I need info about forclosures on homes?

Question

I was just wondering if anybody could tell me everything they know about forclosures on homes? A family member of mine is about to lose the house that has been in our family for 40+ years and I was wondering if there is anyway to save it or if it can be purchased? I would buy it if it can, so please I need to know everything there is!

Answer 1

Steps You Can Take to Avoid Foreclosure and Save Your Home

A loss of a job, medical expenses and other life-altering occurrences can happen to anyone, causing us to fall behind in our loan payments. If we neglect paying our credit cards it hurts our credit rating, but if we stop paying our home loan the situation is even worse, because the lender can foreclose, taking ownership the home.
Don't Be Embarassed

You must put your pride on hold if you're truly serious about stopping the foreclosure process. Lenders do not want to foreclose, and will usually work with you to get you back on track.

Rule #1: Contact your lender as soon as you know your payments will be late.

Rule #2: Never ignore the lender's letters or phone calls. Ignoring the problem won't make it go away.

Rule #3: Never assume your situation is hopeless.

Solutions for Temporary Problems

Reinstatement
Reinstatement might be possible when you are behind in your payments but can promise a lump sum to bring payments current by a specific date.

Forbearance
In forbearance, you are allowed to delay payments for a short period, with the understanding that another option will be used afterwards to bring the account current.

Lenders sometimes combine Forbearance with Reinstatement if you know you'll have the funds to bring your account current by a specific date.
A Repayment Plan
If your account is past due, but you can now make payments, the lender might agree to let you catch up by adding a portion of the past due amount to a certain number of monthly payments until your account is current.

Solutions for Longer-Term Problems

Mortgage Modification
If you can make your regular payment now, but cannot catch-up the past due amount, the lender might agree to modify your mortgage. One solution is to add the past due amount into your existing loan, financing it over a long term.

Modification might also be possible if you no longer have the ability to make payments at the former level. The lender can modify your mortgage to extend the length of your loan (or take other steps to reduce your payments).

Selling Your Home
If catching up is not a possibility, the lender might agree to put foreclosure on hold to give you some time to attempt to sell your home.

Deed in Lieu of Foreclosure
When the lender allows you to give-back your property--and forgives the debt. It does have a negative impact on your credit record, but not as much as a foreclosure.

The lender might require that you attempt to sell the house for a specific time period before agreeing to this option, and it might not be possible if there are other liens against the home.

For FHA Loans
The lender might be able to help you receive a one-time payment from the FHA Insurance fund. Your loan must be at least 4 months but no more than 12 months past due and you must show you are able to begin making full mortgage payments.

You must sign a promissory note which allows HUD to place a lien on your property for the amount received from the fund.
The note is interest free, but must eventually be repaid.
The note becomes due when you pay off the loan or when you sell the property.
For VA Loans
VA VA Regional Loan Centers offer financial counseling that's designed to help you avoid foreclosure. Call 1-800-827-1000 and ask for the phone number of the Loan Service Representative in your area.

Contact a HUD-Approved Counselor

If you don't want to talk with your lender first, contact a HUD-approved counseling agency. A counselor can help you determine which options might be available to you and negotiate with your lender to work out a repayment program. You can find an approved agency on the Web.

Put the Process in Motion

Your lender won't automatically put you into a program to bring your loan up-to-date. You must put the plan into motion and provide the lender with the documentation they require to analyze your financial situation.

Although lenders do not want to foreclose if it can be avoided, they do want to make sure you can follow-through on any promises you make to bring your account current.

Be prepared to share all details about your financial situation with your lender.

An explanation of your current financial circumstances.
Details about your current income.
A list of your household expenses.
The lender will review and analyze your situation before offering a solution to bring your loan up-to-date.

Repairing Your Credit

If your home loan is past due, your other obligations probably are too. A nonprofit credit counseling agency might be able to help you work with your creditors to reduce your monthly payments by lowering interest rates or extending repayment periods.

The key word here is nonprofit. Steer clear of companies that promise you quick, easy results for all of your credit problems--if you pay them a large fee. You know better--that's not how it works in the real world. The National Foundation for Credit Counseling is a good place to start.
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Answer 2

You can buy the home by showing up at the public auction with a certified bank check in the amount required of bidders (typically $5,000.00, but sometimes $10,000.00 or more) and being the high bidder for the property.

First, you need to know whether this is a first mortgage that is being foreclosed. If it is, then it will extinguish all junior mortgages, attachments, executions, and tax liens other than a taking for non-payment of real estate taxes.

Second, you need to get pre-qualified for a mortgage in an amount that will enable you to finance the rest of the purchase price if you are the high bidder. That also means that you must have enough cash on hand for the required down payment of 20%. If you don't have 20% down, then it may affect the willingness of a bank/mortgage company to finance you, or at least make it more expensive to borrow the amount you need to complete the purchase.

Third, you need to complete the purchase within 30 days of the public auction, so you have to have everything in place before then.

Your relative should consider filing a Chapter 7 petition in U.S. Bankruptcy Court in order to delay the foreclosure if necessary. If there is any equity in the property, then he should consult a bankruptcy attorney to determine how he can salvage some of the equity for himself.

Lastly, you need to know that you aren't buying a pig-in-a-poke. Your relative should allow you to do a home inspection so that you know whether the roof needs replacing or the boiler is about to go, et cetera. You can't afford to overextend yourself to buy a house that needs several thousands of dollars in repairs unless you can, in fact, afford it.

Good luck. Get a good real estate attorney to help you. Always buy an owner's policy of title insurance. If you don't and a problem is discovered in the future then you will have to retain your own attorney to solve the proble or sue someone, which will cost you thousands of dollars out-of-pocket that you cannot recoup. Spend the extra money for an owner's policy of title insurance, you will be required to buy a lender's policy of title insurance for your lender, so for $500-$1,000 more you can buy the owner's policy.

Good luck.

Answer 3

You may try to do a short sale.
Contact the bank, and make them an offer.
What type of foreclosure? F. H. A. or conventional.
If it is a conventional foreclosure, first
the owner will be notified by the county
sheriff (deputy) to vacate the premises, you
could delay the eviction by calling the sheriff
offices, and maybe you will have to pay a small fee.
If it is a HUD/FHA foreclosure, call immediately and make arrangements,They will listen.
In any case, you have to talk to
the bank don't just ignore them, they will
work with you.
if you decide to buy it, do it immediately and
notify the mortgage holder of your intentions
Time is of the essence.
good luck to you.
PS
it will be a good idea if you and your relative
contact a Real Estate lawyer and explain your intentions, they know what to do

Answer 4

Man on man, someone refinanced the house to take money out and then couldn't pay back the loan. Presumably they used this money to pay things other than remodeling/renovation expenses, so this debt won't be eligible for Bush's tax act forgiving foreclosure debt.

Obviously if someone could pay off the loan, the bank would be happy. If someone could bring the loan up to date, the bank would probably be happier than they are now...the problem is, will the bank permit a short sale to you? will the bank help you find a mortgage based on your credit record?

And what will you do with the relatives currently living in the house? Let them stay? Rent to them? That's full of problems there too.

(If the house is sold at auction, as a relative you probably won't be allowed to bid on it.)

Answer 5

If they have the funds, they are able to buy it back from the bank. I myself had a friend that did this. Work with the banks anyway you can to save the house. I do understand how you feel. Best of luck.

Answer 6

If you have a 6-month old baby that is really fussy, I hear it can make negotiations very easy if you bring her. Just a guess, most people don't have 6-month old babies that are fussy, but it's worth a shot.