Thousands of homes end up in foreclosure every year. Defaulted payments on your home mortgage may result in your losing your prized asset. Divorce, loss of employment, unexpected expenses and loss of life are the most common reasons for a home foreclosure. The foreclosure homes are sold for the appraised value at the time of foreclosure. Home foreclosures are not governed by a single law for the entire US. Instead each federal and local government agency applies its own rules. Are there any steps you can take to stop home foreclosures ? Is it advisable to invest in HUD home foreclosures or bank home foreclosures ?
Typically a foreclosure proceeding begins after 3 mortgage payment defaults. The lender will initiate home foreclosure proceedings on the mortgage unless it is stopped with suitable debt payments. Home foreclosure legal proceedings are initiated by a creditor to repossess the collateral for the default in the mortgage.
Acquaint yourself with different types of home foreclosure processes. A home foreclosure will adversely affect your credit report. You are likely to be charged higher interest rates by other creditors after a home foreclosure. Ensure that you establish a good credit history, post home foreclosure proceedings. Pay your bills on time and avoid missed payments. It might be advisable to wait for a couple of years before applying for a fresh home loan.
Stop home foreclosure
If you have been defaulting on your home mortgage payments, you stand the risk of home foreclosure. The best option to stop a home foreclosure is to bring your mortgage payments up to date. Communicate with your lender and work out a repayment schedule. Modify your mortgage to add past dues. Special programs are available for those with FHA; federal VA loans and others covered by state veterans programs.
You need to possess sufficient equity in the house to be able to stop the home foreclosure. Alternatively you can refinance your existing home mortgage. This will stop home foreclosure since you will pay off all outstandings with the new mortgage. You also have a choice of selling the property or deeding it to the lender for ending the home foreclosure. Bankruptcy is a temporary alternative to stop home foreclosure. It gives you some leverage time. Check out best option for you to stop your home foreclosure from non-profit consumer credit counseling offices.
Home foreclosure for sale
If you are looking for a bargain real estate deal, consider the foreclosure home market. You can look up home foreclosure listings to pick out attractive foreclosure properties. Foreclosure auction sales can also offer homes to the highest bidder, but 100% of the sale price must be paid in cash within 24 – 48 hours. But before you venture into purchase of foreclosure home, it is essential to familiarize yourself with the real estate conditions in the area.
This will arm you adequately to determine the spread between the future price of the foreclosure home and the average sales price. Investment in foreclosure homes is not a quick get rich scheme. It is necessary to secure adequate financing before negotiating on a foreclosure home. Work with a lender who understands the foreclosure process and provides guidance on FHA compliance. Not all lenders finance foreclosure properties.
Conduct a thorough examination of the foreclosure property to determine its condition and value and find out the amount in default as well as remaining loan balance. Ensure that the property is free of any financial liabilities. The best purchase can be secured during the pre-foreclosure stage. The advantage of purchasing a foreclosure home from a private homeowner is that you can get a home at a below-market price while the homeowner gets to come out of a mortgage without damaging his credit rating.
The Internet has made foreclosure property hunting a breeze. You can search for foreclosure home listings by state and zip code to locate one in your target area. This foreclosure home listing provides potential homebuyers with details such as the size of the house, number of bedrooms and bathrooms, the price and the contact number. Many a time, the address and photograph of the foreclosure home is also found.
HUD home foreclosure
HUD is the largest single resource for real estate foreclosures in the US, primarily because everyone qualifies for a FHA loan. When someone with a HUD insured mortgage is not able to meet the payments, HUD forecloses on the home by paying the lender what is owed and taking ownership of the home. Normally, HUD foreclosure homes are sold in an ‘Offer Period'. You cannot directly bid for such properties directly with HUD.
It is essential to go through a real estate agent to place an offer or bid. According to the HUD/FHA government foreclosure bidding formula, you can bid 5% below the asking price at a maximum. If your bid is acceptable to HUD, your real estate agent will be notified, usually within 48 hours. HUD home foreclosure listings include properties that are sold ‘as is'. Foreclosures on homes financed by VA, HUD and FDIC (Federal Depository Insurance Corporation can make for lucrative investments.
The database of such foreclosures is found on foreclosure listings. Bank and financial institutions also supply their REO listings to the home foreclosure database. Bank home foreclosures are called REO- Real Estate Owned. Such REO homes are offered at rates that are substantially below market value. Banks may also offer low-cost financing to purchase REO homes. Municipalities also offer home foreclosure opportunities.
Bank foreclosure home
Rates for bank foreclosure homes are determined by the bank. Check out the tax records to determine the amount mortgaged prior to the bank home foreclosure. Bank home foreclosures are listed for sale for realizing the proceeds and eliminating real estate holdings. Bank foreclosure homes are sold in ‘as is' condition and may need some working upon. While some homes may need just new paint and minor repairs, others may need considerable refurbishment. This is because people defaulting their mortgage payments are unlikely to maintain their homes. You may be able to obtain favorable loan terms from the bank that is foreclosing the home.