Monday, December 22, 2008

5 Tips to Saving your Home

How to Get Foreclosure Help Today?

5 Tips to Help You Save Your Home!

1.) Learn About Foreclosure
Foreclosure is something that can happen when you get behind on your Mortgage Loan. Foreclosure is a process in which the estate becomes the absolute property of the Lending Institution. Foreclosure is a very serious matter that needs to be handled.

Foreclosure is a legal process by which a lender (sometimes referred to as the “mortgagee”) seeks to collect a debt by taking property that secures the debt. Foreclosure
help is available with most Landers. Check the Internet. Sometimes you can find FREE Foreclosure information.

Learn everything about Foreclosure and save your home.

2.) You Need Help Today!
If you are late with your Mortgage payment, you need Foreclosure Help today.

Foreclosure is a serious situation that has serious repercussions. If you can, you want to avoid Foreclosure as much as possible. The biggest mistake you can make is to do nothing until it is too late! Find Real Estate Forums on the Internet. You can learn from other home owner’s experience with their refinancing or foreclosure process.

3.) Refinance
Refinance your mortgage if you can. Lenders pull your credit, verify employment, and gather a host of other financial information about you, but they aren’t doing it in order to advise you in your purchases and other financial decisions. They’re doing it as a means to assess the risk of lending to you (how much and at what rate). Lenders may approve you more conservatively (that is, for less money) now than they did a few years ago, but there’s no guarantee that they still won’t approve you for more than you can afford. They will do this because (a) it puts more money in their pocket and (b) you’ll sacrifice other things before you let your mortgage payments lapse. Mortgage lenders make money by collecting your principal and interest payments. It is not in their best interest to proceed with a foreclosure. Find a Lender who can help you to avoid Foreclosure.

4.) Find a Loan Modification Program
Sometimes a Loan Modification Program is the best Foreclosure help.
Lenders are more likely to go along if a competent third party is there to help smooth the process. Lenders will sometimes allow a reduced payoff for a Loan if it is obvious a foreclosure is inevitable and a third party purchaser is willing to buy the property at a price lower than the full payoff.

Loan Servicers are used to dealing with mortgage delinquencies related to life events such as unemployment or illness, with the most common approaches being a temporary repayment plan or the folding of missed payments into the principal balance. A widespread decline in home prices, by contrast, is a relatively novel phenomenon, and lenders and servicers will have to develop new and flexible strategies to deal with this issue. Loan Modification allows you to refinance your mortgage loan or even extend the term of your loan. The Lender may settle for monthly mortgage payments that are within your financial means.

5.) Protect Yourself!
Don’t be a victim. When you need Foreclosure Help, make sure you find competent Professional companies to work with! Don’t let anybody scam you! Foreclosure records are public. Scam artists will contact you. Get advice only from Professionals!

Foreclosure isn’t easy, and stopping Foreclosure isn’t easy, but if you are well informed you can keep from losing your home.

Get Foreclosure help before it is to late!

How to avoid foreclosure

(Source: CNNMoney.com)

Here are some ways to cope when you have fallen behind on your mortgage payment.

NEW YORK (CNNMoney.com) -- President Bush signed the housing bill Wednesday. And while the part of the bill that allows homeowners who cannot afford their monthly payments to refinance into government-backed loans may be implemented as soon as October there's been some question as to whether it's going to take longer than that. If you are in danger of foreclosing on your home there are some steps you can take now.

Know the timeline
Once you miss a payment, your lender likely reports that to the credit bureaus.

And with every missed payment, your credit score goes down. Plus, you'll start getting hit with late fees. After 90 to 150 days in most cases, your lender may file a notice of default with a local courthouse. You'll probably get a letter saying the foreclosure process will start, unless you become current on your payments.

If you don't become current, you may have anywhere from 2-3 months to a year before the house is put on the auction block according to David Petrovich, author of Fight Foreclosure.

Get a loan modification
Try to get a loan modification before you even miss a payment. This is probably the least onerous of the options out there, if you can get it. This is basically a change in loan terms. A modification will lower your monthly mortgage payment or let you skip a few payments. Bottom line here is that the term of your loan will be extended.

To request a modification, call your lender and ask to be transferred to the loan modification department. Make sure you have some recent pay stubs, current or prior year W-2 forms, bank statements, property tax bills and insurance bills.

If possible, obtain appraisal information for your home. And the process can be frustrating. It could take weeks. "It's up to you to be proactive, persistent and aggressive, says Petrovich. "Loss-mitigation departments are overwhelmed, under-staffed and under-experienced," he says.

He says lenders will likely devote more attention to your case, the closer you are to having your home sold at auction.

Consider a sale
If you can't afford your mortgage, your best bet is to sell your home. But...if you owe a lot more on your home that it's worth, you may be able to get the lender to accept less than you owe on it by negotiating a short sale.

Basically you sell the house for what you can get and the lender agrees to accept it. In some cases the deficit will be forgiven, but in other cases you may have to sign an unsecured loan for the amount. Negotiating a short sale isn't always easy.

"Lenders are not as receptive to short sales as I thought they would be," says Petrovich. "Lenders are not willing to accept these losses gracefully." You generally have to write a hardship letter, indicating why you can't make the mortgage payments.

The bank usually controls the negotiations and you don't have much say in the process. And keep in mind the process is slow. It can take 4-5 months from the first time you submit your package. You can also do a deed-in-lieu transaction.

With a Deed-in-Lieu transaction, you hand over your deed to the house to your lender. In return you are released from your mortgage. But lenders cannot be forced to accept a deed. In fact, you may have to have tried to do a short sale and failed.

So, having your lender accept a deed-in-lieu can be challenging. We've talked about some alternatives to foreclosure. But sometimes, it's unavoidable. Having a sheriff's sale on your credit report is a black mark you'll want to escape if possible.

If this is inevitable, keep in mind that you can still repair your credit. Typically foreclosures are on your record for seven years. And don't forget that you're not alone. There are millions of families that are going through exactly what you are going through .

Back to Foreclosure Help

Are you at Risk of Foreclosure??

