According to the AP article in the Mercury News, Half of housing grants used to buy foreclosures, just over half of $4 billion allocated to the Neighborhood Stabilization Program, the Obama administration’s program to help homeowners facing foreclosure, will go to local governments to help them buy and fix up foreclosed properties. The article states:

Around 56 percent of the grants approved last year will be used to buy and rehabilitate properties that have been abandoned or foreclosed, according to the report from Enterprise Community Parnters.

Foreclosed Homes for Sale: 3 Reasons It Presents Opportunity for Foreclosure Cleaning and Other Real-Estate Related Business Owners

Gov't Buying Foreclosed Homes a Good Thing for Many RE-Related Businesses

This spells opportunity for a host of real-estate related small businesses, eg, foreclosure cleaning companies, realtors who specialize in REO/distressed properties, junk haulers and more. How? In the following ways:

1. Government Allocations: Once the government allocates funds, they must be spent. When have you ever met a public official who didn’t know how to spend money? Hence, millions will be spent on getting foreclosure homes for sale ready for market, demolishing them, etc. This brings us to the next point, ie, who will do the work?

2. Subcontractors and Subcontractors Needed for Foreclosure Homes for Sale: When the government has work to be done, they use contractors, who often use subcontractors. And, you have to be licensed. If you’re a mom and pop shop with no official documentation, eg, insurance, official business license, etc., then you won’t be able to vie for these contracts. You must “get official” first.

If you provide foreclosure cleaning services, real estate cleanup services, demolition services, lawn and property managment/preservation services, etc., now is the time to make sure your paperwork is in order so you can bid on these upcoming contracts, which brings us to our last point.

3. HUD Contracts for Cleaning Foreclosed Properties: The government not only allocates contracts to properly licensed and insured vendors, they do so on a bid basis. Now is the time to scour your local county commissioner’s office to bone up on what they will be looking for from vendors, how the bidding process is going to work, etc.

Government Buying Foreclosed Homes for Sale: Good Idea, or Not?

The government buying foreclosed homes for sale is a good thing, especially if you’re a qualified vendor who can capitalize on it. Also, it helps get the real estate market back on track, stops crime that tends to happen when homes sit empty for too long and strengthens property values for the community at large.

Get all the info you need to start your foreclosure cleaning business today, so you can capitalize on this unique opportunity — and be a part of the revitalization of your community.

It seems that everyone is pointing fingers during this foreclosure crisis. There are more foreclosure homes for sale than at any time during our history. And, according to the Business Week article, How Banks Are Worsening the Foreclosure Crisis, some of the fingers are pointing directly at banks.

. . . with 1 million residences having fallen into foreclosure since 2006, and an additional 5.9 million expected over the next four years (emphasis added). . . the industry hasn’t shown that kind of foresight [the willingness to work with borrowers]. . . One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem.

Foreclosure Homes for Sale: 3 Things Banks Can Do to Help Stem the Tide

Many get caught in the complicated speak of Wall Street when it comes to how to help the average homeowner keep their home. But, it really is not complicated. Following are three simple, straightforward ideas on how banks can get their heads out of the sand, help struggling homeowners keep their homes, which will help to stem the tide of foreclosure homes for sale flooding the market.

Banks No Help in Stemming the Tide of Foreclosures

1. Work with Borrowers: Even with many federal programs in place like Making Home Affordable incentivizing them to work with borrowers, many banks are not doing so. They need to go on a case-by-case basis and realize that the old lending standards, guidelines and rules that were in place before don’t apply now.

If a borrower’s ARM is about to kick in and they can prove that they can’t pay it, why not leave it at the old rate? Numbers don’t lie. If a borrower has been paying $1,100 on time, and his mortgage is about to take a $348 hike while his income has remained the same, why not just put him into a 30-year fixed rate that keeps his mortgage at $1,100?

Who wins by having this homeowner foreclosed on? Nobody. And, while those weren’t the original terms and it seems patently unfair to those who did the right thing and didn’t get in over their heads — is it going to fix it if this homeowner goes into foreclosure?

No. Nine times out of 10 it’s going to hurt him because when a neighbor goes into foreclosure it lowers the surrounding property values.

2. Give Fixed Rates: Speaking of fixed rates, banks should be more willing to give them out. Instead, they’re putting in place stop-gap measures, eg, a six-month modification, a year of interest-only payments that only prolong the situation in many cases. While this helps some in the short-term, it only forestalls the inevitable foreclosure in the long run.

