If I have an 80/20 loan (and the 80% is a 30-year balloon note), and I try to negotiate a short sale or my house goes into foreclosure, and the house does not sell for what is owed on the loan, what are the chances that the banks will sue me? What is the absolute worst thing a bank can do if the owner stops paying? And if they do sue, and I can’t pay, what happens then?

I live in Ohio, btw.

If the bank forecloses your house and you hand it over, it is very unlikely that they will pursue more legal action against you, regardless of how much the house sold for. Banks understand that people who have had their homes foreclosed probably don’t have too much spending money, making any lawsuit winnings very unlikely to cover the costs of their legal fees and additional labor.

We have a buyer for our building. He is out of town until Saturday, then will meet with us to discuss the sale. I’m sure he wants to haggle the price down a little, which is fine. .

But the foreclosure process starts tomorrow, and bank refuses to stop it so we can finalize this. I’m afraid the notice will hit the papers in two weeks and that will kill this sale with this buyer. i.e. why would he buy it from me when he can get it for much less with the bank? I owe less than I would be getting from him, so I know they will be selling it for less.

Do we have any recourse?

Your concern is uncalled for – Foreclosures are not immediately posted – and if your buyer is out of town – even less chance that he will be aware of it. Why would the bank refuse to accept his offer to buy property? Notice of default take 90 days to post – another 30 days until property is transferred back to bank – Bank will not offer property for exactly how much you owe on it! It will go back to what you paid for it. You better make up some payments so that you are current – then you can sell with less worry.

It is everyone’s dream to own a home or built a house for his or herself. There are a few who are fortunate enough to secure one paid in full while many others try to buy one through financing or securing loans.

However, even you are religiously saving for the so-called rainy days and even if you have sufficient finances, there would come a time that you would find it difficult to face up to your obligations. Sicknesses in the family, a possible retrenchment at work or emergency purchases are unexpected instances where you could find yourself in arrears with your payment and then suddenly you are now facing foreclosures.

When legalities come into play in your financial situations or mortgages, it means that your predicament is deep serious. Foreclosures are one of those legal terms that everyone detests, especially the homeowners and the financers or banks themselves.

In exchange for lending the money, the lender would hold a lien against the property, If the borrower does not make the required payments, then the loan goes into default and the lender could exercise the lien against the property, in order to take legal possession of the property for the purpose of selling the property to pay off the borrower’s loan. This process is called foreclosure.

CAN FORECLOSURES BE STOPPED

HOW TO STOP FORECLOSURES

Aside from the obvious reason of not paying their loans on time, homeowners get into foreclosures, even if they have avenues to explore, simply by ignoring calls or letters from their banks and lenders or just simply giving up on his/her property in the hope that the tide of things would turn favorable on them.

Although foreclosures are eventualities in securing homes through financing, it does not mean that this could not be stopped or remedied. The matter hinges on the homeowners themselves if they want to keep the property for sentimental reasons or just simply foreclose it and just face the consequences of their action, notably severe damage to one’s credit rating.

If you are delayed in payments to your mortgages and there is no relief in sight, in the immediate or near future, then you have to put the problem in perspective and make a contingency plan or efforts.

The standard measure of keeping or selling the property is that if your monthly house payment (including property taxes and insurance) does not exceed 40% of your gross monthly income, it should be possible for you to keep the property. If the payment is greater than 40% of your gross monthly income, consider selling or transferring the property to avoid negative impacts on your credit. This option would more likely be the path to be taken by borrowers who have equity in the property. By selling the property, the borrower could then pay off the mortgage, and pocket the difference if there is equity remaining.

If the financial setback is temporary and you need immediate money to make your loan current so that you could continue paying your debts, it is best to approach family and friends instead of hard money loans since they would lend money based on equity in the property. Just make sure to pay off your loans to your relatives or close friends for it is much difficult to have them foreclose on you to get their money back.

The best and simple solution to foreclosure proceedings is to deal directly with the situation. Be brave enough to talk with your banks or lenders and explain your situation. Remember, they do not want to foreclose on you they just simply want their money back plus interest. By exploring this angle, the lender and the borrower may arrive at a common ground to work on and resolve the situation in a way that is agreeable to both parties. The Loss Mitigation Department would deal on cases like this.

Basic lending guidelines would require all home loans would total up to less than 70% of the current market value of the property. If you have more equity than that, you should have no difficulty in obtaining a new refinancing deals or second trust deed to bring your loan current. Expect higher interest rates and loan fees.

There are several other alternatives available to you depending on the situations of the borrower, laws of the state and policies of the lender. You may consider forbearance, refinancing, modification, deferral of principal, a temporary indulgence and a Chapter 13 Bankruptcy.

