As we discussed in the last post on home foreclosures here, the Obama Administration’s prevent foreclosure program (HAMP) left a gaping hole — it didn’t address one of the largest problems many homeowners face — owing more on their home than it’s worth. This is known as being underwater.

According to recent statistics, some 11 million homeowners are underwater on their homes. This makes it practically impossible to refinance or modify their existing mortgages with traditional institutions like banks. Hence, the government intervention to help stem the tide of foreclosures.

Stopping Foreclosure: New Government Solutions to Help Underwater Homeowners

Now, the Obama Administration is trying to plug the “underwater” hole, offering up new fixes like:

Writing down principal balances to 115 percent of a home’s current value or less;

Offering forbearance periods for borrowers who become unemployed; and

Allowing owners to do short sales  and/or transferring ownership via the deed in lieu of foreclosure process.

Learn more in the article, Obama wields new tools to try, again, to stem home foreclosures.

Start a Business Cleaning /Trashing Out/Maintaining Foreclosed Properties

Learn how to operate a successful foreclosure cleaning business. Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

The Obama administration’s foreclosure program, HAMP, may be causing more homeowners to voluntarily walk away from their mortgages. This is according to a 3/23 report on HuffingtonPosting.com entitled, Average Homeowner In Obama Foreclosure Program Underwater, Yet Principal Cuts Rare.

Why More Homeowners Likely to Default Under the Obama Administration’s Foreclosure Prevention Program

According to the report,  the program is causing more homeowners to be underwater on their homes (ie, owe more on the home that it’s worth). And this is no small amount in some cases. The article states:

The average homeowner may owe their lender as much as two-and-a-half times more than the home is worth (emphasis added). . . The Treasury Department told government investigators that the average homeowner likely owes their lender about $1.14 for every $1 of the home’s current market value . . .

Hence, many homeowners feel like renters in their homes. Looking at the hard numbers, many take the view that it’s better to start over and rent than continue to stay in a home that is depreciating in value — and with no hope that it’s going to get better soon.

Help for Homeowners Who Are Underwater

In light of this, the administration recently funded a $1.5 billion pilot program for the five states that have had the biggest declines in home prices. This fund was set up to encourage state officials to experiment with solutions that will reduce the home foreclosure rate.

Many are hoping that one of those solutions is to implement widespread cuts in principals owed, which will encourage many homeowners to hang on to theri homes insterad of moving ahead with voluntary foreclosure (where a homeowner can afford to pay the mortgage, but decides to walk away anyway).

With More Foreclosures On the Way, Foreclosure Cleaning Businesses are Booming

Learn how to operate a successful foreclosure cleaning business. Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

New home builders are having a hard time these days, and many of them say the reason is that they can’t compete with the number of foreclosed homes on the marketing. Bob Jones, a home builder and the president of the National Association of Home Builders states:

The continual flow of distressed properties priced below the cost of production is having an adverse effect on new-home appraisals and also making it tough for builders’ customers to sell their existing homes . . .

More Home Foreclosures Coming Soon

A financial expert in the same article noted that in the coming months more home foreclosures are going to hit the market. This depresses already sagging home values, making it more difficult for existing homeowners to sell. And the Obama administration’s prevent foreclosure program, is not helping many homeonwers who want to modify their existing mortgages so that they can hang onto their homes.

What it all amounts to is one big mess that continues to plague homeonwers, whether they’re trying to sell, want to modify their existing mortgages or who just want to see the value return to homes they’ve worked so hard to maintain.

P.S.: Learn how to operate a successful foreclosure cleaning business. Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Foreclosure cleaning is a hot small business opportunity right now. And, smart entrepreneurs are realizing that it’s not just a good business to start right now, but one that is evergreen because as long as real estate is bought, sold and rented, there will be a need for the services that foreclosure cleanup businesses offer.

If you’re thinking about starting this kind of business but wonder if you have the time and capital needed, here are some guidelines for how to get started quickly and cheaply . . . even if you’re working fulltime.

Get Licensed and Insured: You simply can’t operate a foreclosure cleanup business without being licensed and insured. Why? Because your clients are going to be banks, realtors, mortgage companies, property management firms, etc.

They expect and require foreclosure cleaning companies that contract with to be licensed and insured. It’s to protect them – and you. So get it before you start.

FYI, regarding insurance, if you’re going to hire workers, you’re going to need workman’s comp insurance. What’s required in the way of insurance for your foreclosure clean up business varies from state to state. To find out what you need, speak with your insurance agent and tell them on the kind of business you will be starting, the types of services you’ll be offering and whether or not you’re going to be hiring workers. They’ll instruct you on what’s required.