In order for struggling homeowners to get on their feet, they need to know what their major monthly bills are going to look like one year, three years and five years from now. This helps them to move ahead with making solid plans to get their finances straight once and for all.

Rarely is six months or even a year enough to restructure and start making solid progress. For, just when it seems like you’re starting to get on your feet again, the higher rate kicks in and you’re struggling again. That’s why a lot of the temporary solutions that banks offer don’t work out and why so many homeowners choose to just walk away. They figure that it’s best to just get a fresh start without the burden of a mortgage they can’t afford and trying to deal with a bank that just won’t listen.

While this may seem unfair, unjust and even immoral to some — it doesn’t change the fact that it’s the truth. If you feel like you’re never going to “get ahead” and your lender is not willing to work with you, many think, why not just walk away?

And that’s why banks need to work with struggling homeonwers and start giving out 30 year, fixed-rate mortgages. Many banks are not even considering this because many struggling homeowners have less than perfect  credit. But one of the things that’s caused them to have it is paying a mortgage they can’t afford and can’t restructure. And again, this doesn’t make it right. But — many homeowners get it now.

They get that they have to get a hold of their finances; they get that they need to have an emergency fund; they get that they can’t have a $600 car payment on a $40,000 year salary.

Banks made out like bandits on subprime mortgages. The fees they collected gave some of them record profits. Now, the chickens have come home to roost — and we all have to pay for our gluttonous overspending. It’s time for banks to pony up too.

3. Reset Rates to Reflect Current Market Conditions: The last things banks can do is set mortgage rates to reflect a home’s current market value. Speculators and investors ran up prices of homes in certain areas (eg, California, Nevada) to prices that we now know were severely overpriced.

It may be 7, 10 or 12 years before those homes ever reach what they were bought for four, five or six years ago. And, this puts many homeowners under water, which means they can’t refinance.  These are some of the most extreme cases. Homeowners are stuck in homes they can’t afford — and can’t afford to leave.

And what are banks doing? Burying their heads.

Foreclosure Homes for Sale: Bankers, Get Your Heads Out of Your A**ses

Listen up bankers, if you want to start making money again from mortgages like Wells Fargo, it’s time to get real like most homeownes and consumers have.

Many homeowners are owning up to their parts in the mortgage crisis. They want to keep their homes and are willing to work with you. But you have to get your heads out of your a**ses and start dealing in reality like the rest of us. Otherwise, you might as well hang out your property preservation signs, because you’ll no longer be in the banking business, you’ll be in the property management business.

Copyright © 2009: Foreclosure Business News

It seems that everything bureaucrats touch, they mess up. In this case, it’s money that’s meant to help local communities stem the tide of foreclosures. The money is flowing into local city coffers, but many homeowners have yet to se the benefit.

The Neighborhood Stabilization Program: President Obama’s Plan to Help Homeowners Facing Foreclosure

The Neighborhood Stabilization Program was designed to “help shore up neighborhoods by having local governments buy, repair and sell distressed properties to low- and middle-income buyers. They can also rent properties that don’t sell,” according to the 4/8/08 Atlanta Journal Constitution article, Foreclosure aid program lacks results.

In July, Congress approved $4 billion under this plan to be dispersed to local communities throughout the nation. Georgia received $153 million of this money. Listed below is a complete, state-by-state breakdown of how much each state will receive under the Neighborhood Stabilization Program.

How Much Is Your State Getting & Can You Get HUD Contracts If You Have a Foreclosure Cleanup Company?

Foreclosure Cleaning Companies Ready to Go

Many foreclosure cleaning companies have been started by forward-thinking entrepreneurs around the country. They are raring to go – if only local city officials would get off their butts and start giving out contracts. After all, the money is there and so is the need. Foreclosed properties that sit abandoned invite crime – everything from vandalism to graffiti to illegal squatting.

Foreclosure Cleanup: City Officials Need to Get Moving!

City officials need to start contracting with local foreclosure cleanup companies to get houses cleaned up, secured and ready to be resold or rented. Neighborhood residents left behind deserve it; so do communities as a whole.

One of the quickest ways to get the real estate market – and the economy at large in many local communities — on the road to recovery is for local officials start using the taxpayer dollars the administration has set aside to handle foreclosures.

Are you listening local officials?

