Foreclosure is hitting everyone from the poor to the wealthy these days, so it’s not unusual to see empty, vacant houses in the neighborhoods and lis pendens notices in the public records. If you’ve been hit by foreclosure, don’t feel bad, because you are definitely not the only one. While you may be a bit depressed about having to rent for a while (and let’s face it, you’ll have to), you will almost certainly want to buy a house again one day. So, you may be asking yourself, “How long after foreclosure can I purchase a home?”

The answer to how long after a foreclosure until you can purchase a home depends on what type of loan you’re trying to get. If you have twenty percent to put down on the house, you can often get a conventional mortgage right after experiencing a foreclosure, as long as all of your other financial and credit statuses look good. Of course, twenty percent is a lot, even for a home that’s only $100,000, so you may have to wait until you can save it up.

If you’re buying a house with owner financing or as a lease option, there’s no wait after a foreclosure, either, because you are not going through a bank to get your loan. You will be working directly with the owner of the home to set up your payments, and if you don’t make the payments, the owner simply takes back possession of the house. Your credit is typically not damaged (though you can’t use the owner as a reference for future housing), and your credit is not checked to get this type of financing. With more people facing foreclosure, more owners are offering this type of financing to potential buyers.

This is the tenth installment in our foreclosure series. Be sure to check back for updates…

By Jonathan Gillham

To a family or an individual, losing their home is the most traumatic thing that can ever happen to them. With the current downtrend in the economy and people losing their jobs like dominoes falling down not being able to make your monthly payments to lenders or banks becomes more difficult if you are laid off or your working hours have been reduced. The task of even feeding your family becomes a huge problem especially if you have kids who are babies or schooling.

When you fail to make payments on time to the lender for a loan mortgage, trying to short sale your home can sometimes be rejected by the lender due to the real estate market declining by the day. In fact there are times when you are unable to sell at all. With so many problems to deal with, you may at times not understand why the lending institution or bank refuses the short sale.

Your core problem lies with the hardship letter you produce. You need to produce a hardship letter that delves right deep into the core problem you are facing. Wording your hardship letter is extremely important. It could also be the main reason for rejection so making sure it is first priority should be your goal.

The lender may want to foreclose your home as it may be more profitable especially when there is mortgage insurance involved. Lenders always make sure that the documents that you sign at the time of taking a loan mortgage, has a clause that gives them the legal rights to foreclose your property in case of defaulted payment.

When you submit a proposal to the bank to do a short sale, you may have inadvertently submitted an incomplete one.

The offer you propose may be much lower than the current sale values making it difficult for the lender to recover the monies owed by you not to mention the interest.

Although you may think your proposal is complete a lender or bank may reject it due to numerous reasons. With short sale the banks tend to lose which is the reason they are meticulous. Most people who want their homes put on short sale try to sell in exchange for the outstanding loan mortgage. There are times when you are confident that it will work, the bank rejects your proposal to dispose of you home in this manner.

You should never give up and let your home be foreclosed. There are several methods that you can use which will help you retain your home and your peace of mind. It will also help make your family feel more secure.

Double check and make sure your proposal is one hundred percent complete. If in doubt ask someone who has gone through this same procedure and succeeded. There is no doubt with foreclosure being the ‘first word’ there are many out there who would do anything to save their homes, so make sure you keep yourself updated with the trends.

Next step is to make sure you follow up on your proposal.

Try getting opinions and prices from brokers. Make enquiries so you know you are on the correct track.

To prepare these critical documents you can use the Complete Loan Modification Kit which provides you with all the forms, document templates and an extensive how-to guide.

To learn more about the loan modification process please visit: http://www.foreclosuresmedic.com

This is the ninth installment in our foreclosure series. Be sure to check back for updates…

By Greg Jordan

It is a great sadness today that more people have to choose if they should let the bank foreclose on their home. Today, this decision is happening at all income levels, and homeowners and investment property owners decide sometimes to simply walk away and let the bank foreclose, thinking that it is the easier choice.

The truth is that unless you are wealthy, and plan on paying for everything in the future with cash, you should avoid foreclosure if at all possible. And if you’re that wealthy, you ought to pay your debt anyway.

This article describes general factors that I have uncovered in working through attorneys and brokers in my real estate business, which may give you some idea of important differences between a foreclosure and a short sale. Standard warnings apply here – seek the advice of an attorney who understands your specific situation before making your decisions.

First, let’s understand that foreclosure is the bank’s way of satisfying their financial claim against the property when the homeowner fails to pay per the note terms. They have that claim because when buying the house, the homeowner gave them a mortgage to secure the loan the homeowner took out. Every state has in place its own laws for this process, so it’s best to check with the state that you are in for details that affect you.

A short sale is actually a pre-foreclosure process that allows the homeowner to sell the property with the bank’s approval, for less than what is owed to the bank. After a short sale, depending on the financial situation of the owner, and their policies, the bank will either seek a judgment against the owner for the balance, or not. If they do not pursue a judgment, the homeowner will still have to face the IRS, who views the forgiven mortgage balance as phantom income.

So, if someone, either the bank, or the IRS is going to come after the balance, or the taxes, why would anyone want to do a short sale? Why not just walk away and let the bank foreclose? Because in most states, the bank has the same rights – they can still seek a judgment against the homeowner after foreclosure.