Offer Services You Can Do Yourself: Foreclosure cleaning is the type of business where you can offer a range of services – everything from lawn maintenance to painting to installing sheetrock to cutting tree branches.  This is one of the reasons it’s such a lucrative business opportunity by the way; there are simply so many ways to make money.

But, to start quickly and cheaply (ie, not having to hire workers), only offer the services you can handle yourself.

For example, if you don’t have any skills, just offer to do lawn maintenance and general trashouts. Everyone knows how to cut a lawn and remove trash and debris, right?

As you learn more and/or subcontract with other firms, you can add on more services. But, by starting with just what you know how to do, you’ll never have to worry about hiring workers and/or depending on somebody else to complete a job before you can get paid.  

Do Grassroots Marketing: With the advent of the internet, you don’t have to spend a penny on marketing your foreclosure cleanup business. Send emails to realtors, bankers, property preservation companies, etc.

And, if you have a computer and printer at home (and most do these days), make up cheap flyers and hand them out in your area. Also, visit your local chamber of commerce and network for free. Eventually, they’ll want you to sign up, but you’ should be able to attend a few meetings for free.

As the Chamber of Commerce is where all the small business owners in a community are, you can get leads from many different types of business owners, eg, realtors, appraisers, bankers, etc.

Foreclosure Cleaning Business Marketing Tip: Make a certain number of contacts every week. For example, if you send out at least 20 emails a day (M-F), that’s 400 contacts a month; 4,800 a year. With just a 1% return, that’s 48 jobs a year – or approximately one a week.

If you averaged just $500 on each job — and that is extremely low – that’s $24,000 per year. Not bad for a “part time” business, right?

And, this is how you have to think of marketing. It’s a numbers game. The more stuff you put out, the more likely you are to land jobs. Any successful sales person will tell you this.

Schedule Jobs on the Weekends and Evenings: This will probably be the hardest thing to do, as most clients will want any foreclosure cleaning jobs they hire you for completed as soon as possible. But, if you can schedule a job to be done right away, even if it means going directly from your 9 to 5 job to a property and working until midnight or later, you will be able start making money and building your client list that much sooner.

Ask for Referrals: After every job you do, get in the habit of asking how they heard about you and can they refer any other business your way. This must, must, must become a habit. Sometimes, you’ll get a foreclosure cleaning job or a referral just because you asked this one simple question.

Grow Your Foreclosure Cleanup Business with Government Contracts

Read the story of how one janitorial cleaning service grew revenues from $225,000 to over $10 million — all because of government contracts. So, sign up and get on the road to landing lucrative government contracts from local and federal agencies today.

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

According to a news clip on Zillow.com, the Harper family, who received help from HGTV’s Extreme Home Makeover team in 2005, recently held a raffle to try to avoid foreclosure. Apparently, the Georgia-based family ran into trouble when they took out a 450,000 loan against their 6,000+ sq ft home to start a business that floundered.

The Harper family isn’ the is isn’t the only Extreme Home Makeover family to run into home foreclosure trouble. According to an article on Yahoo.com, four other families helped by the popular TV show have faced foreclosure. The article states:

The Woffords aren’t the first family featured on the show to face serious financial problems after their home makeover. The Harper family of Atlanta [mentioned above], who received the show’s biggest house to date, along with the money to pay taxes on it for 25 years, famously faced foreclosure last year after taking out an ill-advised $450,000 loan using the house as equity. And at least four other “Extreme Makeover” recipient families have had to sell or lose the homes they won on the show.

The solution, as the article suggests, may be changing the rules so that not only aren’t the homes remodeled so lavishly, but so that recipients can’t take out any equity from them — at least for a certain amount  of time.

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Yet another saga is confronting homeowners who are losing their properties to foreclosure across the country. Squatters are taking up residence in foreclosed homes across the nation; frustrating already weary homeowners.

According to a Seattle, Washington-based area news report:

. . . strangers move in and claim they can live there! It’s happening all over the country - people moving in to vacant homes claiming they’re abandoned.

Many of these homes are being rented out by unscrupulous property management companies under the guise that they have been “abandoned,” which is patently untrue and is also illegal.

If you’re looking to rent a home and want to prevent this happening to you, do some checking to make sure the home is not in foreclosure . . . and that the property managment company you’re renting from is indeed a legal enterprise and doesn’t have any charges levelled against it from the Better Business Bureau, for example.

