7% of Homeowners and 40% of Subprime Homeowners 30 Days Behind on Mortgage

Tampa Bay Realtors will tell you that their cell phones are starting to ring again. And no I’m not talking about bill collectors calling. These calls are from buyers hungry for deals. Buyers of all shapes and sizes are starting to peek out from under their rocks and from behind their trees, which is actually quite frightening if you aren’t expecting it.

But all this activity doesn’t seem to be enough to hold back the tide of financial ruin that is sweeping across our nation. Equifax just released these statistics:

Dann Adams, president of U.S. Information Systems for Equifax Inc, reported that 7 percent of homeowners with mortgages were at least 30 days late on their loans in February, an increase of more than 50 percent from a year earlier.

He also said 39.8 percent of subprime borrowers were at least 30 days behind on their home mortgage loans, up 23.7 percent from last year.

“I’m trying to find optimism in these numbers, but I’m pretty hard pressed to do that,” Adams said, despite a recent burst of relatively positive news that has fueled hope that the U.S. housing market has turned a corner. Reuters

Pretty depressing isn’t it? On a positive note…..actually, I can’t think of anything positive about this right now, but I’ll get back with you when I can.

Avoiding Foreclosure – Two Options for Homeowners

I just finished reading a Reuters article that said home foreclosures for January of this year were up 57% over January of 2007.

I guess it takes numbers like that do really drive home what’s happening in this country. I knew foreclosures were way up as a result of the subprime mortgage crisis that started last year, but that 57% increase still shocks me.

So lately I’ve been publishing a series of articles to help homeowners avoid home foreclosure altogether. In this article, I’ll explain the two paths a homeowner can take based on his or her financial situation: (1) the “get back on track” option and (2) the “sell the home quickly” option.

Essentially, these two options classify homeowners into one of two camps:

1. Those having temporary financial problems who could still keep the house.
2. Those having long-term problems who can no longer afford the home, period.

Getting Back On Track to Keep the Home

In the first camp, we have those homeowners who have had only temporary financial problems, and expect to get caught up on their mortgage payments. These people can work with their lenders to come up with repayment or reinstatement plans in order to avoid foreclosure while keeping the home.

Generally speaking, you have two options to get caught up on your missed mortgage payments. You can pay back the missed payments as a lump sum (reinstatement), or you can spread that amount over future mortgage payments (repayment plan). These are the two most common options when the homeowner’s financial problems are only temporary.

Selling the Home to Avoid Foreclosure

In the second camp are those homeowners whose financial problems are more long-term in nature. In other words, these homeowners simply cannot afford their homes anymore. These folks can avoid home foreclosure by selling the home, possibly through the real estate short sale technique we covered last week.

This is where the real estate short sale comes into the picture. A short sale is a technique through which the homeowner sells the home for less than the amount owed to the lender, in order to sell the home quickly.

With this technique for avoiding home foreclosure, speed is of the essence. That’s why mortgage lender often allow homeowners to pursue a short sale in the first place … to sell the home quickly and to get the non-performing loan off their books. This is the closest thing to a “win-win” scenario the lender and homeowner will find when foreclosure is imminent.

Obviously there is a lot more to learn about the two primary paths outlined above, and the multiple options that each path presents. My point with this article is simply to help you realize that you do have options when trying to avoid a property foreclosure, and knowing what those options are is the first step to success!

About the Author: Brandon Cornett publishes the Home Buying Institute, a website full of advice on mortgages loans, house hunting, credit scores and more. Learn more or contact the author by visiting www.homebuyinginstitute.com

FHA Home Loans to the Rescue – Help for Homeowners

by Brandon Cornett

You can’t turn on the TV these days without seeing a news story about the U.S. economy in general and the housing market in particular. Starting in 2007, we began to see record numbers of home foreclosures, a trend that continued into 2008 (and one that shows no sign of slowing).

But for many homeowners, help is on the horizon. And it comes in the form of FHA refinance loans. Let’s take a closer look at this new program and what it promises to do.