Haven't missed a house payment yet, but afraid you might?

Has your financial situation changed due to a mortgage payment increase, loss of job, divorce, medical expenses, increase in taxes or other reasons?

Is your credit card debt becoming unmanageable?
Are you using your credit cards to buy groceries?
Is it becoming difficult to pay all your monthly bills on time?
If it’s becoming harder to make your house payment each month:

Contact a SOS Home Mitigation counselor, or
Call Toll Free (866) 767-4663 to find a foreclosure counselor near you.

Watch our Tips for Avoiding Foreclosure.

Current mortgage rates lowest in nearly 40 years for Freddie Mac

The Federal Reserve once again slashed the federal funds rate on Tuesday from 1 percent down to .25, “aiming to free up lending and jolt the economy back to life,” according to an Associated Press report.

It’s a dramatic move, which caused Freddie Mac mortgage rates to dip to their lowest level since 1971. In fact, 30-year fixed home loan rates can now be locked-in at a staggering 5.19 percent.

That means that homeowners who are facing “balloon” or Adjustable Rate Mortgage (ARM) rate increases — and there is data out there that indicates this could still impact an alarming amount families very soon — can secure more affordable home loans.

In addition, prospective homebuyers can take advantage of the latest-money saving measure. It’s a great opportunity to more than likely get into a home at a reduced price (depending on the local market) and get a loan at a super low rate.

To search the Foreclosure.com nationwide database of more than 1.8 million distressed real estate listing click here.

This is great news that can put a lot of extra cash back in the pockets of so many people. And the way things are right now it appears that every little bit helps and could go a long way.

Therefore, take advantage of this current situation if you can, whether you are a homeowner or homebuyer. Opportunities like this do not come around very often.

To talk to a mortgage professional to possibly refinance click here: Mortgage Assistance

Tuesday, December 16, 2008

What Is Loss Mitigation?

Loss Mitigation is the art of helping delinquent homeowners, in or close to foreclosure, to save their home and of trying to stop a home foreclosure before it happens. It is an intervention program designed to help homeowners save their homes from foreclosure, through third party negotiations with the lender or investor. Although it seems as though Loss Mitigation is a new concept, it is a process that has been around for many years and can save homeowners and lenders tens of thousands of dollars (as well as a little heartache and time consumption).

Foreclosures and mortgage delinquencies are destroying the "American Dream" and are at an all time high right now and number in the millions. We could be facing the highest foreclosure rates in history and with option ARMs still adjusting, there is no significant ending in sight. Loss Mitigation is the most effective method of avoiding or stopping the foreclosure process which culminates in the sale of the property at a public auction. The goal of Loss Mitigation is to work out an agreement between the homeowner and the lender that will stop the foreclosure proceedings permanently. A truly successful Loss Mitigation workup will take the homeowners future ability to pay into account as well as their past arrears so that the homeowner does not get themselves into default again.

Homeowners are losing their homes at record rates with no end in sight. They often believe the answer to their prayers is refinancing their home and getting away from their current lender. However, they need to be very careful if they are relying on refinancing as the way to save their home from foreclosure. By the time their properties have gotten into default, they have missed at least 2 months of mortgage payments. Not paying a mortgage for 2 months or more is detrimental to a credit score and thus, they cannot qualify for refinancing the loan. The only viable option for most of these homeowners is Loss Mitigation.

Loss Mitigation is a process in which lenders help borrowers that are in danger of default, avoid foreclosure. Every homeowner's situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Before a foreclosure or bankruptcy occurs after a one or two months default, a repayment plan may be proposed to the delinquent mortgage holder by a Loss Mitigation specialist to satisfy the amount owed to a bank or lender. Many banks and lenders want to avoid the foreclosure process since, on average; both homeowner and lender stand to lose tens of thousands of dollars. Lenders ultimately want to keep the home owner in their home and it is up to the home owner to show that they will be able to catch up or maintain the mortgage payment in the future. Borrowers must be encouraged to retain home ownership through scenarios that provide the borrower and lender/servicer with an optimal outcome. Often with the home owner they get stonewalled at the first level, and sadly the first tier in Loss Mitigation is really a glorified collections department. By hiring a third party Loss Mitigation negotiation company, the homeowner's best interests can be fought for. In reality, a Loss Mitigation workup is in the lenders best interest as well taking into account the amount of money they stand to lose during the foreclosure process.

Loss Mitigation is the art of negotiating, on behalf of the homeowner, with the lender (or investor), stopping the foreclosure process, and coming to a settlement. Loss mitigation is often the better choice for the homeowner that is trying to save their home from foreclosure. When Loss Mitigation isn't a viable solution, other options are available to create win-win strategies with the homeowner and can be employed to help the homeowner avoid the foreclosure (possibly avoiding bankruptcy and 10 years of bad credit).

Chris Taylor is a Certified Loss Mitigation Consultant and mortgage broker in Denver, Colorado. He works primarily toward helping homeowners keep their home from foreclosure and to help first time homeowners purchase their very first home by using rent to own and owner financing techniques. To find out more information about Chris Taylor and what he is doing to help others stay in their home, check out his website http://www.866soshome.com/ or call him at 866-767-4663

More on Loss Mitigation

Back to Foreclosure Info

Mortgage Loan Modification - HOW TO's

(Source: Ron Stephens)

These are incredibly challenging times for American homeowners. More people than ever before are considering mortgage loan modification as an alternative to the possibility of losing their homes. The need for banks to consider loan modifications for homeowners has come about because of various reasons:

  • Adjustable rate mortgages that have adjusted up and increased monthly mortgage payments beyond their ability to pay.
  • Some homeowners took out adjustable rate mortgages, expecting to refinance at a better rate later, only to find their home's diminished value won't support a sufficient loan amount to qualify for refinance, and therefore they can not take advantage of new lower rates.
  • Many have lost their jobs, some having worked for the same company for many years, and now can't afford their payment.
  • Retirement income that would have helped pay off the mortgage, lost in the stock market crash.

