there are services out there that already do this for you.)
Learn more about foreclosures and get access to all the tools you need to get started investing today at http://www.thenoteservice.com
The hardest part about flipping houses is doing the research and making the determination whether or not a particular property is worth investing in. Once you make the decision to either pass on a particular house or to go forward with the negotiation process, it becomes a matter of statistical numbers, salesmanship, and a bit of luck.
Many a time have foreclosure real estate investors been burned by neglecting to do their homework before investing in a particular parcel of real estate. Novice investors have a tendency to get emotionally attached to particular deals for some reason. Perhaps they like the house. Perhaps they think this house is a guaranteed home run and will net them with a nice decent five- or even six-figure profit. But when they actually sign the paperwork and handover the money to do the deal, the nightmare begins.
The house may need far more repairs than originally anticipated, and the investor had not bothered to do a visual walk-through of the house, or did not buy the house with a low enough loan-to-value (LTV) margin to leave room for repairs before flipping it. Or, the house is in a neighborhood or market where homes are sitting for upwards of six months at a stretch before being sold, and the investor ends up making monthly payments on the house that eat into his or her profits, and ends up having to rent out the place for less than the monthly payments on the mortgage are.
The house may have had an encumbrance on it such as a judgment lien or a second or third mortgage, and the investor didn't bother to conduct a title search to ensure clean title.
Or quite simply, the homeowner just didn't do a CMA (comparative market analysis) properly and didn't buy the house at a low enough percentage below market value in order to make the deal profitable.
You may have heard the expression from various foreclosure gurus that you make your money on an investment when you buy it, not when you sell it. In other words, what that means is that you should only be buying assets that have equity that can be realized.
Research is one of the single most important aspects of the foreclosure investing business. When done properly, you will find riches beyond your wildest dreams. When done improperly, you are digging a deeper hole for yourself financially. I know from personal experience, having done foreclosure investing, the sad reality of this fact. As a rookie investor, my first couple of deals I barely made a few pennies on. I was lucky that I didn't end up losing my shirt. I walked away with a few bucks. This was because I hadn't done the math right in my calculations because more was owed on the house than I previously thought. On another deal, I ended up paying more in repairs than I had anticipated, because I had never been inside the house before the homeowner deeded the house over to me. But then on my next deals, because I had done my homework properly (having learned from my mistakes with my previous deals), I was able to get into deals with a much healthier profit margin. A healthy profit margin is very important to maintain when doing your calculations. You can almost always expect that, due to factors beyond your control, you have the potential to make less on a deal than the numbers tell you that you will on paper. If you think you will net $20,000 on a particular property, you might end up only making $10,000 or $15,000, or who knows, maybe even less.
That is why research is important. That is why it is important to use a reliable foreclosure listing service that provides reliable and accurate data. Yes I could go to the courthouse and research the deals myself, but rather than spend countless hours looking through files from 8am to 4pm on weekdays, I would rather use my valuable time to evaluate pre-researched deals, make go / no-go decisions on each deal based on the researched information, and then focus more of my time on the actual process of making offers. If you want to be a successful real estate investor, you will learn that if you want to do a volume of deals, you will need to outsource some of your tasks. The easiest one to outsource is the compilation of foreclosure listings and researching of the deals. (You don't have to train anyone to do it, because there are services out there that already do this for you.)
Learn more about foreclosures and get access to all the tools you need to get started investing today at http://www.thenoteservice.com
Friday, October 5, 2007
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!
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!
Monday, September 24, 2007
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
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
Thursday, August 23, 2007
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.
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.
Friday, August 10, 2007
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 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."
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."
Wednesday, July 11, 2007
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
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
Tuesday, February 20, 2007
Understanding Foreclosure - Foreclosure Scams
Bankruptcy foreclosure fraud is a growing problem that threatens the integrity of
the bankruptcy system as it takes advantage of families in distress. The United
States Trustee Program is working hard to identify bankruptcy foreclosure scams
around the country and to take appropriate action through criminal referrals and
civil suits. Be especially alert to the following:
> Equity skimming: In this type of scam, a "buyer" approaches you, offering to
get you out of financial trouble by promising to pay off your mortgage or give you a
sum of money when the property is sold. The "buyer" may suggest that you move
out quickly and deed the property to him or her. The "buyer" then collects rent for a
time, does not make any mortgage payments, and allows the lender to foreclose.
