Part # 1 of a 2 Part Series.
http://activerain.com/groups/foreclosure
PLEASE NOTE: Homeowners in mortgage foreclosure are STRONGLY encouraged to retain the help of a competent real estate attorney.
Foreclosure Prevention and Assitance Tips, How to Avoid Foreclosure:
Tip # 1) Don't abandon the property. From the time you first receive notice of mortgage default from you lender, the foreclosure process can take up to one year (and often times, even longer) before you will be physically removed from your home. It is imperative for you to maintain your home as your primary residence in order to delay the foreclosure process. Most banks and mortgage lenders will not even consider your application for assistance if you abandon the property.
Tip # 2) Don't ignore correspondence and other notices sent to you by your mortgage lender or the legal representatives (attorneys) of the lender. These notices often contain pertinent information such as response deadlines, court dates and places, etc. If you ignore these notices, or fail to respond to them, you may lose valuable rights to defend yourself in court.
Tip # 3) Don't make partial mortgage payments to your mortgage lender, unless you have received specific written approval from your lender to do so. Once you are in default (Over 60 Days Past Due on you loan) partial payments will be applied to interest/penalties only, or put into a special "suspense account". These partial payments will not reduce your principal balance. You should only make partial payments if you have made prior arrangements for a "mortgage loan work-out program", and make absolute certain that you have all of the details about these payment arrangements in writing.
Tip # 4) Don't believe the promises of "Foreclosure Counselors" or "Loss Mitigation Specialists" that work for your mortgage lender and claim to be "looking-out for your best interest". Their job is to gather information from you that will expedite the foreclosure process for their employer. Always make sure that all promises made to you from these counselors/specialists are given to you in writing.
Tip # 5) Don't fall victim to the various consumer scams that promise to "settle your mortgage debt for pennies on the dollar", But, require that you pay an up front fee (often in the thousands of dollars) to "represent you" in negotiating with the lender. These scams often prove useless, and can even result in you losing your home faster than the standard foreclosure process. Legitimate REALTORS who know the foreclosure process are compensated by a sales commission, paid only at closing, from the proceeds of sale. There should never be an "up-front fee" (charged to you) to conduct a "Loan Work-Out" or "Pre-Foreclosure Short-Sale".
Tip # 6) Don't attempt to qualify for a "Mortgage Loan Workout Program" if you no longer wish to live in your home. Or, if your home is going to cause additional/increasing financial burdens for you in the years to come. Work-Out programs are designed for short-term financial difficulties that will be cured in six months to no more two years. If your financial situation is not likely to improve in that time, or if your home is in need of significant structural/ mechanical improvements in the near future, it will probably be better to sell your home now, rather than allowing it to deteriorate further (and sell for even less) in the years to come.
Tip # 7) Don't attempt to sell your home "For Sale by Owner" (FSBO) in the belief that you can get more money from the sale of your home by avoiding the payment of a real estate commission. Most mortgage lenders will require that you provide proof that your home be listed in the local Multiple Listing Service (MLS) of your local Board of REALTORS in order to consider it for a "Pre-Foreclosure Short-Sale".
Tip # 8) Don't become "greedy" when you do attempt to sell your home under a "Pre-Foreclosure Short-Sale". Very few sellers ever receive any money at closing when conducting a "short-sale" (after all back fees and expenses are deducted). Your main objective is to sell the home at the highest price that the market will allow. A competent REALTOR will provide you with comparable "Sold/Listed" properties in your neighborhood, and will help you to determine your home's "fair-market value range". This is the price range in which your home should sell under normal market conditions. It is the most money you will receive for the home.
Tip # 9) Don't accept "Low-Ball" Offers to Purchase Real Estate that you receive on your home, "just to get the sale over with". Only accept an offer that can be justified from using recent "Sold/Listed" Comparable properties. Your mortgage lender (and any other lien holders on the property) will always have the final say as to whether or not they will accept the "short-sale" offer- and they will always require that an appraisal be done on the home to justify the price offered. If the offer meets their expectations, they will accept it as written.
10) DON'T panic!!! This is the most important point of all!! As mentioned, the foreclosure process can take up to a year, and even longer in many cases. If you remain calm, and take the necessary steps as early in the process as possible, you and your mortgage lender may very well find an acceptable common solution to your mortgage delinquency/foreclosure problem.
Paul David Hiebing, REALTOR, "The Quad-Cities Premier First-Time Homebuyer's Specialist"
HUD Approved Foreclosure Counselor. Do Not Lose Your Home to Foreclosure! Call me for the help you need!
Licensed in Iowa and Illinois
Grampp Realty/GMAC Real Estate
2500 18th Street
Bettendorf, Iowa 52722
Website: http://www.gmacrealestate.com/paulhiebing/
Office Phone:(563) 359-4401 Ext # 264
Cell Phone: (563) 508-1649
Office Fax: (563) 359-4405
PLEASE NOTE: Homeowners in mortgage foreclosure are STRONGLY encouraged to retain the help of a competent real estate attorney.
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