If any of these situations describe you, there is hope. Because of the tremendous number of people facing foreclosure, banks are more willing than ever to work with homeowners in several ways. They know that the epidemic proportions of distressed homeowners, has created a bigger challenge than foreclosing the loans of so many people who are in default, can overcome. Here are some possibilities for you if you need answers:

Short refinance: Your lender may be willing to lower the balance on your home mortgage, create a new loan at the lowered amount, and thus give you a lower payment.
Short Sale: If you just need to get out of your house, your lender may be willing to let you sell the home to another party, for an amount that is less than what you owe, and forgive you of the difference.
Loan Modification: Your lender may restructure your loan, add any late payments to the balance, create a new loan amount with new parameters.

Whichever one of these options that your bank may be willing to consider, depends on your personal standing with them, and your financial situation. Here are some things that you must do if you want your bank to consider a mortgage loan modification on your behalf:

Communicate with them early on...DO NOT avoid talking to them about your hardship.
Keep a proper perspective...They are not the enemy. You owe them the money, having borrowed it with the promise to pay it back. Don't get angry with them for your difficulty. Respect them, and you have a better chance of them working with you.

Ask them for help. If the person you talk to is not willing to help you, keep calling and asking for a supervisor until you get someone who will listen and try to help.

Consider enlisting the help of a professional "loan mitigation service". You may have to pay a small fee, but these people are very good at what they do. They have the know how and the resources, and the credibility that will get your bank's attention and cause them to be more willing to work with you.

The bottom line is: banks are more willing than ever to enter into mortgage loss mitigation with their customers. And if you do enough research, and you are patient and stick to the process of filling out many forms and making many phone calls, and being put on hold for long periods of time, you may be able to get a mortgage loan modification, and save your home and your credit.

If the thought of doing all of that causes you to break out in a cold sweat, and feel like giving up before you even start, than you should consider a loan mitigation specialist. They are available online, in the yellow pages, or you may be able to get a good one referred to you by a realtor or mortgage broker.

What is Loss Mitigation?

Back to Foreclosure Information

Thursday, December 4, 2008

Mortgage applications surge by record

FDIC's Bair: Hopeful for her mortgage plan

written by: Ronald D. Orol, Market Watch Dec. 2, 2008

WASHINGTON (MarketWatch) -- Federal Deposit Insurance Corporation chairwoman Sheila Bair said Tuesday she hopes the Obama administration will support a mortgage foreclosure mitigation plan she introduced last month.

"We're encouraged by the president-elect statement on foreclosure prevention," Bair said at a conference in Washington. "I'm hopeful that the future administration will find funding to launch it because we are behind the curve and falling behind every day."

Bair is seeking $24.4 billion of the federal government's $700 billion Troubled Asset Relief Program to modify loans. She argues that such a package is authorized under the Emergency Economic Stabilization Act approved by Congress and the Bush administration on Oct. 3, and contends the program could avert 1.5 million foreclosures while encouraging lending by mortgage servicers.

Bair expressed disappointment that Treasury Secretary Henry Paulson hasn't agreed to allocate TARP funds for the package, but she still was hopeful that he would implement it. "I don't know that he said he would oppose it," Bair said. "Paulson has said he thinks it's a good program but he doesn't want to fund it with TARP funds, but we think the authority is there under the statute."

On Monday, Paulson said he could support a new approach to mortgage foreclosure mitigation, but he didn't go so far as to back Bair's proposal. "We are continuing to examine potential foreclosure mitigation ideas that may be an appropriate and effective use of TARP resources," Paulson said. "We're continuing to work on it."

Paulson had previously expressed opposition to Bair's proposal, but his comments on Monday indicate he might be willing to change his mind. House Financial Services Committee chairman Barney Frank said last month that he continues to have discussions with Paulson on the Bair proposal.

Some regulatory observers speculated Paulson could authorize $2 billion of the funds made available by Congress as part of the Emergency Economic Stabilization Act passed Oct. 3 to implement the first part of Bair's program. Those securities would be used to pay an upfront servicer administration fee of $1000 for 2 million loans.

Bair is seeking to use another $22.4 billion as part of a loss sharing program between mortgage servicers or investors and the FDIC for loans that fail six months or longer after being modified.

Ronald D. Orol is a MarketWatch reporter, based in Washington.

Wednesday, November 19, 2008

Paulson: Bait and Switch

By: Chris Taylor, Foreclosure Specialist

Once again your government who lobbied for you to support the bailout has lied again.

Secretary Paulson, whose net worth has almost doubled to 750 million is siding with the other industry leaders (Bank CEO's, lobbyist, etc) and has clearly stated that if you are in trouble with your lender, FEND FOR YOUR SELF!

The current system, which rewards the failing banking system by paying huge bonus's at the tax payer's expense is turning their back on the consumer. Currently,banks are pursuing foreclosure activity and opting to discontinue to loan modification programs because they believe the re-default rate is too high and that loan modifications don’t work.

Paulson has stated over the last two weeks that the treasury has decided to abandon the acquisition of troubled assets in exchange for buying bank stock. Paulson believes that if the government buys bank stock that it will shore up the bank’s balance sheet, thus unlocking the credit markets. The banks will be better stewards of T.A.R.P. (Troubled Asset Relief Program aka: Bank Welfare program) than the homeowner in foreclosure.

Banks are actually tightening credit standards , and freezing current credit lines.. They are taking a conservative approach to the management and extension of credit because they believe credit performance will continue to decline

Imploding Economy

It doesn't take a Harvard educated economist specializing in the Great Depression to understand that if spending continues to decline, unemployment will increase. If unemployment increases loan losses will also increase. A bank will not continue to lend in this kind of economic environment when they know that the default rate is increasing. This is why we are seeing banks increase their rates on credit card portfolios. This trend will continue thus adding to the trend of limiting access to affordable credit in the market.