In applying forbearance, your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses. You must furnish information to your lender that there is a temporary problem and it would be resolved in the near future and show that you would be able to meet the requirements of the new payment plan.

A similar portion is deferral of principal in which the borrower agrees to pay the interest only for a certain period of time and then making the usual monthly payments. But just like in forbearance, this is very difficult to obtain unless the bank is familiar with the borrower or the borrower has an excellent credit stature in the bank.

If you have recovered from a financial problem you may able to apply for a mortgage modification. This process involves renegotiating the terms of debt and/or extends the term of your mortgage loans, changing the interest rates or additional surcharges to the principal with the current lender. This may help you catch up by reducing the monthly payments to a more affordable level. Refinancing, on the other hand, means that the borrower obtains a new mortgage with a different lender; the operative word here is different. As much as possible this alternative should be avoided since it would make your problems worse for borrowers in distress would tend to agree to onerous terms just to get a lease on their loans.

A chapter 13 Bankruptcy could be another option for it gives the borrower the time to “re-organize” his finances and work out a payment plan prior to resumption of payment. This would help keep the property and not blemish your credit rating compared to a Chapter 7 Bankruptcy, which completely discharges any debt the borrower had accumulated under the mortgage.

As a last resort, you may able to voluntarily “give back” your property to the lender or a “deed in lieu of foreclosure.” This would not save your house, but it is not as damaging to your credit rating as a foreclosure. This may be availed of if the borrower is in default and do not qualify for any other options and your attempts at selling the house before foreclosures were unsuccessful.

In some other states, there are laws and other options that are available to borrowers with mortgage problems. There is the option of reinstatement which means that the borrower brings the foreclosed mortgage current, including all overdue amounts, as well as fees and costs. Likewise, there is the co-called redemption, however it is usually limited in how often he or she could take advantage of this option and this is limited to some states.

A foreclosure procedure takes a long time to materialize and homeowners are given the chance to bail themselves out of their predicament. Sometimes the best defense against foreclosure is just to make a response on their inquiries or demand letters. Ultimately, the only thing that would stop foreclosure proceedings is repayment of the debt, for every option mentioned here is just a delay in the proceedings.

John Nazareno
http://www.articlesbase.com/advertising-articles/foreclosure-can-foreclosures-be-stopped-51592.html

I’m currently in foreclosure and lost my job, I have been making $330/month payment for my student loans for 11 years and have 13 more years to pay it off but as of next month can’t afford the payment anymore and am scared about it. What will happen? Can I go to jail?
Won’t they garnish my wages if I ever find a job? I feel like giving up, everything is hopeless at this point. I’ll never got out of all this debt. I regret going to college.

You shouldn’t regret going to college, you should regret borrowing so much money though. However, the past is the past and you can’t change it. I am sorry about your situation right now… I can’t imagine having lost a job and a home, so I hope that things will change for you soon.

Obviously, defaulting on your student loans will affect your credit (but I’m sure you’re not too concerned because the foreclosure will have affected this already). Federal student loan defaults will result in an inability to receive further financial aid, they will seize your federal returns, they can garnish your wages, and they will seize your passport (or make you ineligible for a passport). Private student loans can also garnish your wages and will negatively affect your credit.

You will not go to jail. Don’t worry about that – there is no debter’s prison. Don’t give up – you will get out of the debt. I know this is going to sound goofy, but there is a show called "Til Debt Do Us Part" on CNBC (Saturdays at 10pm). I like this show because it shows you a couples’ debt load (and sometimes it’s 80k-100k). It also shows how much they’re spending each month (and many spend 1500-3000k more than they make each month). This woman works with them and gets them on a schedule to have all of the debt paid off in 1-3 years (depending on the debt load). If you can get to a television (or watch it over the internet), it may give you some hope and give you some ideas. Sometimes you have to get creative in how you can pay it back. It’s definitely not easy, but if you could get your student loans paid off in 3 years, instead of another decade — you know you will feel so relieved and you will feel more positive about life in general. Obviously, take some time to find work first… you may also have to look for a second part-time job depending on what other expenses you have. Find the cheapest place to live, whether it’s a studio or renting a room, etc. If you are married or have children, your living arrangements may need to reflect this. Good luck to you and don’t give up — there are financial advisors who can help you, or simply look at books (from the library) or internet to Dave Ramsey, Suze Orman, etc — they do offer some realistic advice.

Foreclosure is the legal proceeding in which a bank or another creditor sells or repossesses real estate due to the owner’s failure to comply with an agreement between the lender and borrower ( the ‘deed of trust’). Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is referred to as “the lender has foreclosed its”.