How Much Money Each State Received Under the Neighborhood Stabilization Program

Following is an approximation of how much money each state received under the Neighborhood Stabilization Program, in alphabetical order.

Alabama: $41 million
Alaska: $19.6 million
Arizona: $120 million
Arkansas: $19.6 million
California: $529 million
Colorado: $52 million
Connecticut: $25 million

Delaware: $19.6 million

District of Columbia: $2.8 million
Florida: $541 million

Georgia: $153 million
Hawaii: $19.6 million

Idaho: $19.6 million
Illinois: $172.5 million
Indiana: $150 million
Iowa: $21.6 million

Kansas: 20.9 million

Kentucky: $44 million

Louisiana: $34 million
Maine: $19.6 million
Maryland: $45 million
Massachusetts: $54 million

Michigan: $98.6 million

Minnesota: $38.8 million

Mississippi: $43.1 million

Missouri: $42.6 million
Montana: $19.6 million
Nebraska: $19.6 million
Nevada: $70 million
New Hampshire: $19.6 million

New Jersey: $63 million
New Mexico: $19.6 million

New York: $99 million
North Carolina: $57.7 million

North Dakota: $19.6 million
Ohio: $258 million

Oklahoma: $32.8 million
Oregon: $19.6 million
Pennsylvania: $88 million

Rhode Island: $19.6 million

South Carolina: $49 million

South Dakota: $19.6 million

Tennessee: $70 million

Texas: $178.1 million
Utah: $19.6 million

Vermont: $19.6 million

Virginia: $45 million

Washington: $28.1 million

West Virginia: $19.6 million

Wisconsin: $48 million
Wyoming: $19.6 million

Working with HUD: Info on How to Get Foreclosure Cleaning Contracts

Learn more about getting foreclosure cleaning contracts and working with HUD.

Copyright © 2009: Foreclosure Business News

Foreclosure cleaning is an excellent business to start — especially right now. Many get excited about it because they figure the work will flow in seamlessly. After all, “foreclosure homes for sale” signs are all over the place and it’s discussed on practically every newscast.

Well guess what buster, if you think foreclosure cleaning is a good business opportunity, so does your neighbor down the street, the guy in the cubicle across the way and the service station attendant you see when you pump gas twice a week. This means competition, which means you’re going to have to work to bring in the business.

Welcome to small business reality! You will spend about 80% of your time marketing when you first start a business — any type of business. Ask any successful small business owner how much time they spent marketing — and still do — and they will verify this.

Now that you know why your phone is not ringing with endless job orders, following is what you can do about it. Here are three concrete, cheap marketing ideas you can implement to start getting foreclosure cleaning jobs.

Foreclosure Cleanup: 3 Marketing Tips Guaranteed to Bring In the Business

Flyers: Hand deliver them to every place you even think can use the type of services you offer. This means more than realtor offices, but also junk haulers, insurance offices, mortgage firms, tax firms (they do work for all types of businesses, especially realtors), residential homes, etc.

Email: It’s easy to find the email addresses of realtors. Just go to realtor websites. Set up a full-on realtor email campaign. Contact 50, 100, or more per day. Now instead of focusing on foreclosure cleanup, pitch yourself as a real estate services firm. Why?

For one, realtors are inundated with foreclosure cleaning company literature. So to stand out, take a different tact. Introduce yourself as a full-service real estate property preservation firm. This not only helps your correspondence stand out, it prevents the realtors’ eyes from glazing over when they get yet another email from a foreclosure cleaning firm. It’s a subtle difference that can make all the difference.

Cold Calling: You know why cold calling is still the number one way to make a sale? Because it works. And, many hate to do it which is why if you do, you have a much better chance of landing jobs than your competitors.

Will it be easy? No. Will you get brushed off — a lot? Yes. Do you want to the business? Then pick up the phone. Make it a habit to make 5 or 10 cold calls a day. If you do 5 a day Monday through Friday, that’s 100 calls a month; 1,200 a year. The law of averages alone will land you some jobs.

Just because foreclosure cleaning is a hot business opportunity does not mean you don’t have to market to get the phone ringing. You do. This is why so many fail at owning small businesses. They get discouraged too easily. If you want to work for somebody else all your life, then fine, throw in the towel.

But if you want to make your foreclosure cleanup business a success, get off your butt and do the work it takes to get the phone ringing. There is plenty of work out there. Now go get it!