Let’s review the most recent events to support this claim:

* Citibank increased rates on their credit card portfolios by 3%. (they are also cutting 53,000 jobs)
* Circuit City to close 20% of all stores causing thousands to be let go
* Lowes Stores report 25% reduction in sales
* Intel reports unexpected decline in sales and cannot predict the future of microchip sales and 3,000 job cuts
*Dupont, 30% decline in sales
*State budgets are all being reduced and taxes are being raised

These results demonstrate the power of the American consumer and if we don’t support from the ground up the problems will continue.

Loan Modifications, and special loan programs insured by the Federal Government need to be implemented immediately. These programs should be available to all current homeowners current and delinquent. These changes will begin the flow of money into the economy that will stop the hemaraging and begin the healing of the economy.

Please let your local congressman know your concerns about why the government is taking the wrong direction.

In our economy will continue to fall for the 10% of homeowners in distress. This lack of spending is causing major job reductions around the world. Imagine if this number increases to 15% -20%? Where will unemployment be then Mr. Paulson? We will be happy to know that the banks will be well capitalized, hoarding their money and not putting it to use.

For the rest of us little people we can only hope that the incoming administration and congress will actually work for the people.

Tuesday, November 18, 2008

Friday, November 14, 2008

FDIC plan expands efforts on foreclosures

(November 13th, 2008 - The Denver Post)

WASHINGTON — Officials at the Federal Deposit Insurance Corp. on Thursday detailed a plan to prevent 1.5 million foreclosures in the next year by offering financial incentives to companies that agree to sharply reduce monthly payments on mortgage loans.

The proposal, which has the support of leading congressional Democrats, would considerably expand the scope and force of efforts to stem foreclosures. Agency officials estimated the cost to the government at $22.4 billion.

FDIC Chairman Sheila Bair continues to face opposition within the Bush administration. Treasury Secretary Henry Paulson said Wednesday that he opposed funding the plan from the government's $700 billion rescue fund. But proponents increasingly view the Bush administration as a roadblock with an expiration date.

The FDIC proposal, which is to be announced today, goes further toward helping borrowers than existing modification efforts. And, the initiative is designed to be less expensive for mortgage companies because the government will pick up part of the tab. The Washington Post

Back to Avoiding Foreclosure Tips

Thursday, November 13, 2008

California Foreclosure Laws

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: Yes

- Primary Security Instruments: Deed of Trust, Mortgage

- Timeline: Typically 120 days

- Right of Redemption: Varies

- Deficiency Judgments Allowed: Varies

In California, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process for California foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Using this type of foreclosure process, lenders may seek a deficiency judgment and under certain circumstances, the borrower may have up to one (1) year to redeem the property.

Non-Judicial Foreclosure


The non-judicial process for California foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A notice of sale must be:
1) recorded in the county where the property is located at least fourteen (14) days prior to the sale;
2) mailed by certified, return receipt requested, to the borrower at least twenty (20) days before the sale;
3) posted on the property itself at least twenty (20) days before the sale; and
4) posted in one (1) public place in the county where the property is to be sold.

The notice of sale must contain the time and location of the California foreclosure sale, as well as the property address, the trustee's name, address and phone number and a statement that the property will be sold at auction.

The borrower has up until five days before the foreclosure sale to cure the default and stop the process.

The sale may be held on any business day between the hours of 9:00 am and 5:00 pm and must take place at the location specified in the notice of sale. The trustee may require proof of the bidders ability to pay their full bid amount. Anyone may bid at the sale, which must be made at public auction to the highest bidder. If necessary, the sale may be postponed by announcement at the time and location of the original foreclosure sale.

Lenders may not seek a deficiency judgment after a non-judicial foreclosure sale and the borrower has no rights of redemption.

Nevada Foreclosure Laws

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: Yes

- Primary Security Instruments: Deed of Trust, Mortgage

- Timeline: Typically 120 days

- Right of Redemption: Yes

- Deficiency Judgments Allowed: Yes

In Nevada, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process for Nevada foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

The borrower has one year (12 months) after the foreclosure sale to redeem the property if the judicial foreclosure process is used.

Non-Judicial Foreclosure

Information taken from: www.foreclosurelaw.org

The non-judicial process for Nevada foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A copy of the notice of default and election to sell must be mailed certified, return receipt requested, to the borrower, at their last known address, on the date the notice is recorded in the county where the property is located. Any additional postings and advertisements must be done in the same manner as for an execution sale in Nevada.

Beginning on the day after the notice of default and election was recorded with the county and mailed to the borrower, the borrower has anywhere from fifteen (15) to thirty five (35) days to cure the default by paying the delinquent amount on the loan. The actual amount of time given is dependent on the date of the original deed of trust.

The owner of the property may stop the foreclosure proceedings by filing an "Intent to Cure" with the Public Trustee's office at least fifteen (15) days prior to the foreclosure sale and then paying the necessary amount to bring the loan current by noon the day before the foreclosure sale is scheduled.

The foreclosure sale itself will be held at the place, the time and on the date stated in the notice of default and election and must be conducted in the same manner as for an execution sale of real property.

Lenders have three (3) months after the sale to try and obtain a deficiency judgment. Borrowers have no rights of redemption.

Thursday, November 6, 2008

Florida Foreclosure Laws

Information taken from: www.foreclosurelaw.org

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: No

- Primary Security Instruments: Mortgage

- Timeline: Typically 180 days

- Right of Redemption: Yes

- Deficiency Judgments Allowed: Yes

In Florida, all mortgages are foreclosed in equity. In a mortgage foreclosure action, the court severs, for separate trial, all counterclaims against the foreclosing lender. The foreclosure claim shall, if tried, be tried to the court without a jury. The court order of foreclosure will specify how the foreclosure must take place, and the Florida foreclosure must take place on those terms. Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is required to be placed in a newspaper, it is the responsibility of the lender or their representative to place such advertisement, publication, or notice.

Equitable Right of Redemption ends at the foreclosure sale (or at another time specified by the courts, but this rarely happens). There is a period of time after the sale that "the court reviews the sale to ensure a fair price has been paid." Basically, this period of time allows parties to object to the sale on the basis that proper procedures were not followed or collusion existed between the bidders, for example. This period is usually 10 days, after which the Certificate of Sale is filed and title passes, if the sale is confirmed. If the sale is not confirmed, another sale is ordered. (Reference F.S. Chapter 702)The lender may sue to obtain a deficiency judgment in Florida.

