Currently there are 53,000 foreclosures in So. California, with more coming.
In the 1980's foreclosures were, simply stated, caused by the Savings and loan and other banks failures and closures. In the 1990's foreclosures were caused by the layoffs generated by the defence plants closing due to the end of the 'Cold War', and the ripple effect that caused other business closures or failures. Today the effect will be the result of a combination of the adjustable rates/stated income/100% financing aggravated by the recent closing of several sub prime lending institutions.
Is there hope for these home owners? Yes! NEVER GIVE UP HOPE!
POSSIBILITIES:
Loan Workouts: There are five types of workout options available to the seller
Hard Money Loans: Special circumstances. Use reputable lenders. Max loan to value (LTV) is 65%. Potential appraisal fraud.
For sale by Owners: A 15 year study shows the #1 reason to sell a home yourself is to save commission. The study showed the selling price is 10% lower and falls out of escrow 3 times.
For Sale by Agent: Can be equally dangerous. Agents must have special training to understand Asset Protection, Loan workouts, civil codes, time constraints.
Bankruptcy: Chap 7 Liquidation, Chap 11 Reorganization (for Corporations), Chap 13 Restructure for people.
Tax Consequences: Seek advice of a CPA, because there are income tax consequences and may have Federal income taxes due upon the sale of the home
Market conditions: Listings are usually priced 20 - 30% under market for quick sale. Offer specific language to protest the seller. Knowledge of how to negotiate with a Lender is a must.
The best way for individuals to help themselves at this time is to seek out a Real Estate company that hasa system for Loss Mitigation in place, systems for educating and counseling clients, systems for marketing these homes if that is the final answer.
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