Bankruptcy - Know Your Options (part 7)

If you are considering bankruptcy as an option, consult with an attorney that specializes in bankruptcy cases:  www.azbar.org/LegalResources/findspecialist.cfm

Access the Arizona Bankruptcy Court self help information line by calling 1-866-553-0893 or visiting their website at www.azb.uscourts.gov/default.aspx?PID=78#866.

Susan

"...all you need to know about Real Estate"

Foreclosure - Know Your Options (part 6)

Foreclosure:  The legal process by which your lender obtains a termination of your ownership rights to a specific piece of real estate 

vAllowing the lender to foreclose is another option.  The counselors at the Arizona Foreclosure Help Line can explain the foreclosure process, call: 1-877-448-1211

Ultimately, only you and your attorney can determine if a foreclosure is the best option for you.  Attorneys who are State Bar certified specialists can be located at :  www.azbar.org/legalresources/findspecialist.cfm

vHow Does A Foreclosure Affect My Credit? 

§A Foreclosure Will Remain On Your Credit Report For 7 Years:

•Credit Scores typically drop 50-250 points

•If a tax lien is filed your credit score may drop an additional  100 points

vWaiting Period to Buy A New Home:

Fannie Mae & Freddie Mac guidelines state that the waiting period before you can buy another home is 5 years from the date the foreclosure is completed.  Some additional requirements after 5 years and up to 7 years from the completion date may apply including down payment requirements of 10% and

 credit scores of 680 or more.  Purchase of 2nd home or investment property not permitted.  If approved extenuating circumstances, such as loss of employment

, that caused the foreclosure shorten the waiting period to just 3 years.

Susan

"...all you need to know about Realt Estate"

Short Sale - Know Your Options (part 5)

Short Sale:  A Short Sale transaction occurs when your lender is willing to accept a payoff for less than the amount owed

vQualifications That Indicate A Short Sale May Be Right For You:

§Your home’s value has dropped below the amount that is still owed on it

§Your loan is near or already in default status

§Financially you have fallen on hard times ~ Unemployment, Death, Bankruptcy, Medical Emergency, Divorce or Lack of Assets can all constitute hardship

vHow Does A Short Sale Affect My Credit? 

§A Short Sale May Appear On Your Credit Report As:

•Paid Settlement ~ credit scores typically drop 50-150 points

•Paid In Full For Less Than Full Balance ~ credit scores typically drop 50 – 150 points

•Pre-Foreclosure Redemption ~ credit scores may drop as above or remain neutral

vWaiting Period to Buy A New Home:

Fannie Mae & Freddie Mac guidelines state that the waiting period before you can buy another home is 2 years  from the date the short sale transaction is completed.  There are not exceptions for extenuating circumstances.

Susan

"...all you need to know about Real Estate"

Deed In Lieu Of Foreclosure - Know Your Options (part 4)

Deed In-Lieu of Foreclosure:  This is a settlement which is made voluntarily between you and the bank  in which you “give back” your house to the lender and move on with nothing owed.  In most cases your bank will only accept a Deed In-Lieu if there are no other liens on the property or if these liens can be significantly reduced.

vReview the HUD Requirements for a Deed In-Lieu of Foreclosure at:

§www.hud.gov/offices/hsg/sfh/nsc/rep/dilfact.pdf

vHow Does A Deed In-Lieu of Foreclosure Affect My Credit? 

§Negotiate with your lender how they will report a Deed In-Lieu of Foreclosure.  Possibilities are:

•Foreclosure ~ credit scores typically drop 50-250 points

•Paid Settlement ~ credit scores typically drop 50-150 points

•Paid As Agreed ~ credit scores drop due to prior late payments but this option could allow the purchase of another home in a short period of time

vWaiting Period To Buy Another Home:

Fannie Mae & Freddie Mac guidelines state that the waiting period for a Deed In-Lieu of Foreclosure is 2 to 4 years from the date of completion.  Some additional requirements after 4 years and up to 7 years from the completion date may apply including down payment requirements of 10% or more.  Extenuating circumstances, such as loss of employment, that caused the need for you to complete a Deed In-Lieu shorten the waiting period to just 2 years.

Federal Help For Home Owners...Know Your Options (part 3)

If your lender will not agree to a loan workout or modification you may be able to refinance the loan with another lender.

The HOPE for Homeowners Program will refinance mortgages for homeowners that can afford a new loan insured by HUD’s Federal Housing Administration.

Learn more at: www.hud.gov/hopeforhomeowners/index.cfm

Susan

"...all you need to know about Real Estate"

When Facing Foreclosure - Options With Current Lender

vLoan Workout:

§Reinstatement ~ pay the total amount owed by a specific date in exchange for the lender agreeing not to foreclose

§Forbearance ~ An agreement to reduce or suspend payments for a short period of time

§Repayment Plan ~ An agreement to resume making monthly payments with a portion of the past due payments each month until they are caught up

§Claim Advance / Partial Claim ~ If the loan is insured, a homeowner may qualify for an interest-free loan from the mortgage guarantor to bring the account current

vLoan Modification:

§The lender may agreement to change the terms of the original loan to make the payments more affordable.  Loan modification resources include:

•Making Homes Affordable: www.makinghomeaffordable.gov

•National Foreclosure Mitigation Counseling Program: http://findaforeclosurecounselor.org/network/home.asp

•Homeownership Preservation Foundation: www.995hope.org  or toll free at 1-888-995-HOPE

vWork Out Sale:  If you have equity your lender may allow a specific amount of time for the home to be sold and the loan to be paid off in full.  The lender may also allow a buyer to assume the loan to purchase the property even if the loan is non-assumable.

 

Susan

"...all you need to know about Real Estate"

If Facing Foreclosure.....Know Your Options!

For most home owners it is a scary day when their lender delivers a Notice of Trustee's Sale.  Here in Arizona you have a few options on the table....learn about your choices to make the best decision for you and your family.

Consider this blog the beginning of your journey.  While I'm well versed on the real estate aspects of foreclosure you should absolutely consult with an attorney and also a tax advisor before making any final decisions.  I'm always amazed when people tell me they cannot afford the $200 to $500 these consultations may cost....."really, you're dealing with 10s if not 100s of THOUSANDS of dollars"...you can't afford NOT to get this help.

Here's the list of options available....I'll blog more about each one in the coming days.

Options With Your Current Lender:
Loan Workout ~ Loan Modification ~ Work Out Sale

Federal Help For Homeowners (refinance):
HOPE for Homeowners Program

Deed In-Lieu of Foreclosure

Short Sale

Foreclosure

Bankruptcy

If you're facing foreclosure give me a call.  I'll be happy to refer you to some trusted colleagues so that you can get the legal and tax advice you need.

Susan
"...all you need to know about Real Estate"

Why A Blog?

Each day clients, friends and neighbors ask me questions about the housing market.  I'm always happy to share information which led me to creating this blog.  What better way to open a discussion about the ups and downs in the Valley's real estate market. 

Welcome to my blog....I promise to keep the content pertinent to what's happening in today's housing market.  Save the page and let http://northvalleyrealty.blogspot.com/ be all you need to know about real estate!