Ariozona Foreclosure Laws

- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Typically 90 Days
- Right of Redemption: none
- - Deficiency Judgments Allowed: Varies

In Arizona, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process of foreclosure in Arizona, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure in Arizona is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

The trustee must record a notice of sale in the office of the recorder of the county where the property is located. Within five (5) days after the notice is recorded, the trustee must mail, by certified mail, a copy of the notice of sale to each of the people who are parties to the trust deed, except for himself. Additionally, the notice must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the last notice being published not less than ten (10) days prior to the date of the sale.

Optionally, if it can be done without a breach of the peace, the trustee can post the notice at least twenty (20) days prior to the date of the sale, in some conspicuous place on the property to be sold and/or he or she can post the notice at the courthouse or at a specified place at the place of business of the trustee in the county in which the property is located.

The trustee or the trustee’s agent must conduct the sale. The sale is for cash to the highest bidder, except that the lender can make a "credit bid," which means to cancel out some part (or all) of the money the borrower owed the lender on the lean, instead of paying cash. A successful high bidder must pay the bid price by 5 pm of the day after the bid, other than a Saturday or legal holiday. Every bid is an irrevocable offer until the sale is completed, which happens when the bidder pays the bid price to the trustee’s satisfaction. If the high bidder fails to make the payment by 5:00 pm, the day after being notified of the option to buy, then the trustee may postpone the sale.

The trustee may postpone the sale to another time, or another place, by giving notice of the new date, time and place by public declaration at the last place and time the property was offered for sale. No other notice is required. A trustee may also, by written agreement, extend the time for a buyer to come up with the payment.

Once the sale is complete, the proceeds will go to the payment of the obligations secured by the deed of trust that was foreclosed, then to junior lien holders in order of their priority. The successful bidder gets a trustee’s deed, which provides conclusive evidence that the trustee conducted the foreclosure sale property.

A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. However, in foreclosures against other types of property, a deficiency suit is allowed, but is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within ninety (90) days of the power of sale foreclosure.

Sunday, November 2, 2008

Colorado Foreclosure Law Summary

Information gathered from: http://www.foreclosurelaw.org/

- Judicial Foreclosure Available: Yes

- Non-Judicial Foreclosure Available: Yes

- Primary Security Instruments: Deed of Trust, Mortgage

- Timeline: Typically four months

- Right of Redemption: Yes

- Deficiency Judgments Allowed: Yes
(In Colorado, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. )

Judicial Foreclosure

The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

The Colorado foreclosure process is quite a bit different than in other states because here, the governor appoints a "Public Trustee" for each county in the state. The trustee must act as an impartial party when handling a power of sale foreclosure. In Colorado, the non-judicial power of sale foreclosure is carried out as follows:

The process begins when the attorney representing the lender files the required documents with the Office of the Public Trustee of the county where the property is located. The Public Trustee then files a "Notice of Election and Demand" with the county clerk and recorder of the county. Once recorded, the notice must be published in a newspaper of general circulation within the county where the property is located for a period of five (5) consecutive weeks.

The Public Trustee must also mail, within ten (10) days after the publication of the notice of election and demand for sale, a copy of the same and a notice of sale as published in the newspaper, to the borrower and any owner or claimant of record, at the address given in the recorded instrument. The Public Trustee must also mail, at lease twenty-one (21) days before the foreclosure sale, a notice to the borrower describing how to redeem the property.

The owner of the property may stop the foreclosure proceedings by filing an "Intent to Cure" with the Public Trustee's office at least fifteen (15) days prior to the foreclosure sale and then paying the necessary amount to bring the loan current by noon the day
before the foreclosure sale is scheduled.

The foreclosure sale must take place between forty-five (45) and sixty (60) days after the recording of the election and demand for sale with the county clerk and recorder. The Public Trustee may hold the sale at any entrance to the courthouse, unless other provisions were made in the deed of trust.

The lender has the option to file a suit for deficiency in Colorado and the borrower has up to seventy five (75) days after the sale to redeem the property by paying the foreclosure sale amount, plus interest.

Monday, October 27, 2008

Foreclosure Myths

Myth: The bank wants your house
Truth: The bank almost never wants your house, they want the money they lent you paid back with interest. In fact, banks usually hate going through the foreclosure process and will bend over backwards to work with homeowners in avoiding a foreclosure. Often the bank's flexibility still doesn't go far enough in stopping the home foreclosure. Never confuse that with the bank "wanting" your house. Treating the bank with contempt or completely avoiding them because you think they "want" your house may only serve to hasten the result that neither of you want, that they "get" your house.

Myth: The bank will not take my payments, I can do nothing else
Truth: At some point many banks say if you do not pay all of your arrears in full they will not accept a partial payment. Maybe a month later you get that figure together only to find the bank sends it back because another month has gone by and now the "all or nothing" requirement has grown. Do not fear! If you and the bank can not get together on a solution for stopping foreclosure a mortgage negotiation professional can set up a plan for you to pay just a portion of the arrears now if along with the partial mortgage arrears payments you set a plan to pay future current payments and catch up on the remaining arrears over time, sometimes months, sometimes the life of the balance of the loan or extending the loan. The foreclosure process stops and as long as you stick to the plan you keep the home. Don't miss a payment under the new plan or the foreclosure process can pick up where it left off and banks rarely give second chances with this type of plan for avoiding foreclosure. If this fails you may still have the option of a Chapter 13 bankruptcy to save the house from foreclosure. Don't forget when the bank stops accepting your mortgage payments do not spend all your money elsewhere, you will need it to save the house. Read more on this at "Who to pay when you can't pay everyone".