Housing and Economic Recovery Act

The recently passed Housing and Economic Recovery Act of 2008 will help “at least 400,000 families” who are struggling with their mortgage payments and facing foreclosure. It will do this by providing FHA-insured refinance loans to switch the homeowners from high-rate ARM loans to lower fixed-rate mortgages. For those accepted into the program, the end result will be a lower monthly payment and more desirable fixed rate that will no longer adjust / increase.

History of the FHA

The Federal Housing Administration was created in 1934, during the Great Depression, to make home financing available to a greater number of Americans. The FHA does not actually make home loans to consumers. Instead, they insure certain loans made by private lending institutions.

You’ve probably heard the term “government-backed financing” before. The FHA program is an example of this. By having government insurance in their favor, private lenders are more willing to offer mortgages to borrowers they normally wouldn’t qualify (due to credit problems or other qualification issues). The lender is assured of getting their money back on the loan, even if the homeowner defaults and stops making payments. That’s what the FHA insurance does.

The Refinancing Angle

Traditionally, the FHA program was focused on helping buyers in the purchase of a home. But as a result of the aforementioned Housing and Economic Recovery Act, the program is being opened up to homeowners who want to refinance. According to the HUD website, “an estimated 400,000 borrowers in danger of losing their homes will be able to refinance into more affordable government-insured mortgages.” The program is slated to begin in October of 2008. To find out if you are eligible, visit the HUD website or refer to the Home Buying Institute resources mentioned at the end of this article.

Getting Away from ARM Loans

The goal of this new program is two-fold. It is designed to help struggling homeowners who have adjustable-rate mortgages (ARMs) convert to fixed rates. It’s also designed to lower their mortgage rates in the process. Lower rates and less uncertainty — a double win.

About the Author: Brandon Cornett is the publisher of Home Buying Institute, a website that offers advice for home buyers and mortgage shoppers. To learn more about FHA loan program or related topics, visit the Institute at www.homebuyinginstitute.com

FREE Foreclosure workshop

A FREE Foreclosure Workshop will be sponsored by the Pasco County Board of County Commissioners on Saturday, January 17, 2009 from 10:00 AM to 2:00 PM at the Victorious Life Church, 6223 Old Pasco Road, Wesley Chapel, Florida 33544. Information will be presented on short sales, legal aspects of foreclosures, and programs available in Pasco County. Housing Counselors will be available to speak with you about your particular situation. For more information call: Pasco County Community Development at 727-834-3445 or 813-996-7341 Ext. 3445, or 352-521-4274 Ext. 3445.

Wachovia Loss Mitigation Contact Information

Here is the current contact information for the Wachovia Loss Mitigation department. Please feel free to leave your comments and questions about the Wachovia Bank short sale process. Keep in mind I am a Florida Realtor and not an employee of Wachovia. I cannot help you with your short sale unless you are located in Florida and are interested in hiring me to list your home. I don’t work as a short sale consultant. This page is here for your benefit and I will try to answer questions as they arise, but don’t post personal information here thinking I will be able to help you negotiate your Wachovia short sale. Call the Wachovia Loss Mitigation contact information below if you need to sell your home short.

Wachovia Corporation
(866) 642-8608
8:00 a.m.-5:30 p.m. Monday-Thursday
8:30 a.m.-4:00 p.m. Friday

Don’t throw in the towel just yet

If you’re about to throw in the towel and just walk away from your home and mortgage you really need to reconsider. There are numerous great options available to you. Ignoring phone calls from your lender isn’t one of them. With a bit of effort and smarts you can solve your financial crisis and not have the nightmare of a foreclosure plaguing your credit report for the next 7+ years.

You might think I’m biased here, but hear me out. If you’re a few months late on your payments now is the time to call a good Realtor. While I happen to know one (me) I am suggesting you call ANY decent Realtor. A knowledgeable Realtor can help you explore the various options available such as a loan modification or a short sale. Don’t assume the banks are out to get you and sitting there at the corporate headquarters giggling about how they can’t wait to kick you out of your home. It just isn’t happening. Your lender does not want your home. They want money from you or from someone else. But there is no wild-eyed banker plotting to boot you from your home.

“But will they boot me?”

