FORECLOSURE'S
First of all if your are going thrue foreclosure do everything possible to try and stop it. APS Commercial Property Inspection Service put this information together for you. Lender and banks are now more than ever are willing to work with you and help. The HUD website has good information than can help you through this. http://www.hud.gov/foreclosure/index.cfm
If you are purchasing forclosure click HERE for advise about what to
look for when you buy
1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan
and the more likely that you will lose your house.
2. Contact your lender as soon as you realize that you have a problem.
Lenders do not want your house. They have options to help borrowers through difficult financial times.
3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at www.fha.gov/foreclosure/index.cfm.
6. Contact a HUD-approved housing counselor.
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.
7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.
8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.
10. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
BUYING A FORECLOSURE
Homes usually go into foreclosure because the owner can no longer afford the mortgage
payments. As a result, maintenance and repairs get neglected as well. It is critical
that buyers know the condition of the structure and all the major systems. Get a APS
Commercial Property Inspection Service Certified Inspector to provide the information you need before
you buy a home that will be a money pit.
Even if the bank is unwilling to negotiate over any discovered defects, the information
the buyer receives from a thorough home inspection is invaluable in making an informed decision. And even if there are plans to do significant remodeling, why risk discovering problems with the furnace, foundation or structure after you close escrow and begin work. It is better to eliminate any big surprises and know up front by getting a detailed home inspection.
There is a lot of talk about "Foreclosure" home buying, especially on TV infomercials and various Internet sites where it is claimed that you too can either save a fortune or make a fortune by buying foreclosure properties.
Occasionally, there really are foreclosure bargains. But that is also true of the real estate market in general. If you do have an interest in foreclosures, your interest should be tempered with a clear understanding that not all foreclosure prices are bargains. In fact, many are not because of the bidding process that can be involved. It's a bit like any other auction process. Sometimes the potential buyers bid the price above what the item is intrinsically worth. Also, recognize that a low price, by itself, does not indicate a bargain. The property may require costly repairs or improvements before it can be occupied or resold.
On the other hand, if you are a "do-it-yourselfer" and you don't mind investing a good deal of your own time, energy and money in what is known as "sweat equity," a foreclosure home, particularly one that needs some cosmetic work, can be a good investment. But, know what you are getting into. Get a home inspection and know what is happening with the home.
Foreclosed homes are typically sold "as is" meaning there is no warranty as to its condition, the type of financing available on it, the form of title, and, among many other things, the rights of any lien holders. Get good legal advice as well as good real estate advice.
The U.S Department of Housing and Urban Development (HUD) is one of the largest entities involved in selling foreclosure properties and their website is a good place to start to learn more about buying foreclosure properties. Their website is at: U.S Department of Housing and Urban Development
Some Terms to Know:
Pre-foreclosure sale: That's where you buy a home from the owner before the owner is foreclosed upon. Hobson said she liked this type of sale because the buyer and the seller were motivated. The seller, of course, wants to dodge the bullet of foreclosure. But the buyer gets the discount, which is typically in the neighborhood of 10 percent to 20 percent. The buyer also gets the opportunity to inspect the property.
Auction: An auction comes with lots of risks. You're buying the property, as is. That means you can't go in and inspect it, and generally people who have fallen behind on a mortgage haven't made a lot of home improvements or been able to maintain the home.You just don't know what you're getting.
There are also people who bid on homes at auction for a living, so you might be bidding against someone who's very savvy.
Generally, a home that's bought at auction sells for about 40 percent below market value, so you get an incredible deal here. But another downside is that you must pay cash for it. You cannot get a mortgage, because a mortgage company must be able to go in and appraise or inspect the property, which it can't do in this situation.
Real estate-owned: That's where the lender or the bank has the title, and it owns it. Typically you find that the property doesn't sell at as big a discount as a pre-foreclosure sale or an auction. There's much less risk there. You can get a mortgage, and you can inspect it. So it's really like buying a property from a regular person. It's just owned by a bank.
APS
Commercial Property Inspection Service
Serving Cleveland, Lakewood and Northeast Ohio
1582 Victoria Ave
Lakewood, OH 44107
(216) 544-9322
(866) 875-5566
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