Here are some other considerations that figure into this decision:

• With a foreclosure, your credit score may be lowered by 250 to 300 points. Typically they affect your score for over 3 years. In a short sale, the credit score is lowered by 50 points and the mortgage will be reported as paid or negotiated, while affecting your score for 12 to 18 months.
• A foreclosure remains on the credit history for 10 years or more. A short sale is not reported on a credit history. It is usually reported as “settled for less than the full amount”.
• A foreclosure in many cases is grounds for immediate reassignment or termination. A short sale is not a challenge to employment.
• A foreclosure is a serious challenge to a security clearance, in almost all cases resulting in a denial or revocation of a security clearance. A short sale is not a challenge to a security clearance.
• A foreclosure takes much longer to process than does a short sale, resulting in a higher amount of the deficiency judgment for additional taxes, maintenance, and interest costs. A short sale will usually have a much smaller judgment associated with it.
• A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae mortgage for five years. A short sale homeowner is eligible for a Fannie Mae backed mortgage after only two years.

No one I am sure, wanted to be in a situation to have to make this choice. It is best of course to seek as much help as possible to avoid either one, but if forced to choose, the short sale route is truly the lesser of two evils.

Greg Jordan is an agent for the Keller Williams Company. He has been a businessman, an entrepreneur and an investor, who has been involved in real estate transactions for over 20 years.

Visit: http://www.yourfloridarealtyteam.com for information and Florida Real Estate Services.

Visit: http://www.realtimerealestateideas.com for Greg’s blog with local and national information that affect us all in real estate today.

 This is the eighth installment in our foreclosure series. Be sure to check back for updates…

If you’re behind on your mortgage, or even facing foreclosure, you may want to consider a loan modification. This will change the terms of your mortgage, often catching you up on missed payments and saving your home. The first step in the process is, of course, contacting your lender. However, before you get started, it’s good to know the answers to some common questions about adjusting your mortgage.

First of all, if you’ve accrued any late fees on your mortgage, HUD requires that your lender waives those fees for your loan modification. This is good news for you, as late fees can run into the hundreds, and even thousands of dollars. However, in order to get the modification approved, you’ll have to supply your lender with proof of income and other financial information in order to show that you’re able to make the new payments.

Further, you don’t even have to be currently late on your payments to apply for a modification. All you need to do is show your lender that you’re no longer able to afford the mortgage payments as they currently exist. If you’re falling behind on payments (or about to) due to a divorce, death of a co-borrower, job relocation, illness, or military service, your lender will give you special consideration in the modification approval process, as these circumstances are considered hardships. You’ll need to supply a letter detailing your hardship when you send in your application.

Missed payments can often be worked back into the new loan and spread out over a period of time to help you get back on your feet. The entire purpose of a loan modification is to stop foreclosure and get you current on your mortgage again, so lenders are willing to do what is necessary to make this happen, as long as your requested terms are reasonable.

be aware that your lender will usually require a large up-front payment to get the loan modification process started. However, if you’re in real need and your income qualifies you, that large fee will most likely turn out to be money well spent as you’re given the chance to save your home.

This is the seventh installment in our foreclosure series. Be sure to check back for updates…

What happens after foreclosure? Most of us know that foreclosure is the process through which a lender takes legal ownership of a home to recover the cost of an unpaid mortgage. It’s an ugly situation that no homeowner wants to find himself in, but that’s becoming more and more common as the nation’s housing crisis deepens. In fact, hundreds of thousands of foreclosures are filed by lenders each month, and that number is growing. Most people try to stop the loss of their home to the bank, either by working out a payment arrangement or selling the property. Very few really know what happens if the foreclosure goes through. For homeowners facing this prospect, this is very important information.

When a foreclosure runs to its conclusion, one of four things usually happens:

*The homeowner pays off the mortgage, usually through a refinance, but sometimes through cash. Once the mortgage note is paid off, the foreclosure becomes null and void. The homeowner can pay off the mortgage at any point during the proceedings, right up until the time the bank takes possession of the property.

*The homeowner sells the property for the full amount of what’s owed on the mortgage. Again, this pays off the loan and stops the bank from taking possession. The house can be sold by the homeowner at any point, right up until the foreclosure auction.

*The home is sold at a public auction. Depending on the state, this auction may be held on the courthouse steps, at the home, or elsewhere. The highest bidder gets the deed to the property, and is usually required to pay cash.

*The bank takes possession of the property.  This usually happens when there are no bidders on the property at the auction, or no one bids high enough to satisfy the lender. Banks can also take possession of the property through a deed in lieu of foreclosure arrangement with the homeowner (the homeowner gives the deed to the lender on a voluntary basis). Once the bank owns the property, it becomes known as a REO (Real Estate Owned by lender), and the lender is responsible for its upkeep and maintenance. As can be imagined, lenders typically try to sell REO properties as soon as possible, as these are a great expense to them.

After the foreclosure has been completed, there may be a redemption period in which the homeowner can still reclaim the home. Not every state has a redemption period, so be sure to check your own state laws if you’re facing foreclosure. Redemption periods can last from a few days to a month or more, and you can not be evicted from your home during this time, even if the home has been sold at auction. If you’re able to come up with the money to pay off the mortgage during the redemption period, you get to keep ownership of your home. If your state has no redemption period, then you’ll likely have to leave the house as soon as the foreclosure sale is complete. It’s important to know what happens after foreclosure, so you can be sure your interests are protected and your full rights are exercised during the entire process.

This is the sixth installment in our foreclosure series. Be sure to check back for updates…