May be reprinted on your site, blog, newsletter, newspaper, etc., with the following attribution, in full: To learn everything you need to know to start a foreclosure cleaning business, log on to ForeclosureBusinessNews.com for 200 pages of first-hand information from the owner of a leading foreclosure cleanup company in Atlanta, GA.

© 2009 Yuwanda Black for Foreclosure Business News

Foreclosure cleaning companies aren’t the only ones profiting off the foreclosure crisis. As the New York Times article, Homeowners’ Hard Times Are Good for the Foreclosure Business, explains, realtors who handle foreclosures are cashing in also. Proof?

In 2006, there were 100,000 foreclosed homes on the market nationwide; presently, experts say, there are upwards of 700,000. And, according to the aforementioned article, ” the [foreclosure] flood will continue for several more years, and probably has not peaked yet.” Scary for homeowners. Good news for those who build a business on stats like these.

Foreclosure Realtors and Real Estate Investors Cashing In

Forget paying full price, REO is where it’s at. REO is the acronym for Real Estate Owned. It’s what banks call foreclosed properties (they don’t like to use the nasty phrase “foreclosure”). A whopping 45% of the homes sold this past February were REOs, according to the National Association of Realtors.

Cash for Keys: Get’em Out, Get It Listed and Get It Sold!

Never heard of the term? Cash for keys is a term realtors have given to homeowners they pay to move when a home has been foreclosed on. Why would  the do this you may be thinking. It’s quicker, easier and cheaper than going through the courts. This means realtors can get the property listed and sold quicker, which of course means more money from them.

Many realtors have switched the focus of their careers to capitalize on selling foreclosures, figuring that someone has to move these properties. Why not them?

Copyright © 2009: Foreclosure Business News

The governor of Illinois, Pat Quinn, recently signed legislation that gives struggling homeowners a 90-day grace period before the foreclosure process can officially begin. Here’s how the 90-day period allotted breaks down:

1st 30 days: If a homeowner is 30 days late, the lender can’t begin the foreclosure process.

2nd 30 days: In addition to not being able to start the foreclosure process, lenders are required to inform delinquent homeowners that they have 30 days to get credit counseling; if they don’t, then the lender can start the foreclosure process.

3rd 30 days: Homeowners who decide to get credit counseling are allotted an additional 30 days to put together a financial plan and present it to their lender. The caveat is, the credit counseling they seek must be approved by the HUD (the Department of Housing and Urban Development).

For more on this topic, read the HuffingtonPost.com article Foreclosure Grace Period Bill Signed Into Law.

What do you think? Is this a good idea? Will it help many homeowners stop foreclosure?

Copyright © 2009: Foreclosure Business News

According to the Business Week article, Subprime lenders sneak into new territory: Appraisals, appraisers played one of the less publicized roles in the foreclosure crisis. Often working in conjunction with lenders and/or mortgage brokers, they pumped up the value of homes to justify large mortgages. The appraisers and their cohorts made made hefty fees from each transaction.

Crooked appraisers and subprime lenders reinventing themselves as appraisal mgmt companies.

When the foreclosure crisis hit, the real estate industry as a whole started to be investigated by government officials. The inflation of home prices was, of course, discovered in many cases. This led to new regulation for the appraisal industry, slated to take effect on May 1st. It is a “government-approved code of conduct for appraisals.”

Appraisal Management Companies: The Same Crooks Feasting at the Table

The kicker is though, many of the appraisers and appraisal companies that participated in the inflation of home prices are now reinventing themselves as appraisal managment companies, thanks to a loophole in the new legislation. And, they’re being joined by many subprime lenders who are getting into the appraisal business.

Read the entire story of crooked appraisers and subprime lenders who are reappearing as appraisal management companies.

Copyright © 2009: Foreclosure Business News

Rent? Did you know that you can be evicted with little or no notice?

Almost a fifth (20%) of properties that are foreclosed on are rental properties;

That in many states, landlords are not required by law to give you notice that they are going into foreclosure; and that

If a landlord does go into foreclosure, you could be evictd with little to no notice.

Foreclosures and Renter Rights: A Way to Ward Off a Foreclosure Eviction

BUT, a new service by RealtyTrac, a leading real estate information service provider, is changing that. Now, you can in essence spy on your landlord to see if he’s paying his bills. The site touts that you can “protect yourself against an unexpected eviction” by at least arming yourself with information to ward off a foreclousre eviction.