Myth: I received a foreclosure notice; I have to move out now
Truth: Most states have a very long foreclosure process, even after failure avoiding foreclosure you do not have to move. Following a foreclosure you must go through an eviction hearing. Eventually you will be physically removed. I'm not suggesting you hold out until the end, but making sure you know you get to stay and fight if you want. Time can be on your side if you take action early and don't waste the opportunities for stopping the house foreclosure.

Myth: I'm in foreclosure, no bank will refinance me out of this foreclosure
Truth: If you have enough equity in your home, typically 60%-70%, specialty lenders will refinance the house to pay off the old bank and stop the foreclosure.

Myth: If I go through a foreclosure I can never buy a house again
Truth: From a banking point of view foreclosures can be viewed as one of the worst things ever on a credit report. Even so, some banks will make you a loan very soon after a foreclosure. Be prepared for very large down payments and high interest rates. Most often the terms of these loans prevent people from buying another house not that funding does not exist. In time provided you work hard to rebuild your credit you can go to a bank almost as if the foreclosure never happened, although expect that may take 4-7 years. Click here for an article about bad credit mortgages or applications for loans after foreclosure.

Myth: On the foreclosure auction day everyone in the world is going to invade my house
Truth: While some foreclosure sales may be held "at" the property no one will come inside unless you invite them.

Myth: A chapter 7 bankruptcy will stop my foreclosure and save the house
Truth: A chapter 7 bankruptcy will stop the home foreclosure on a temporary basis only. Eventually you need to do something else to keep the house in the long run if you are facing foreclosure.

Myth: Homeowners can come up with all sorts of creative ideas for stopping home foreclosure and the bank will go along with the smart plans
Truth: Bank's organizations in most cases involve complex bureaucracies and specific procedures. Most times the smartest plans remain destined for rejection. Stick to a plan within formats and parameters the bank works with everyday for avoiding foreclosure, get a professional to help you if needed.

Myth: Even if I get together all of the money I owe the bank once I'm deep into the foreclosure process it's too late
Truth:
In most states if you have all of the money you owe the bank for back payments and legal fees, late fees etc, they have to take it and stop the foreclosure. It is not their choice it is the law, but where it applies you need to catch up "in full".

Myth: I'm getting foreclosed on and I'm going to go to jail
Truth: You may lose your house, but you don't go to jail for not paying the mortgage.

Myth: I have to do everything I can to save the house and continue to live in it
Truth: Sometimes people need to move on or in some cases they just hate the house and have have no desire to save it. The whole foreclosure procedure can be avoided with a "deed in lieu of foreclosure" negotiation where you and the bank agree to the terms for giving the house back to them in a less adversarial manner. In exchange they may forgive some of the money you owe and you'll have less heart ache. They agree to stopping the foreclsoure and you both walk away.

Myth: When the bank takes the house our dealings are done, they got the house back
Truth: In many states if the house sells for less than you owe them even after the foreclosure you will still owe them the amount of the "deficiency", meaning the difference between what they got and what you owed. They can still get interest on that too. If you think you will face a deficiency you should think harder about a deed in lieu of foreclosure where they will forgive it or a chapter 7 bankruptcy where it can be wiped out. See a chapter 7 bankruptcy attorney in your state if you have questions. Even in a deed in lieu of foreclosure situation you may still owe a deficiency unless you make sure as a part of the deed in lieu of foreclsoure negotiation that you do not.

Myth: I have not paid my mortgage in months and no one has contacted me. I think I can stay here forever and not pay anything
Truth: Sometimes, especially when banks or loans change hands, files get misplaced or there is a transition period where nothing happens. Eventually you will hear from the bank. You can not be successful stopping foreclsoure by avoiding the mortgage problems.

Myth: The bank can't expect ME to pay THEIR legal fees
Truth:
Oh, yes they do, and you will if you want to keep the house. Look in your mortgage documents, it's very clear. Don't expect it to be cheap either $2000-$5000 can be common.

Myth: When a judge hears my sad tale they will not kick me out
Truth: You may get more time, but you will only be stopping the action for a while, eventually you will go.

Myth: Once the foreclosure sale happens you can never get the house back
Truth: Sometimes this one is true, but in some states people have "redemption" rights where they can keep the house if they can pay the bank off in full, principal and arrears, within a limited time period. In other cases you can still buy it back after the foreclosure, but that remains a rare case.

Myth: The foreclosure date is too close, there is nothing I can do
Truth: Sometimes minutes before the foreclosure sale a Chapter 13 bankruptcy will stop the auction. Don't wait for things too get this close, but I have seen it done. You will be better served to have things prepared with a lawyer at least a week or two prior to the foreclosure date.

Myth: If I file a chapter 13 bankruptcy I get to keep the house automatically no matter what
Truth: If you file a chapter 13 bankruptcy AND you have a chapter 13 approved by the court AND you make ALL of the payments under the plan you can keep the house. Read more about Chapter 13 bankruptcy or finding a chapter 13 lawyer near you by clicking here.
Myth: When they foreclose on my house they take all my stuffTruth: You keep your personal property, but permanent attachments to the house should stay like light fixtures or a dish washer. Sometimes it gets tricky, but unless there is something of great value the bank expected was there and it is gone after the foreclosure it is rarely an issue. Don't turn it into an issue by taking everything including wall to wall carpets and radiators and toilets, which would insure trouble.

Myth: The bank messed up one of my payments and I have proof! They can't kick me out, in fact, I want to sue them and I'm going to collect big
Truth: People often focus on the wrong things, waste time and lose the main objective while focusing on the trivial details. If you owe the bank $10,000 and they say you owe them $10,500 even if you are right a $500 error will not mean anything in terms of a judge stopping the foreclosure or award significant money to you. Concentrate on stopping foreclosure by dealing with the $10,000 you admit you owe and deal with the $500 error as a secondary subject.

Myth: No one can help me in stopping my home foreclosure
Truth: Many methods and many professionals can help avoiding foreclsoure. Click here for an interactive form for help decide which method of stopping foreclosure fits your own personal home foreclosure situation.

Wednesday, October 22, 2008

Lenders Help More Homeowners Avoid Foreclosure

By Chris Taylor

The deep economic crisis has more lenders willing to change mortgages or repayment schedules for homeowners at risk of default, to stem their potential losses from foreclosures.

