Foreclosure...There is help for many homeowners.

By
Real Estate Agent with RE/MAX Sauk Valley

You see there is hope...please don't bury your head...

  

You may be one of the many  homeowners eligible to refinance your home with Federal Housing Administration (FHA) insurance if you are falling behind in your mortgage payments with a new program called "FHA Secure.  As a homeowner you could qualify for this option if you meet the following five criteria: 1) a history of on-time mortgage payments before the borrower's teaser rates expired and loans reset; 2) interest rates must have or will reset between June 2005 and December 2009; 3) three (3%)  percent cash or equity in the home; 4) a  history of employment; and 5) sufficient income to make the mortgage payment. See http://www.fha.gov/ for more details, but DON'T DELAY!

One other option for the homeowner is to sell the home. Often times in these situations the sale will be a "short sale" in lieu of foreclosure." A "short sale" is a term we use when the owner of the home does not have enough equity in the property and cash to be able to sell the property, pay off liens as well as selling expenses ( property taxes, transfer taxes, real estate commissions) and to be able to provide the buyer clear title. Sometimes this is also called "upside-down" Some may consider a "short sale" better for you  in the long run because it avoids foreclosure which will damage a person's credit score and make it much harder for the owner to buy another home in the future.

A typical foreclosure will stay on your credit report for up to 10 years as it is a court action similar to bankruptcy. A foreclosure does even more damage to your credit report than bankruptcy. Ultimately, if you attempt to get a home loan in the future you must prove to the lender that the foreclosure happened due to something beyond your control such as job loss or illness.

 It's ideal if you the homeowner who chooses to sell can work with a professional REALTOR  before you are three months late. Within this short window of time I  can negotiate with the lender to place the property on the market and possibly save you any equity left as well as prevent a foreclosure on your credit file  

 

 

Things to remember for Illinois foreclosures:

•·         Don't ignore letters or calls  from your lender. Some of the information will include foreclosure prevention options. Call and talk to them right away.

•·         Address the problem immediately and BEFORE YOU ARE THREE MONTHS DELINQUENT...once it gets to that point additional fees may be added. But all is still not lost...

•·         Find your mortgage paperwork and read it to understand the terms. If you can't consult a competent real estate attorney...

•·         Contact a HUD-certified counselor who is trained to provide information on foreclosure prevention options, 1-888-569-4287

•·         Call  Neighborhood Works America Center for Foreclosure Solutions at 1-888-995-HOPE (4673).

•·         Visit the website Illinois Legal Aid, http://www.illinoislegalaid.org

•·         Know that you may qualify for options such as working with the lender to restructure the loan or a repayment plan.  But CALL SOMEONE

•·         Find a professional Illinois REALTOR to help you negotiate with the lender to place the property on the market if selling your home is the option you choose.

•·         PLEASE Avoid foreclosure scams. There are many of them out there...DO NOT SIGN ANYTHING!!!  Protect yourself by working with a HUD-approved counselor, professional REALTOR® and/or an attorney.

•·         You can learn more at any of these sites: http://www.hud.govhttp://www.nw.org, http://www.fha.gov

•·         Foreclosure should be your action of last resort. Remember, a foreclosure will stay on your credit report for up to 10 years and greatly affect your ability to obtain a home loan in the future.

 

Thanks for reading this. Having trouble with your house payment is not something to be ashamed about. You are not alone... Please do not bury your head on the sand...If you work on it early, you may just save your home.

Comments (6)

Vicky Poe
Good Ole Rocky Top - Crossville, TN
Realtor/ Auctioneer
In spite of all the consequences a short sale is better than having a foreclosure.
Dec 30, 2007 11:15 AM
Brian Corwell
RE/MAX Sauk Valley - Sterling, IL
Sterling, Illinois Real Estate

yes it is... the tough part is getting the lender to act fast enough to keep the buyer in place.

 

Dec 30, 2007 11:18 AM
Paul Jerome
Seller Helps Buyer - Clearwater, FL
Great post Brian!  More real estate folks need to be on the front lines educating the public about foreclosure avoidance.
Dec 30, 2007 11:21 AM
Brian Corwell
RE/MAX Sauk Valley - Sterling, IL
Sterling, Illinois Real Estate

Yes...all the we can... I hope that the number of CFK that I have to do this year is lower... It was a difficult year emotionally having to get someoe to move out of their homes for a few lousy bucks... damn ARM rates.

 

 

Dec 30, 2007 11:35 AM
Frank Rizzo
Cornerstone Realty Partners - Staten Island, NY

I have dealt with distressed properties for many years. The most important step for the homeowner is to be proactive. THIS SITUATION WILL NOT GET ANY BETTER BY DOING NOTHING!!! Hoping for a better outcome does not make a better outcome. Many times these homeowners are scared and are too proud to let others know their situation. What many don't realize is that having an agent who is knowledgable of the foreclosure process and can advise them of their options may provide some clarity for what their next step could be. FORECLOSURE DOES NOT HAVE TO MEAN THE END OF OWNERSHIP FOREVER - but taken for what it is, a temporary set back to your ultimate goal - whatever that may be...

 

Dec 30, 2007 12:11 PM
Brian Corwell
RE/MAX Sauk Valley - Sterling, IL
Sterling, Illinois Real Estate

Frank

Good observation...that is what I try to tell everyone I meet that is in that situation. I also added a letter to my follow up campaign telling the buyers the same thing. I have been in this since 1998 and knock on wood I have only had 2 go back...and I tried to help one of them but he was in total denial and lost a home I could have sold and put a few bucks into his pocket.

 

Jan 02, 2008 01:59 AM