Beginners guide to the foreclosure process

(EMAILWIRE.COM, August 01, 2008 ) Sacramento, CA - People who are unable to make mortgage payments are in danger of losing their homes to foreclosure where the mortgage lender takes back possession of the home. This article describes some common steps in the process by which a bank or other mortgage lender takes back a property.

Missed home mortgage payments for 2 or more months.

Once a lender hasnÂ’t been paid in 2 or more months they will usually file what is known as a Notice of Default (NOD) with the County RecorderÂ’s office. This starts the process known as pre-foreclosure.

Pre foreclosure status

Once the bank files a Notice of Default (NOD) the homeowner is usually given 3 months to pay back the missed payments or sell the house and pay off the loan. If the loan is not paid off, or if arrangements arenÂ’t made regarding a repayment plan the bank may actually take back title from the homeowner and oftentimes begin the process of eviction. In many areas a homeowner can live in a property in foreclosure as long as five months or more from the filing of the NOD before the eviction process can be completed.

Options to avoid foreclosure

There are many solutions to avoid losing a home to foreclosure, and the best one is figuring out a way to reliably pay a mortgage that does not impoverish the homeowner due to unrealistically high payments (usually anything over 45% to 55% of a persons income). If any third party outside the homeowner and lender get involved the homeowner is usually best served by a permanent sale of the property either to an investor or through a real estate agent.

Selling a house fast for cash to a real estate investor

Like a pawn shop, a We Buy Houses real estate investor can offer you cash for you house, but they may not pay you close to what you think the current fair market value is. In the Summer of 2008 with many real estate markets across the United States in decline, investors are much more cautious about buying properties at too high a price as the prices may continue to decline rapidly. That said, real estate investors will always buy a house if it is priced far enough below the market value to compensate for the risk that they will not quickly be able to sell it.

Selling your house via a real estate agent or real estate broker

If you do have equity in your home and donÂ’t want to let an investor have a large share of it in exchange for a quick buy out of your interest in the home, you can list it with an experienced real estate agent who knows your local market well. The best of these agents will encourage you to list your house at a currently realistic price. In this day and age, the true fair market value of a nice home in a nice area is sadly far less than it was a year or two or three ago.

Smart agents set up an auction environment with your house

Many agents report that when they deliberately list a home for sale at a very low price compared to similar homes in the area they do so in part to generate a bidding war that can result in a much higher selling price than the listing price.

Selling via a short sale

Unfortunately, but many banks will not negotiate the process known as a short sale with a homeowner who is about to miss mortgage payments, but has not yet done so. If you are a homeowner who has not missed payments, but is about to and your house is worth less than the debt you owe, then your bank may prove difficult to deal with until you have missed payments. This will negatively affect your credit. Homeowners who are anticipate that they will miss payments for any number of reasons should consider listing their property as quickly as possible to start the home selling process which, if a foreclosing lender is involved, can take longer than normal. If an agent you speak with is not very experienced with short sales you should consider finding one with more expertise.

Buy a foreclosure house

If your goal is to save thousands of dollars on a foreclosure home purchase there are deals throughout the country. For first-time homebuyers and other people interested in foreclosure homes the deals only a short step away.

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www.TheHomeBuyingCenter.com
Patrick McGilvray
916-821-6200
patrick @ thehomebuyingcenter.com