There are two sorts of foreclosure in most common law states. Using a “deed in lieu of foreclosure” the bank claims the title and possession of the property in full satisfaction of a debt, usually on contract. In the proceeding known as foreclosure , the property is auctioned by a county sheriff or some an officer of the court. The sheriff then issues a deed to the winning bidder. Banks and other institutional lenders typically bid in the amount of the owed debt at the sale, and if no other buyers step forward the lender receives title to the immovable property in return. Some states have adopted non-judicial foreclosure procedures, in which the mortgage, or more commonly the mortgage’s attorney or designated agent, gives the debtor a notice of default and the mortgage’s intent to sell the property in a form prescribed by state statute. This type of foreclosure is commonly referred to as “statutory” or “non-judicial” foreclosure, as opposed to “judicial”. With this “power-of-sale” type of foreclosure, if the debtor fails to cure the default to stop the sale, the mortgage or its representative will conduct a public auction in a similar manner as the sheriff’s auction. The highest bidder at the auction becomes the owner of the immovable property free and clear of any interest of the former owner but the property may be encumbered by any liens superior to the mortgage being foreclosed (e.g. a senior mortgage, unpaid property taxes etc). In some cases further legal action, such as an eviction may be necessary to obtain possession of the premises.

Strict Foreclosure is an equitable right available in some states. The strict foreclosure period arises after the foreclosure sale has taken place and is available to the foreclosure sale purchaser. The foreclosure sale purchaser must petition a court for a decree that will cut off any junior lien holder’s rights to redeem the senior debt. If the junior lien holder fails to do so within the judicially established time frame, his lien is cancelled and the purchaser’s title is cleared. This effect is the same as the strict foreclosure that occurred at common law in England’s courts of equity as a response to the development of the equity of redemption.

In most jurisdictions it is customary for the foreclosing lender to obtain a title search of the immovable property and to notify all other persons who may have liens on the property, whether by judgment, by contract, or by statute or other law, so that they may appear and assert their interest in the foreclosure litigation. In all US jurisdictions a lender who conducts a foreclosure sale of immovable property which is the subject of a federal tax lien must give 25 days’ notice of the sale to the Internal Revenue Service : failure to give notice to the IRS will result in the lien remaining attached to the immovable property after the sale. Therefore, it is imperative that the lender obtain a search of the local Federal Tax Liens so that if the persons or companies involved in the foreclosure have a federal tax lien filed against them, the proper notice to the IRS will be given.

Some individuals and companies are engaged in the business of purchasing properties at foreclosure sales. A number of companies promoting themselves on the internet and in other advertising media have sprung up touting the profits that can be made buying properties in foreclosure. Purchasing properties in foreclosure can be a “risky business” and should not be attempted by the uninformed. Read books on foreclosure investing and purchase a good foreclosure investment software to protect yourself from buying the wrong foreclosure properties.

For more information visit www.sharkbaitsoftware.com

Sharkbaitsoftware .com
http://www.articlesbase.com/investing-articles/indtroduction-to-foreclosure-investing-62122.html

My bank is attempting a second illegal foreclosure. They stopped the first one with no explanation. I have an FHA insured loan, so they are required to follow FHA guidelines while servicing my loan. I am attempting to get my loan modified and the bank has stated in writing they are following "investor guidelines". The bank will not answer any of my questions and has completely stopped communicating with me. I have contacted the law firm involved, but the have also refused to return my calls or e-mail. I have filed complaints with HUD, the Office of the Comptroller of Currency, and my State Attorney General, but the bank keeps moving forward. The investigations are not complete, and I’m not sure if the bank is responding to the complaints, but is there anything else I could or should be doing? I have little money, so hiring an attorney is out of the question. I have been trying to find an attorney to represent me pro bono, but have had no luck. Any suggestions you have would be appreciated.

I would also call the 800 number on the making home affordable. gov website
They are the agency put there to help you with these problems since the government is doing everything possible to slow down foreclosures.
They will give you free advise.
From the site:

http://makinghomeaffordable.gov/

Call 1-888-995-HOPE (4673) to learn about Making Home Affordable and to speak with a HUD-approved housing counselor for free. If you are having difficulties working with your mortgage company, ask for “MHA Help”. …

In my state, Florida when you buy a house with borrowed money your lender will place a lien against the property using a Deed.

This instrument is recorded in the courthouse telling the world that you owe that that specific amount of borrowed money. You will also have the deed that transfers ownership (title) to you, letting everyone know that you won the house.

We want you to fully understand that the bank doesn,t want the house, just the lien against it.