More than 3 million U.S. homeowners have received — or are expected to receive — more affordable loans through ongoing programs initiated over the last 15 months. But even outside the formal programs, says David Kittle, chairman-elect of the Mortgage Bankers Association, lenders are more willing now than a few months ago to agree to changes in monthly payments. In some areas that have a high number of subprime loans or foreclosures, he says, some lenders are even going door-to-door to contact homeowners.

"There's really no reluctance anymore," Kittle said. "Lenders lose $40,000 to $50,000 on every loan that goes into foreclosure."

Kathleen Day of consumer advocate Center for Responsible Lending says even with banks more willing to make modifications, additional help is needed. She also said door-to-door contact with late borrowers may be little more than a public relations ploy.

Some lenders had been reluctant to do loan work-outs because they may hold a large number of risky loans, and modifications carry their own costs to banks. Others simply lacked the staffing or internal programs for systematic loan reviews.

Signs of the shift:
• Mortgage servicers have modified existing mortgages or agreed to easier repayment plans, allowing 2.26 million homeowners to avoid foreclosure since July 2007, according to Hope Now, a private sector alliance of mortgage servicers, counselors and investors.
• As many as 400,000 homeowners may avoid foreclosure over the next three years under a program that started Oct. 1 through the Federal Housing Administration. The program, authorized by Congress in July, allows qualifying homeowners to refinance loans into a 30-year, fixed rate. The mortgage must have originated on or before Jan. 1, 2008.
•Nearly 400,000 homeowners will be able to get more affordable loans under an agreement this month by Bank of America with a number of state attorneys general to modify mortgages originated by Countrywide Financial, now owned by the bank.
Despite banks' forbearance, foreclosure filings are rising, according to the most recent reports. Foreclosure activity increased 12% in August from July and 27% from August 2007, according to industry watcher RealtyTrac. Last year saw 2.2 million foreclosure filings.

Bailout Bill May Help Borrowers

Homeowners at risk of foreclosure may benefit from provisions in the bailout bill designed to modify their mortgages.

The National Association of Realtors said it's pleased with many of the provisions in the revised "Rescue Package" because not only does it help troubled borrowers, but fewer foreclosures will help stimulate many housing markets that have been sagging for the past year.

As of right now it's not been determined which loans will be modified, but many supporters of the provision are hoping that a quick and efficient system is put into place in order to determine loan modification criteria on a large scale, rather than work on each loan case by case.

The plan requires the government to come up with a system to modify loans it acquires through the bailout plan. Changes might be multifarious: lengthening the loan, reducing interest rates or writing down some principal.

Also, borrowers who live in the home and whose loans meet certain criteria, can go into the "Hope for Homeowners" program that was setup during the last housing bill signed into law in July. This program provides the borrower to refinance into a fixed rate loan through the Federal Housing Administration.

The largest problem that still looms deals with the loans the government acquires that are packaged in securities and are no longer held by the originator of the loan, but a servicer. Not a great deal is known, lenders, servicers, and owners of distressed assets are waiting to find out more details as to how to solve the problem and what role the tax payers will play with respect to losses.

Overall, borrowers should engage with their lender, communicate on a regular basis as to their "current status". If the borrower doesn't have time to do this it would be in their best interest to contact a Loss Mitigation company. They can spend the time to reach and inform the lender as to their status. A Loss Mitigation specialist will help negotiate your interest rate with your lender and help you save your home.

Monday, October 20, 2008

American Foreclosure Specialists

We know what you're feeling. You've had more than your share of difficulties the last few months. The good news is that you are not alone. American Foreclosure Specialists can help. We understand that good people sometimes need a second chance. Most foreclosures are a result of an unexpected life event, such as:
  • Death in the Family
  • Difficult and costly Divorce
  • Lost a job or had to Change Jobs
Health problems with Expensive Medical Bills Maybe you're struggling with increased utility prices or fuel expenses or an adjustable rate mortgage (ARM) that is unbearable. Maybe you've already had to file bankruptcy or get a forbearance and the repayment plan is not working out. Maybe this is all a big mistake and the payments you've been sending were rerouted or lost because your mortgage has been sold or traded. Let us help you get back on track.

When Good People Need A Second Chance
Whatever the difficulty, we understand how it feels to choose between a mortgage payment or groceries. We understand what it's like to have continual phone calls from your lender ... calls at home, calls at work and letters in the mailbox.

You need to save your home but your Denver lender is asking for too much money. You're not asking for them to forgive the loan but you need help creating a payment plan that you can handle. You just need someone on your side to negotiate with your lender to get you back on track.

We have caring people who want to help you save your home and get you back to where you need to be. We want to help you get back in charge of your finances. Fore foreclosure assistance, contact SOS Home Mitigation today! (866) 767-4663

Friday, October 17, 2008

Foreclosure: Don't start packing your bags yet!

By: Chris Taylor
Foreclosure, one of the most difficult time anyone can endure. All one can think about is where am I going to live. Many people are falling behind on their loans. The main reasons are as follows: Loss of income and rising expenses. Loss of income can really be attributed to recent unemployment data, companies cutting back on overtime, and bonus income. Injuries, death and divorce are also common characteristics involved when a borrower cannot meet their mortgage payment.

Rising expenses, people have seen their fuel costs double, groceries and other staples increase throughout the recent years. We are seeing the mortgage payment actually increase by as much as 50%. Overall financial stress is bearing down on the homeowner and there is nowhere to turn to for help, until now.

Loss Mitigation or Loan Modification is where the borrower and lender come to a common solution to prevent foreclosure. The borrower can’t get a loan so why not work out a deal with their existing lender. We see borrowers who are current to one year behind on their mortgage. Good news is all of them are still in their house and working on a better situation than they are currently in. Many customers have their bags packed by the time we talk with them. We tell them to unpack and hunker down.

Borrowers usually have more options than they think to maintain homeownership, find out now what options are available to you.

