November 28, 2008

What to Look for When Investing in a Pre-Foreclosed property Listing: Strategies for Getting Pre Foreclosures

Purchasing a pre-foreclosed home is certainly one of the best ways to buy a house for less than its normal market value.  One of the great pros to buying pre foreclosed homes is that you don’t have to compete in foreclosure auction bidding wars that can get out of control. There also isn’t a need to go through Real Estate agents that may not get you the best deal. This often leads to being able to negotiate a better suitable price, that can lead to big Realty resale profits.  Often the homeowners will sell their home at a large discount in order to avoid having a long term poor credit rating that comes with the foreclosure process.  Often, both parties can find a way to jointly help each other. It can be tricky finding pre-foreclosures that have value left, so looking in the right place is important. It’s best to use pre-foreclosure experts that don’t charge hundreds of dollars for pre-foreclosure listings.  Government agencies often do that provide enough data or it is too old.  

The first moment of the Lis Pendens, or  a notice that a legal action is pending,  begins the process. From this time until the home with a mortgage in default goes to auction, there is still time to act and fix the situation between the homeowner in trouble,  and lender. The length of the process can take somewhere from three to four months before the home hits a foreclosure auction, and even longer in certain states.  Make sure not to forget to check out all of the documents and liens. Also, narrow and calculate your choices to find the best property. You may need to make  a few needed repairs before selling, so look at the condition of the home.  Contacting a homeowner who is losing their property can be difficult.  Send letters and make sure that you set a friendly tone telling them that you understand the situation and can help.  Follow up with phone calls, but don’t interrogate the homeowner in default. If you feel comfortable enough visit.  Be friendly and helpful, but back away if the homeowner asks you to leave.  

November 19, 2008

Treasury and lawmakers battle about foreclosures

ben-bernanke1Treasure Secretary Henry Paulson along with members of congress fought about issues concerning the US bailout plan. Paulson said that the government bailout plan isn’t a be all cure all kind of deal, but would best be used to rescue financial institutions so that the entire economy doesn’t suddenly collapse. It wasn’t supposed to cure the economic problem, just help it out. The treasury has been accused with arbitrarily coming up with plans and then enacting them. Paulson has admitted of hearing about a plan to rescue average Joe homeowners but said that the plan by the treasury department seemed sketchy. Rep Barney Frank of Mass. said to Paulson that the Federal bailout plan was doing nothing to stop the foreclosure pandemic, and this is killing the economy. Five million more foreclosures are expected by next year, and if nothing is done to stop them we are in real trouble. A 25 billion dollar plan to give lenders a share in government money could stop almost two million foreclosures from occuring in the future. Federal Reserve chairman Ben Bernanke is in favor of a proposal from the fed to slow down the rate of foreclosures. Paulson is not a fan of using Fed bailout plan funds to bailout automakers because they should be focusing themselves on producing more energy efficient cars and not borrowing Federal money. Bernanke insists that putting more money into banks is the way to stop the financial crisis because more loans will be given out this way and confidence will be restored. He says this as home prices continue to plummit (no buyers being able to get loans), unemployment on the rise, and foreclosures riseing in numbers. He plans on saving a large sum of bailout plan money for Barack Obama’s administration. The first 350 billion dollars has already been spent, mostly given to large financial institutions.

November 14, 2008

Bank Bailout Won’t Help Real Estate Foreclosure Crisis

Filed under: Uncategorized — americanforeclosures @ 11:41 pm

Here is a freely syndicated article about how the financial bailout plan is not going to help those facing foreclosure. The author says to be proactive and don’t wait for the government to bail you out.

It started slowly at $250 Billion, then gained momentum up to $500 and then $700 billion. But what was the government rescue supposed to do, and when will it help many of the foreclosure victims that gave it such a loud voice? Well, the answer is muddy at best, and downright ugly at its worst. Bottom line is that it might not help anyone in the midst of a foreclosure.

Just two weeks ago, I appeared on a special FOX News report as a national expert commenting on the US Government rescue package, and what it meant for homeowners facing foreclosure. Many people were both angry and confused about the rescue package. The honest truth is that there was nothing in that bill that was passed that will do anything directly for those facing foreclosure. It was instead designed to bolster the flagging economy by injecting cash into the banking system. Unfortunately, the banks won’t use it the way Congress is intending. Here’s a recent example:

It was announced this week that PNC Bank was buying National City Bank, who was ailing just like many of their recent competitors. But here’s what you didn’t hear: The deal was announced just hours after PNC Bank accepted $7.7 Billion of the governments handout from the rescue package. In other words, the deal would not have gotten done if the money wasn’t provided to them from the government through the bailout package.

So where’s the help for the guy on Mainstreet?