How RealtyTrac’s Foreclosure Eviction Notice Service Works

Basically, a renter would sign up for the service, called RealtyTrac’s Renter Alerts. Then, via email, they are notified of “any foreclosure activity on a specific property.” They can take it from there, eg, move and/or talk to their landlord.

RealtyTrac’s Foreclosure Eviction Notice Service: Needed, or Not?

According the the press release announcing this Foreclosure Eviction Notice Service:

Skyrocketing foreclosure rates over the past two years have exposed hundreds of thousands of renters to evictions, even though many never missed rent payments. And many more renters living in distressed properties are also at risk of being evicted and ending up homeless.

Cost of RealtyTrac’s Foreclosure Eviction Notice Service

The serviced is $24.95 per year.

While some states are working to change the foreclosure laws as they relate to renters, they are essentially left out in the cold when it comes to foreclosure.

If you’re a renter, what’s your take? Would you pay for this service, or not?

Copyright © 2009: Foreclosure Business News

It seems that not only are homeowners walking away from homes they can no longer afford, banks are too. While it’s not widely publicized, it is happening. And, it’s leaving a lot of homeowners and neighborhoods stuck with the fallout of community blight, crime and other problems common to foreclosure homes.

Bank Walkaways: When Banks Walk Away from Foreclosed Properties

Why are banks walking away from many foreclosure properties? The New York Times article, Banks Starting to Walk Away on Foreclosures, explains, stating:

Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate. . . . The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches.

Bank Walkaways Leave Homeowners on the Hook

As the article states, many homeowners who are foreclosed on are frustrated at this process because it still leaves them on the hook for the property. Many wonder why they were foreclosed on in the first place if they are to be left holding the bag when the banks walk away.

Bank Walkaways: Problems Caused

In addition to homeowner frustration, when banks walk away from foreclosed properties, they caused a myriad of problems, eg:

Property maintenance: As in who’s responsible for keeping up the property until it can be cleaned, cleared, repaired and/or demolished.

Vandalism: When foreclosure homes for sale dot the landscape, it invites crime, vandalism, graffiti, and a host of other problems for residents left behind.

Declining Property Values: Because of the above, the homeowners left behind face declining property values. This is particularly acute because when there’s no verifiable owner/lender to hold responsible for the property, the longer it sits. The longer a home sits empty, the more likely crime is to follow.

What’s the solution?

Foreclosure Cleaning Companies: A Good Start in Preventing Crime on Foreclosed Properties

One of the first things that need to be done when a foreclosed property falls in limbo like this is to get it properly cleaned and secured. This means boarding up windows and doors, maintaining the lawn, and removing junk and debris. A full-service foreclosure cleanup company can do all of this.

Copyright © 2009: Foreclosure Business News

Foreclosure homes for sale dot communities across the United States – from low to middle class, and even high-end homes. And, many communities are starting to force city officials to make lenders responsible for cleaning up, clearing out, demolishing and/or maintaining foreclosures.

And, this is why many city governments are using federal monies recently allocated by President Obama’s administration to get communities back on track.

Foreclosure Cleaning Companies: Still Plenty of Work to Do  

Cities Using Federal (HUD) Funds to Clean Foreclosures

The Miami Herald article, As foreclosed properties spread, Miami-Dade springs into action, illustrates this perfectly, stating:

The U.S. Department of Housing and Urban Development pledged $161 million in grant money for South Florida cities. . . . Homestead, which is getting almost $3 million from the fund, plans to buy and rehabilitate [foreclosed upon] rental properties for low-income families, demolish damaged houses and provide down-payment assistance for single-family home buyers, said city spokeswoman Lillian Delgado.

Foreclosure Cleaning Business Owners: Think Beyond Single-Family Homes

As an aside, when many think of the foreclosure crisis, they think in terms of single-family homes. But, the foreclosure crisis affects landlords who own rental properties and commercial properties as well. And, many of these investors are walking away from their properties, as the above-mentioned article highlights. After all, a foreclosure is a foreclosure is a foreclosure.

This spells opportunity for those who offer foreclosure cleaning services. With federal funds flowing into local government coffers, many city officials are anxious to get the work done – for many reasons; primarily though, it’s because foreclosed properties are magnets for crime.

With money to pay for cleaning up, clearing out and maintaining foreclosed properties, foreclosure cleaning companies who vie for these jobs will be busy for some time to come.

Copyright © 2009: Foreclosure Business News