Make Money in the Home Foreclosure Market

Learn how to register with your local housing authority to get foreclosure cleaning jobs (and other RE services related work, eg, painting work, plumbing jobs, general contracting work, lawn maintenance contracts, etc.).

Read the story of how one janitorial cleaning service grew revenues from $225,000 to over $10 million — all because of government contracts. So, sign up and get on the road to landing lucrative government contracts from local and federal agencies today.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

When you start a foreclosure clean up business, there are going to be times when you’re going to have to hire help. If you’ve never done this before, it can literally devour your profits and ruin your business reputation.

Following are a few things to keep in mind when hiring help to assist you in your foreclosure cleaning business.

1. Use a Staffing Agency: One of the easiest ways to hire workers – quickly – is to go through a staffing agency. Agencies like Labor Ready are ideal for staffing the types of jobs foreclosure cleaning companies handle because they specialize in providing staff in industries like construction, cleaning, lawn care, etc.

Going through an agency is beneficial because they handle all the upfront paperwork, employee screening, drug testing, etc. You tell them what you need and they supply the workers. You pay them and they pay the workers. You don’t have to worry about W2s, 1099s, checking references, etc.

While this is a simple, quick way to hire the help you need, it is not without its drawback.  One of the main drawbacks is that you’ll most likely be paying workers by the hour. Hence, if you misjudge how long it’s going to take you to do a job, it can eat into your profits. For example, if you’ve estimated that it’s going to take 7 hours to complete a job, but it winds up taking 10, then that’s more money out of your pocket.

And, if you have to pay say two workers, that’s six extra hours of work. If you’re paying each worker $10/hour, that’s an extra $60 – directly out of your profits.

Hence, you it’s important to be as precise as possible when putting together your foreclosure cleaning bid. Be sure to build in enough of a profit so that if a job runs over in time, it doesn’t eat up too much of your profits.

Note: When hiring labor from a staffing agency, ask about each worker’s work history with the agency, eg, how long have they temped through the agency; how many times have they been sent out in the last few months; what’s the feedback from other clients; etc.

The reason you want to do this is, recruiters work on commission (I know, I was a recruiter for over a decade). So it’s to their benefit to have as many workers on someone’s payroll as possible. Sometimes, they may not do their due diligence in checking a worker’s history. This is particularly true with day laborers, the kind of workers you’ll likely be using.

A worker could literally have walked through their doors yesterday and if your job order crosses their desk and it seems like a fit, they’ll send them out to you. This is before any background or reference checks have been done.

So be sure to ask. Remember, it’s your foreclosure cleaning businesses’ reputation that’s on the line.

2. Don’t Rely on Friends and Family: Many small business owners – and foreclosure cleaning business owners are no different — make the mistake of hiring friends and family.

This can be a huge mistake, for it can not only damage your personal relationships, but it can damage your business reputation as well.

Remember, you’re operating a business – your very livelihood. And, you’re not a friend or family member when you’re working. You’re officially the boss.

Some  friends and family can’t make the transition form “family/friend” to “employee.” For example, what if you have to ask them to redo something that wasn’t done correctly the first time. Or, if you have to ask them to stay later because the job is taking longer than expected.

What if they refuse?

See how easily this can cause problems.

It’s just too risky to mix business with personal relationships. Where possible, avoid it at all costs.

3. Pay a Fair Wage: Just because you may be able to get away with paying minimum wage, it doesn’t mean you should. Build a decent wage into your foreclosure cleaning bid so that you can fairly pay workers. Remember, this type of work can be backbreaking.

Paying a little more will give your company a good reputation so that when it’s time for you to hire, you will have loyal workers who will not only do a good job for you, but they’ll recommend others to you on that basis also.

If you keep these things in mind when staffing your foreclosure cleaning businesses’ jobs, you should have no problem hiring competent, affordable help – quickly.

P.S.: Learn more about how to operate a successful foreclosure cleaning business.Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Are you facing home foreclosure? Did you know that banks have to “produce the note” that proves that you owe the debt? This report shows that a whopping 40% of the time, banks have lost the paperwork (eg, the promissory note). And, this can be your best defense for stopping foreclosure.

40% of lenders unable to produce promissory notes that prove homeowners they’re trying to foreclose on indeed owe the debt.

If you know anything about debt collection, one of the first things a creditor must do is prove that you indeed owe the debt. If they can’t prove it, then you can stop the foreclosure process.

A home foreclosure expert in the video says don’t let the lender off easily if they’re trying to foreclose on your proeprty. “Make them produce the note,” he says. In the video, 14 homeowners in Florida were able to prevent foreclosure — at least for the time being — until their lender could produce the note.