Wednesday, October 15, 2008

Where to Turn for Foreclosure Assistance

Where to Turn for Foreclosure Assistance

Facing foreclosure can be a scary thing and most people do not know where to turn when it comes to foreclosure assistance.

It’s funny because the least likely place to look for foreclosure assistance is actually the first place you should look. The first thing you need to do is call your mortgage lender. Despite the popular belief, mortgage lenders do not want to posess your home. They are not in the real estate business and it costs them a lot of time and money not only to foreclose, but to sell the house after they acquire it in a foreclosure. No, mortgage lenders do not want your home, what they really want is their loans paid.

The reason you call your Denver mortgage lender first when you need help stopping foreclosure is that your mortgage lender holds your mortgage and may have several ways to assist you. Your Denver lender can decide to let you have more time to pay, agree to modify or change your mortgage payment terms, etc. Most mortgage lenders in Denver will work with you, but there is not requirement that they do that. Some of the lenders out there will not work with you for whatever reason. So you call your mortgage lender first to see if they can help you stop or avoid foreclosure.

Another source to look for foreclosure assistance is to check with several lawyers in your area. The reason for checking with several lawyers is that some lawyers are more helpful than others. And their fees will vary, some charge more than others. You will probably want to talk with a bankruptcy lawyer because bankruptcy lawyers deal with matters of stopping debt collection. A Denver lawyer can tell you your legal rights as well as explain to you the complete foreclosure process.

A third place to look for foreclosure help is the internet. However, you need to be careful. We have seen a number of websites claiming to be stop foreclosure specialists. I do not know of any government or private organization that certifies stop foreclosure specialists. I have also seen websites that claim to tell you the foreclosure law for your state. I know for a fact that some sites have not completely stated my state's foreclosure law and that by being incomplete, they may mislead website viewers. A lot of the information on the internet is good information, but you need to be careful. "If it sounds to good to be true, it probably isn't true".

Whether you look locally or on the internet for assistance in stopping foreclosure help, check several sources use your best judgment as to what is true and what is not true, and be sure of what the fees are before you have any individual or company take any action on your behalf. Be suspect of any individual or company that will not tell you up front what they can do for you to stop or avoid foreclosure.

It is important that you realize that you may have several options to stop or avoid foreclosure, but that not every option will work in every situation.

5 ways to Acquire Foreclosures

By Chris Taylor
In general, there are five basic ways to acquire foreclosures at discounted prices. All but one of them permit the buyer to pay for qualified assistance from other sources (such as a title and / or escrow company. Unfortunately, the most popular technique (buying properties at the trustee's sales) allows no such luxury. The purchasing process at the trustee's sale requires each buyer to make his own thorough investigation of both title and debt on the chosen property within a limited time frame.

Delinquent Seller
The first and simplest way to buy properties under the fair market value arises when the delinquent (not defaulted) owner is uncovered. The delinquent buyer will not have made recent payments of principal, interest, taxes or insurance and / or may have reduced the value of the property through benign negligence or lack of funds. When the delinquent owner realizes that he will be unable to meet the commitments on promissory notes and trust deeds for an extended period, he may choose to sell his property even at a discounted price rather than proceed through the foreclosure process. The wise buyer will point out to the delinquent (and later defaulted) owner how he will be harmed by proceeding through the brief foreclosure process to the trustee's sale. At that point, the owner will lose his property, lose his equity, reduce his credit standing as a result of the recorded foreclosure and may have taxable income due the IRS for the amount of the debt reduction (elimination of the trust deed debt) resulting from the trustee's sale. Selling to an interested buyer at a discounted price may well be the most convenient solution for the troubled, delinquent owner.

Defaulted Seller
The property owner becomes a defaulted owner when the trustee for the beneficiary records a Notice of Default. During the following three month plus three week periods, a Notice of Trustee's Sale also will be recorded and published in a local adjudicated newspaper once a week for three weeks just prior to the trustee's sale. Live-in buyers of the property of the defaulted owner may negotiate any reasonable purchase price and terms for the property with the defaulted owner. Investors who seek to purchase the primary residence of a defaulted owner of one to four units and who are not related to that owner must work with the equity seller under the restrictions of two California Civil Codes which can make such purchases more difficult. These restrictions require the use of a special contract with a Notice of Cancellation, permit the equity seller to pursue the equity purchaser for unconscionable advantage for two years after the sale, and eliminate the use of outside assistance in the pursuit of a foreclosure property. Investors who unwittingly or intentionally become foreclosure consultants to equity sellers may also place themselves in jeopardy under certain conditions.

Trustee's Sale
Most purchasers of foreclosures prefer to acquire their properties at the trustee's sale. At this time, it is possible to make property purchases without being in contact with the defaulted owner or foreclosing lender. Money talks. Anyone with money may make a purchase regardless of credit, race, religion, etc. The verbal auction permits the highest bidder to acquire a property by paying off only the remaining balance on the foreclosing loan regardless of the fair market value of the property. Debt recorded after the date of recording of the foreclosing loan is eliminated. Problems of unanticipated repair,eviction, payoff of superior loan(s), possible IRS redemption and inadequate research can present formidable obstacles to the inexperienced buyer.

REO Lender
When a trustee's sale is held with no bidder present, the property is said to be "sold" to the foreclosing lender. The REO lender usually will sell the property rather than retain the property as part of the lender's nonperforming assets. Finding that lender who will well the property newly acquired at the trustee's sale at a substantial discount is not easy although it is possible through a careful selection of lender sources of such properties. Individuals (not lending institutions) normally present better opportunities to purchase at a discount.

Friendly Junior Note
The fifth way to buy foreclosures is just a bit more complex but is an attractive way to acquire properties with less competition than purchasing at the trustee's sale. If the holder of the junior loan to the foreclosing loan agrees to sell his promissory note and trust deed at a substantial discount, the purchaser of the junior loan may cure the underlying senior loans and then foreclose himself on the newly acquired junior loan. The sale of the property through the junior loan can bring immediate return on the face value of the junior loan of the acquisition of the property with attractive equity.