Buying up foreclosure properties through a government subsidy won’t help the average homeowner facing foreclosure. Instead, what will happen is that the banks will use the funds to “pawn off” their worst performing property loans or foreclosure acquisitions, and get the government to bail them out of those securities. Immediate relief will only come as homeowners push their financial institutions into taking action. So what do you do if you are facing foreclosure?

First, don’t wait for the government or even the bank to bail you out. It won’t happen, and by the time they seek you out – it’s too late. In Foreclosure Myths, I talk about several options on how to engage lenders in the “loss mitigation” process – or negotiating their losses. Even if your not an investor, you can implement the same strategies. It all comes down to the way it’s presented:

  1. Make sure you know the actual loan balance and true current value
  2. Get comparables from your local MLS or online system to verify similar properties that have sold within a 5 mile radius
  3. Take pictures of the property – inside and out – indicating the present condition, and what repairs will be necessary to bring the possible foreclosure property back up to saleable condition.
  4. Take pictures of the neighborhood – especially of other properties for sale on the same street. This indicates competition for the bank.
  5. Contact the financial institutions “Loss Mitigation” department – not the customer service dept. The customer service folks are trained and TOLD to tell you “no”!
  6. Prepare and present an offer for a “Short Pay” to the loss mitigation department, using the recent sales, foreclosure numbers, pictures, rehab and repair costs and everything else to illustrate that it is in their best interest to lower your balance and payment. They sasy that a picture is worth a thousand words – in this, case it worth thousadns more.

The fact is that many homeowners who are facing foreclosure, or likely to face foreclosure in the coming year, are waiting for the goverment to come to the rescue. The recent “bailout” rescue package won’t do it, and the funds that DO go to the financial institutions won’t wind up helping anyone looking at the road to foreclosure. Don’t sit around and be reactive – be proactive and start fixing the situation on your own.

The sooner we allow the real estate market to correct itself, the faster that prices will find a foundation, foreclosures will fall, and homeowners will see their values start to increase. More government assistance will only prolong the problem, and money will not get to the ones who truly need it.

Chip Cummings is a best-selling author who has written seven books, including his latest, “Foreclosure Myths” (Wiley, 2008) and his upcoming “Cashing In on Pre-Foreclosures and Short Sales” (Wiley, 2009).

Chip is a certified national trainer of real estate finance in 42 states, and speaks around the world on mortgage and real estate issues. He has appeared on FOX News, NBC, ABC, Fox Business and hundreds of television and radio shows. For more information or to have him speak at your event, you can find him at or call (616) 977-7900.

November 10, 2008

How is the Democratic increased Presence in Congress and Barack Oboma Going to Affect the Housing Market and Housing Crisis?

Filed under: Uncategorized — americanforeclosures @ 10:36 pm

Now that the Democrats are the majority in the White House, what does this mean for the housing market and more importantly, the housing crisis? One influence that the increased presence of democrats in Congress will have on the housing market is increasing the odds of bankruptcy judges gaining the authority to change distressed home loans on main residences become greatly better. With new initiatives, bankruptcy judges would have numerous ways to alter mortgages to avert foreclosures. The interest rate could be lowered; payment terms could be extended from thirty years to 40, or support a reduction in the outstanding loan balance to mirror the current lower value of the home. This is known as “cram down.”

The banking industry is strongly opposed to this reform, noting that more payment would be needed to make up for the fact that loans could be modified or alerted at any time. The banking lobby is still strong despite being financially weaker.

The question for Barack and his administration is: Will they want to mess around with these laws in their first administration? Most likely not, but you never know with Barack Obama. He seems like the politician to do such a thing.

November 5, 2008

Barack Obama (Dem) Wins the Presidential Election!

Filed under: Uncategorized — americanforeclosures @ 5:42 pm


There is an elated atmosphere here in the blue states as Barack Obama has been officially elected the new president of the United States. A democratic cry for hope and change swept through the country with Barack Obama winning 349 to 163 electoral votes. Obama won key swing states like Pennsylvania, Ohio, and Florida which bolstered him to victory. He even won known republican states as change spread across the country. The senate is now 56 to 40 in favor of democrats (with 51 seats required for control) and the house is 253 to 172 in favor of democrats (with 218 seats need for control of the house). For a while last night it seemed that McCain might even lose his home state of Arizona, as it was too close to call.

More youths turned out to vote in key swing states including Pennsylvania and Florida with over 7 percent more voting and 3 percent voting respectively.

People who are favoring change want something done about the economy and voted democratic. They wanted health care reform and a plan to pull U.S troops out of Iraq.

It is only a matter of time now before we see how the new president elect Barack Obama will fix the economy and turn the housing market around. Obama will give tax breaks to the middle class and make health care more affordable.

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