Watch this eye-opening, June 23, 2008 CNN report on using this method to prevent foreclosure.

P.S.: Get info on 32 ways to stop foreclosure: Discover what banks won’t tell you & investors don’t want you to know.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Banks have been failing in the U.S. in record numbers since the mortgage crisis hit with full force in 2007. Proof? In the first two months of 2010, over 20 banks have already failed? This puts us on tap to at least match 2009 bank failures, which topped out at 140.

To put this in some kind of perspective, only 25 banks faltered in 2008, which was still a lot, especially when you consider that only 32 banks failed from 2000 through 2007.

While no one likes to hear of banks failing in communities across the country, it can be good news for foreclosure cleaning companies and others who operate real estate service businesses like general contractors, painters, electricians, and plumbers. Why?

To understand fully, it helps to know what happens when a bank fails.

Insight for Foreclosure Cleaning Biz Owners: What Happens When a Bank Fails

When a bank fails, it first falls in the hands of the Federal Deposit Insurance Corporation (the FDIC). Then, they usually go on to be bought or taken over by other banks and/or financial institutions because they have assets and customers who still need to be serviced.  This is, in part, why you see the FDIC seal in every bank. The FDIC protects the assets of every day consumers in case a bank fails.

Who to Target When a Bank Fails to Get Ongoing Foreclosure Cleanup Jobs

Oftentimes, once a failed bank is taken over by the FDIC, they contract with larger property preservation companies to handle the maintenance of the failed bank’s real estate assets (eg, foreclosed homes, foreclosed commercial properties, etc.).

And this is where it gets interesting for you, the small to mid-sized foreclosure cleanup business owner. You see, these large property preservation companies are backlogged. They are taking way too long to service all of the properties assigned to them.

These properties can’t sit vacant/abandoned because the bank that owned them failed. They need to be maintained so that they can be put back on the market to be resold. This means they need inspections, yards cut, shrubs trimmed, winterization, boarding up, lock changes, etc.

When you add to this that every time a bank fails more properties are dumped in larger property preservation companies laps, it’s easy to see why they are so backlogged.

So . . . what do they do? The contract with small to mid-sized foreclosure cleaning companies (like yours!) to help them at least try to keep up.

If you’re one of the lucky ones to be properly set up as a foreclosure clean up business – ie, licensed and insured — you can target those handling failed banks to get work.

Who to Target When a Bank Fails to Get Ongoing Foreclosure Cleanup Jobs

As a foreclosure cleanup business owner, you would contact the REO asset managers within acquiring institutions (ie, the FDIC or whichever institution took over the assets of the failed bank).

While it may take some elbow grease to get through to them, getting an “in” with just one of these companies can provide you with all the foreclosure cleaning jobs you will ever need. So it’s definitely worth it to put in the time it takes.

Partial List of Failed Banks in the First Two Months of 2010

Following is a partial list of the banks that have failed as of March 1, 2010 in the U.S.

Horizon Bank, Bellingham, WA, Jan 8

Town Community Bank & Trust, Antioch, IL, Jan 15

Premier American Bank, Miami, FL, Jan 22

Charter Bank, Santa Fe, NM, Jan 22,

First National Bank of Georgia, Carrolton, GA, Jan 29

1^st American State Bank of Minnesota, Hancock, MN, Feb 5

The La Coste National Bank, La Coste, TX, Feb 19

George Washington Savings Bank, Orland Park, IL, Feb 19

Carson River Community Bank, Carson City, NV, Feb 19

Rainier Pacific Bank, Tacoma, WA, Feb 26

Full List of Failed Banks

To see the full list of failed banks, visit the FDIC’s failed bank list. This is good information to know as a foreclosure cleanup business owner.

According to the BusinessWeek.com article, Obama May Prohibit Home-Loan Foreclosures Without HAMP Review, the Obama consideration has put forth a proposal to stop lenders from foreclosing on homeowners — at least until they have been screened and rejected by the government’s HAMP program.

The article states:

The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed . . .

Prevent Foreclosure: What is HAMP?

HAMP is the administration’s Home Affordable Modification Program. The program is available for home loans that were taken out prior to January 1, 2009. It will expire on December 31, 2012.

Find out if you are eligible for a home loan modification or refinancing via HAMP.

Make Money in Home Foreclosures

Learn how to register with your local housing authority to get foreclosure cleaning jobs (and other RE services related work, eg, painting work, plumbing jobs, general contracting work, lawn maintenance contracts, etc.).