Remember, signing over your deed to someone else does not necessarily relieve
you of your obligation on your loan.
> Phony counseling agencies: Some groups calling themselves "counseling
agencies" may approach you and offer to perform certain services for a fee. These
could well be services you could do for yourself for free, such as negotiating a new
payment plan with your lender, or pursuing a pre-foreclosure sale.
> Probably the most widespread foreclosure scam involves the use of
foreclosure notices to identify individuals facing the loss of their homes. The scam
perpetrator contacts the home owner, advertising "mortgage assistance" or
"foreclosure counseling" and promising to work out the home owner's problems
with the mortgagee or to obtain refinancing for an up-front fee typically ranging
from $250 to $850. The perpetrator may direct the home owner to "fill out some
forms," including a blank bankruptcy petition. The perpetrator subsequently files a
bankruptcy petition in the home owner's name. The bankruptcy petition invokes the
automatic stay, the imminent foreclosure is postponed, and the home owner stops
receiving collection calls and letters.
In most cases, the perpetrator does not tell the home owner about the
bankruptcy petition, instead convincing the home owner that foreclosure activity
has ceased because mortgage problems have been worked out. The perpetrator
may tell the home owner that he or she might receive a notice from the court, which
should be ignored. The home owner may even be told that the perpetrator has gone
to court on the home owner's behalf. No one appears at the Section 341 meeting,
the case is dismissed, the foreclosure goes forward, and the home is lost.
The United States Trustee Program welcomes information that will help detect
bankruptcy foreclosure scams, and is indebted to those trustees, judges,
clerks, secured lenders, bankruptcy attorneys, and private citizens who
report suspicious fact patterns. They coordinate with all participants in
the bankruptcy system to eradicate this destructive form of fraud. You
can find information online about the United States Trustee Program at
http://www.usdoj.gov/ust. For Your Information Foreclosure Scams
For - Understanding Foreclosure -
Sources: Federal Citizen Information Center, HUD, VBA, USDOJ
You'll appreciate the difference!
Fidelity
National
Title
Insurance
the bankruptcy system as it takes advantage of families in distress. The United
States Trustee Program is working hard to identify bankruptcy foreclosure scams
around the country and to take appropriate action through criminal referrals and
civil suits. Be especially alert to the following:
> Equity skimming: In this type of scam, a "buyer" approaches you, offering to
get you out of financial trouble by promising to pay off your mortgage or give you a
sum of money when the property is sold. The "buyer" may suggest that you move
out quickly and deed the property to him or her. The "buyer" then collects rent for a
time, does not make any mortgage payments, and allows the lender to foreclose.
Remember, signing over your deed to someone else does not necessarily relieve
you of your obligation on your loan.
> Phony counseling agencies: Some groups calling themselves "counseling
agencies" may approach you and offer to perform certain services for a fee. These
could well be services you could do for yourself for free, such as negotiating a new
payment plan with your lender, or pursuing a pre-foreclosure sale.
> Probably the most widespread foreclosure scam involves the use of
foreclosure notices to identify individuals facing the loss of their homes. The scam
perpetrator contacts the home owner, advertising "mortgage assistance" or
"foreclosure counseling" and promising to work out the home owner's problems
with the mortgagee or to obtain refinancing for an up-front fee typically ranging
from $250 to $850. The perpetrator may direct the home owner to "fill out some
forms," including a blank bankruptcy petition. The perpetrator subsequently files a
bankruptcy petition in the home owner's name. The bankruptcy petition invokes the
automatic stay, the imminent foreclosure is postponed, and the home owner stops
receiving collection calls and letters.
In most cases, the perpetrator does not tell the home owner about the
bankruptcy petition, instead convincing the home owner that foreclosure activity
has ceased because mortgage problems have been worked out. The perpetrator
may tell the home owner that he or she might receive a notice from the court, which
should be ignored. The home owner may even be told that the perpetrator has gone
to court on the home owner's behalf. No one appears at the Section 341 meeting,
the case is dismissed, the foreclosure goes forward, and the home is lost.