A promissory note is also signed by you and recorded as a promise to pay back what you borrowed for the lender. It will outline the terms of how that money is to be paid back, meaning the payment amount, interest rate and the number of months it takes to pay back your loan. (Amortization)

It is when someone decides to stop making payments that you piss off the lender, and he starts doing all kinds of nasty things like having someone is collections dept. call you at work and at home. It is important to follow the time frames described here, as they will give you a full understanding of why lenders do what they do.

Collection call usually begin after the 16th day after the payment due date has come and gone. The 15 days are called the grace period. After that you can be assessed a 4% late payment fee, as described in the promissory note you signed at the closing.

If 31 days go by and you still haven’t made a payment they will get much more aggressive and the Nasty Collection Department will call you and send letter to your work and home reminding you of the importance of sending your payment in immediately.

Most lenders will even accept a check by phone, for you payment and late fees to bring your loan current. Most lenders that report to the credit bureaus will have the ability to rate a 1×30 on your credit file. (1×30 = paid on time over 30days.

If 60 days go by with no payment, the lender does the same collection calls and more nasty letters will come.

Many lenders will mail a letter stating that the account is in default, now demanding two payments and tack on late fees. Some lenders will still allow the homeowner to make only one payment, which would show the account a rolling 30 days past due.

After 90 days a lender will typically only allow you to make the three payments plus interest and late fees.

This is the crucial point date that pushes the homeowner over the edge as far as the lender is concerned. To most people it’s the point of no return. It represents a major cash requirement that panics most homeowners because the FORECLSOURE word is now being used.

Foreclosure is now being used in phone calls to you as well as in the now Threatening letters. Both aggressiveness and lender policies will dictate whether they will accept one or demand all the past due payments at this point.

If you’re the investor looking at the deal, you want a lender who is flexible enough to take only one payment. Other factors will apply as to how flexible the lender will be.

These factors include amount of equity in the property, the attitude of the person handling the account, how the customer has paid the account, if the customer has lied to the lender and how many accounts the lender has in default and also the time of the year. The last quarter of the year October, November and December lenders are normally much more flexible.

Usually, after 120 to 180 days, a lender will contact the trustee (foreclosing attorney) to begin legal proceedings. At this point the fees add up quickly, anywhere from $250.00 to $2,600 and higher.

These fees increase on a daily (per diem) basis. In almost every case, after five months the lender will step aside and allow the foreclosing attorney to take over from that point on.

It then becomes the attorney’s job to serve foreclosure papers to the homeowner in default.
Remember, foreclosure has not yet occurred, the homeowner still owns the house.

Once a homeowner is personally handed foreclosure papers, the attorney (trustee) now has the right to advertise the foreclosure by running an ad in the local legal newspaper.

Prior to the running of this ad, the defaulted homeowner will have a court date for which the individual has to write to contest or plead why foreclosure proceeding shouldn’t continue.

This might be where the homeowner could say that the original note (loan) was sold and the new mortgage owner (lender) never gave an address to start sending payments. In most cases it goes uncontested and the entire foreclosure process continues.

The real problem becomes evident when the actual sale date has been set for the house to be auctioned off on the courthouse steps.

The foreclosure process allows the original lender to foreclose off any liens: 2nd and 3rd mortgage judgments and mechanic liens to get the title (deed) back in their name, so the lender can resell the property through an asset liquidation company or Realtor to get back the original amount of the loan plus their expenses.

If the auction is successful the property will be sold to the highest bidder who must pay cash within 30 days for the original loan amount plus expenses.

You should know, if a property is sold at public auction for higher than the loan balance incurred, all excess cash over the bid will go to the homeowner. If there is a 2nd mortgage the excess will go to satisfy that debt.

Richard Reichmann
http://www.articlesbase.com/non-fiction-articles/how-the-foreclosure-process-works-and-why-it-exists-139343.html

my grandma decided to short sale her house because she couldn’t pay it. When she started the short sale, she stopped paying. Now after 2 years the bank didn’t approve any of the offers. Now they are giving her 2 options foreclosure or transfer of property to the bank. Which one is better and which one will affect her credit less.

What should she do?

If you mean deed in lieu of foreclosures, take it. It will still be a credit hit but not as bad. Make sure the deed includes language that the mortgagee (bank) also satifies the mortgage and will not pursue a deficency judgment.

realtor.sailor

Washington

The state of Washington uses both in-court and out of court foreclosure proceedings.  Judicial or in-court foreclosure is used when the language in the mortgage or deed of trust does not contain a power of sale clause.  Should this be the case, the bank must get the court’s permission to foreclose or in otherwords the need to get a court order to move forward with the sale of the property.  After this has been obtained, the lender will proceed with the foreclosure process, and auction of the home.  To use judicial foreclosure the bank’s attorney must file a law suit against the home owner who is having difficulty making his house payments.  This is done to get the court’s permission to sell the house to try to collect on what is owed on the loan.  This is a much longer and more expensive process than non judicial foreclosure and so it is not used very often.