In a heart beat. Well, not an actual heart beat. Probably more like 20,000,000 heart beats…but who is counting? In Florida the foreclosure process takes about 5 – 6 months at the minimum. The time for action is the moment you start to slip behind in your payments. You need to be on the phone with your bank, and specifically the Loss Mitigation Department, discussing how you can get out of this predicament. Your bank will work with you if you give them a call.

“But I have called them and they were rude and mean and nasty!”

If this is the case you were probably talking to an idiot. Yes, you heard me right. If your lender doesn’t treat you with respect for making an effort to communicate with them and work towards a resolution then they’re idiots. It costs $20,000 or more for that bank to hire an attorney to initiate the foreclosure process. And then the costs start to really add up as the process moves along at a snails pace.

Most banks will treat you fairly and professionally, but few will offer empathy, sympathy or a shoulder to cry on. They’re dealing with thousands and thousands of other delinquent files and they cannot afford to get emotionally attached to you or your problems. If you call and get someone rude, mean and nasty politely end the call, wait an hour, and then call back. You’ll probably get a completely different person. And if this 2nd person is rude, mean and nasty then it is time to call me. I happen to specialize in dealing with rude, mean and nasty banks.

Free legal advice to troubled homeowners

TALLAHASSEE, Fla. – July 10, 2008 – Florida homeowners facing foreclosure have access to a lawyer and free legal advice through a program offered by the Florida Bar and Florida Legal Services. 
 
According to Florida Legal Services Inc., 77,000 state homeowners are in foreclosure, making Florida second in the nation only to California. And many others are at least 30 days past due on their mortgage payment, which places them at risk of having their loans foreclosed.
 
Florida Legal Services and the Florida Bar Association have partnered in establishing a toll-free hotline – (866) 607-2187 – that consumers can call. They’ll be asked a few initial questions about their situation to ensure accurate placement, and then be sent to a free attorney. The attorney will then negotiate with the lender on behalf of the client to keep the home from being foreclosed.
 
“I applaud Florida Legal Services and the Florida Bar for offering this public service,” says Florida Agriculture and Consumer Services Commissioner Charles H. Bronson. “Any effort that helps families keep their homes in this uncertain economy is beneficial.”
 
More than 10,000 Florida attorneys have volunteered their services in the program, according to Florida Legal Services Inc.

Why “Foreclosures” May Not Be a Good Deal

Many real estate web sites and foreclosure database advertisements promote that their “foreclosure” list is the way to buy investment properties in the current market. Buyer beware! The word “foreclosure” does not suggest a real value, a potential for profit, or a good investment.

The Foreclosure lists that are sold by many online real estate databases and foreclosure publishing companies are an inaccurate source of investment opportunities for 3 main reasons:

1. Many Home Owners in foreclosure owe the bank and other liens (tax liens, child support, lawsuits) more than the house is worth, more often than not, there is very little or NO investment equity for an investor to buy into.

2. The real estate foreclosure lists are compiled based on only one criteria; Properties in Default. The notice of Default is only the first step of a four month process. Nothing in these real estate foreclosure lists guarantee that the property is for sale by the owner or that the owner is even interested in entertaining an offer or answering the door. There is a great potential for the investor to spend a lot of time evaluating real estate investment properties that may very well not even be for sale.

3. There is no basis provided to sort, filter or otherwise evaluate the properties by investment equity, real estate value or any other real estate profit determining value. Again, there is great potential for the Investor to spend a lot of time evaluating real estate investment properties that may very well have no equity or profit potential in them at all.

So how do I find a real estate foreclosure investment?

Consult a real estate professional, such as a realtor or seasoned investor. Discuss their real estate investment knowledge and background. Find out what they know about investing in real estate, buying foreclosures, buying fixer uppers, flipping real estate for profit, or just plain making money in real estate investments. If you do not know any, your best bet is to join a real estate investment based web site which exclusively advertises under-value, discount real estate investment properties for sale and promotes a select few qualified real estate agents and other real estate business professionals that will help you through your real estate investment. Look for web sites that compare asking price to market value so that you can easily determine the equity spread. Make sure it is a real estate sales site and not a Notice of Default publication (these homes are not for sale). And look for a FREE trial so that you can experience the product before you pay.

Find Real Estate Investment Deals at http://www.PropertyHookup.com

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