The United States Trustee Program welcomes information that will help detect
bankruptcy foreclosure scams, and is indebted to those trustees, judges,
clerks, secured lenders, bankruptcy attorneys, and private citizens who
report suspicious fact patterns. They coordinate with all participants in
the bankruptcy system to eradicate this destructive form of fraud. You
can find information online about the United States Trustee Program at
http://www.usdoj.gov/ust. For Your Information Foreclosure Scams
For - Understanding Foreclosure -
Sources: Federal Citizen Information Center, HUD, VBA, USDOJ
You'll appreciate the difference!
Fidelity
National
Title
Insurance
Sunday, January 7, 2007
Buying A Home - Mortgage Information
The decision to buy a home can be one of the most valuable and important investments one can make. Therefore it is important that you are familiar with the mortgage process so that you can wisely finance your home. Essentially, a mortgage is just a loan that is used to finance the purchase of property. The property itself is used as security to ensure repayment until you have repaid the entire amount plus interest. There are many types of mortgages on the market and finding the right one can be an overwhelming project. The best approach is to divide the process into manageable tasks. Sit down with a mortgage professional and examine the advantages and disadvantages of all available options to determine which product is best suited to your current situation and future plans.
How to Find the Right Mortgage
Estimate how long you expect to live in the house. If the answer is less than three to five years, consider an Adjustable Rate Mortgage (ARM), which typically starts out with a lower rate. If you plan to live in your new home longer than five years, a fixed-rate mortgage offers protection against rising interest rates.
Shop around for mortgage rates. Banks, credit unions, and mortgage companies all offer mortgages. Compare at least six lenders in your area.
Add up all the costs for each lender. Include fees, points, closing costs, etc., to arrive at the total mortgage cost for each lender.
Mortgage Terms
Amortization Period:The period of time after which, if all monthly payments are made on time and in full, the loan will be paid out.
Down Payment:The amount of money provided by you, the purchaser toward the price of the property (not including legal fees or other acquisition costs).
I
nterest Rate:The actual cost of borrowing money, charged as a percentage of the outstanding amount owed. Usually compounded on a monthly basis.
Mortgage Amount:The total amount of money to be borrowed by you, the purchaser, and applied toward the price of the property.
Prepayment Privileges:The right of the borrower to pay out all or part of the outstanding principal before it comes due.
Term of the Mortgage:The period of time during which the loan contract is active. During this period, you the Borrower makes periodic payments (usually monthly) to the lender and at the end of the term the balance of the loan becomes due and payable.
How to Find the Right Mortgage
Estimate how long you expect to live in the house. If the answer is less than three to five years, consider an Adjustable Rate Mortgage (ARM), which typically starts out with a lower rate. If you plan to live in your new home longer than five years, a fixed-rate mortgage offers protection against rising interest rates.
Shop around for mortgage rates. Banks, credit unions, and mortgage companies all offer mortgages. Compare at least six lenders in your area.
Add up all the costs for each lender. Include fees, points, closing costs, etc., to arrive at the total mortgage cost for each lender.
Mortgage Terms
Amortization Period:The period of time after which, if all monthly payments are made on time and in full, the loan will be paid out.
Down Payment:The amount of money provided by you, the purchaser toward the price of the property (not including legal fees or other acquisition costs).
I
nterest Rate:The actual cost of borrowing money, charged as a percentage of the outstanding amount owed. Usually compounded on a monthly basis.
Mortgage Amount:The total amount of money to be borrowed by you, the purchaser, and applied toward the price of the property.
Prepayment Privileges:The right of the borrower to pay out all or part of the outstanding principal before it comes due.
Term of the Mortgage:The period of time during which the loan contract is active. During this period, you the Borrower makes periodic payments (usually monthly) to the lender and at the end of the term the balance of the loan becomes due and payable.
Friday, January 5, 2007
Home Business Opportunities
Working from home is the ultimate experience. There are many different fields and choices to choose from. Travel to real estate, online stores to ebay, and the list goes on. When deciding on this profession, one must choose a pay scale and a working time frame. A budget is also a good idea. Advertising is a key component. There are big hitters and there are nickel and dime run of the mill work from home opportunities that will give you slow but enough income. For more info, check out http://www.thenoteservice.com/home-business-opportunities.html for some great starting points.
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