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:
Foreclosures
:
Foreclosure Basics
by
James Smith
The
thought of losing your home is one of gut-wrenching pain for
many people who are in the predicament of not being able to
keep up with their mortgage payment every month. Your day
to day activities can be consumed with worry and distraction,
not to mention never-ending phone calls from bill collectors.
You might ask yourself if you can avoid foreclosing and losing
your home?
First,
besides losing your home, just what does foreclosure mean?
It
is the legal means by which a bank or other creditor to which
you owe money, sells or repossesses your home or a piece of
real property you may own, due to your default on a promissory
note. When your house is foreclosed upon, you must move out
and leave your home and find a new place to live. Your home
is usually offered for sale at a public forecloseure auction
in order for the lien holder to make enough money back to
cover, or pay for, their lien on your property. Once the property
is sold, it is said that the lender or lien holder has foreclosed
it's lien.
There
are many full and part time real estate investors who look
for foreclosure sales all over the country. They hope to gain
profit by picking up a foreclosed upon home at less than market
value and then later resale it at a profit.
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Also
read:
• What
is Foreclosure
Many of us have heard the term foreclosure in relation
to other individuals and understand that it is not a
pleasant term, but do not have a firm grasp on what
it actually means. Before we go any further in discussing
the profit potential available through foreclosures
it is critical that we define the term foreclosure.
•
Financial
Difficulties. How To Save Your Home
People who have financial difficulties may find themselves
in a situation where they know they can't continue making
their mortgage payments. If that happens to you, come
up with a game plan before you become delinquent.
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There
are two usual types of foreclosure in most common law states.
Under "strict foreclosure," the bank claims the
title and possession of the property back in full satisfaction
of a debt, usually on contract. In the proceeding simply known
as foreclosure, the property is exposed to auction by the
county sheriff or some other officer of the court. Many states
require this latter sort of proceeding in some or all cases
of foreclosure, in order to protect any equity the debtor
may have in the property, in case the value of the debt being
foreclosed on is substantially less than the market value
of the property. In this type of foreclosure, a deed is issued
to the winning bidder at auction. Banks and other institutional
lenders typically bid in the amount of the owed debt at the
sale, and if no other buyers step forward they get title to
the property in return.
However,
some states utilize non-judicial foreclosure proceedings,
in which the mortgagee, gives the homeowner a legally specified
notice of the default and the mortgagee's intent to sell the
property. If the homeowner fails to satisfy or pay off the
debt, its default, or use other lawful means, such as filing
for bankruptcy to stop the sale, the mortgagee or its representative
will conduct a public auction in a similar manner as the auction
described above. The highest bidder at the auction becomes
the owner of the property free and clear of any interest of
the former homeowner.
Useful Tips To Avoid Foreclosure
• Do not ignore letters or contact from your lender and
show good faith. If you are having problems making your payments,
call or write to your lender's Loss Mitigation Department
without delay. Explain your situation, let them know that
you want to work this out and see what assistance they might
be able to lend.
• Do not yet leave your home. Leaving may disqualify
you from assistance.
• Contact a HUD-approved housing counseling agency. Call
(800) 569-4287 for the housing counseling agency nearest you.
These agencies are valuable resources and 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,
and they can help explain possible alternatives.
Possible
alternatives you may consider include:
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.
Mortgage Modification. You may qualify if you have recovered
from a financial problem and can afford the new payment amount.
Partial Claim. 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.
It is critical that you are sincere about your intent to satisfy
the lien on your property, and are willing to make changes
and sacrifice to carry it out. Most banks and lienholders
would rather work out a mutually beneficial solution with
you, than having to go through foreclosure proceedings.
About the Author:
James Smith publishes information on foreclosure
properties at http://www.foreclosures-i.com/
.
This article may be freely reprinted as long as the author's
resource box and url links remain intact.
• Find Properties - Free Foreclosure Search
Also
read:
•
Buy a foreclosure and save big
There's not many things more discouraging than calling
a real estate agent, giving them your financial information
and filling them in on what type of home you'd like to
buy for the price range you are comfortable with, then
seeing the look on their face and explaining to you what
you can really afford. While most people give in and settle
for much less, many others find a market that will allow
them to purchase homes below or well below what the market
dictates.
• Quitclaim deed
• Deed
• Florida HUD Approved Lenders
• Florida foreclosure statutes |
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