Non judicial foreclosure is the most popular method of foreclosure.  This is the case becaue it saves the lender both time and money.  Since it is in the bank’s best interest to spend as little time and money on this process as possible and it is their choice as to which process to use, non judicial foreclosure will almost always be the method used to sell the home.

A power of sale clause is the language in a mortgage or deed of trust that allows a lender to foreclose on a defaulted loan without going through the court system to do so.  When a power of sale clause does exist in the mortgage or deed of trust, then non-judicial or out of court foreclosure is followed.  This is almost always the case.

To proceed with an out of court foreclosure in Washington, the lender must start by sending a notice of sale letter to the home owner by both regular mail and by certified mail, return receipt requested.  This notice of sale must be sent to the home owners last known address.

If the home owner has an attorney of record, it must be sent to that person as well.  The time frame required for this notice of sale to be sent is a minimum of thirty days prior to the sale.

Other requirements to move ahead with an out of court foreclosure in Washington include that the sheriff must publish or advertise the notice of sale once a week for four weeks leading up to the sale date.  This advertisement can be placed in any newspaper that has circulation in the county where the property is located.  Also the sheriff must post this notice of sale on the court house door in the county where the property is located.

The sheriff must post this notice on at least one other public place as well.  These public postings can be placed anywhere considered a public place, like the county office building or the library etc.  The placing of the public postings is completely up to the discression of the county sheriff. These public postings must also take place four weeks before the sale date.

This notice of sale must include the time and place of the auction, the names on the deed, the date of the deed, recording info, a description of the property and the terms of the sale.

In Washington the home owner can stop the foreclosure proceedings by paying the past due payments, plus other expenses the lender has incurred in the process.   Those costs will include, but are not restricted to the lawyer’s fees involved.  The home owner can halt the process this way as late as eleven days before the sale date.

In Washington the auction of the property is always held between 9:00 am and 4 pm on Friday at the courthouse door.

If the Friday that is closest to the date chosen by the lender happens to fall on a legal holiday, the sale will be held on the next business day.  In this state, the auction cannot be held any sooner than the 190 days following the date the notice of default was issued by the lender.

The obtaining of the property by the highest bidder, in Washington, is confirmed by the receipt of a certificate of sale. 

In Washington, the sheriff can postpone the sale for a maximum of 1 week.  If the sheriff chooses to do so, then the notices must be posted as they were prior to the original sale date.

Home owners have an eight month right of redemption in this state.  This means that should the person who lost the home at auction be able to come up with the amount of money of the winning bid at auction, plus interest, then they can again enjoy ownership of the property.

This doesn’t happen often, but it does mean that the new owner or the person who placed the winning bid must worry for eight months about whether or not the home is really theirs.  If it were me, I would certainly refrain from putting anymore money into the house.  I would also consider not moving into the house until the 8 months following the sale have expired.

If the lender chooses to pursue an out of court foreclosure in Washington, it foregoes any chance it might have had to pursue the borrower for a deficiency judgment.  That means they can’t seek any additional money not generated by the sale of the home. 

If the lender chooses to follow an in court foreclosure, they can follow that decision or out come up with and additional pursuit of the borrower for any funds they feel they are due above what is gained through the sale.  The only exception to this rule is that if the property is proven to have been abandoned for six months before the decree of foreclosure was issued, by the court.  In this situation, further pursuit of the borrower for money is prohibited.

Because most forclosures in his state are out of court processes.  This means that lenders rarely have the right to seek a deficiency judgent. This is of course good news to the person who looses their home at the foreclosure sale.

Integrity 1st Consulting is your Foreclosure  ebook specialist- Kathy Swift

Kathy Swift
http://www.articlesbase.com/real-estate-articles/foreclosure-process-in-washington-467486.html

my grandma decided to short sale her house because she couldn’t pay it. When she started the short sale, she stopped paying. Now after 2 years the bank didn’t approve any of the offers. Now they are giving her 2 options foreclosure or transfer of property to the bank. Which one is better and which one will affect her credit less.

What should she do?

A deed in lieu of foreclosure is the best. Her credit report will showing something like "settled for less than the mortgage balance." If her banking is willing to accept a deed in lieu, make sure it contains language to the effect "grantee shall satisfy the mortgage for which this property is security" or something similar.

realtor.sailor