Unless you’re in the real estate business – and deal with foreclosed properties specifically – most have no idea what happens when a home is foreclosed on. Right now, there’s somewhat of a turf war going on when it comes to dealing with foreclosed properties. All eyes are on Illinois because new legislation around who actually conducts foreclosure auctions affects homeowners directly.

This presents an opportunity for astute foreclosure clean up business owners.

BUT . . . one of the main reasons we bring this to your attention is to enlighten homeowners who have been, or are about to be foreclosed on, of how this new home foreclosure legislation could affect them.

Who Evicts Homeowners When a Home is Foreclosed On

As explained in the ChicagoTimes.com article, Illinois lawmakers have 2nd thought about foreclosure bill:

When a foreclosure is filed in court, judges appoint someone — typically the local sheriff’s office — to oversee the proceedings, from handling the eviction to filing paperwork and reselling the home.

And, this is where the power struggle ensues. You see, local counties around the country routinely charge for their involvement in the home foreclosure process (eg, handling evictions, etc.). They call these “administrative fees” and often runs a few hundred bucks. This money goes back into the county’s general fund.

And, with the loss of property tax money that disappears when a homeowner defaults on their mortgage, a lot of counties are hurting for money now. Furthermore, as the above-mentioned article points out, local municipalities are literally raking in from $1 to a few million dollars a year in these foreclosure “administrative” fees.

And this is why they don’t want private companies – who are vying for this business – to take over. This is what the new law will do. As the article explains:

The new bill would tweak the existing law by transferring power from judges to the plaintiffs — banks or mortgage lenders — who could streamline the sales process and avoid paying county administrative fees by hiring a private company to mediate the foreclosure.

Foreclosure Cleanup Business Tip: Many counties use some of these funds to hire foreclosure cleaning businesses to trashout/maintain foreclosed properties).

How the Newly Proposed Illinois Foreclosure Bill Could Affect Homeowners

Time Equals Money: And face it, anytime the government – on any level is involved with a procedure – the wheels grind slowly. So the argument put up by private companies is, we can get a property back on the market and ready to be sold quicker than if a home was handled as a “Sheriff’s sale”.

Property Value: This protects surrounding property values. A foreclosure in a community affects everyone’s property value. But, the quicker a home is resold, the better for the whole neighborhood because then home values can start to stabilize, which is the first step to recovery.

Save More Homes: Another argument put forth by private firms that auction off foreclosed properties is that if the foreclosure process is handled quicker, many homeowners may be able to work things out with their lender to perhaps even save their home.

I don’t know if this particular argument holds water, as most homeowners need MORE time to save their homes during the foreclosure process; not less.

Neighborhood Safety: The final argument put forth by private companies who want to handle the sale of foreclosed properties is that it will SAVE counties money. Why/how? Well, again, the quicker a home is resold, the less money the county has to spend to maintain the property.

When a property is foreclosed on, it could spend months or even a couple of years in this market, before it is resold or rented. The longer it’s empty, the more chance there is for trouble – everything from vagrants and vandals to general maintenance problems.

Read How Foreclosure Cleanup Companies Are Keeping Neighborhoods Safe.

So while it all seems to be a “money grab” — to use the words of one attorney who heads a company that conducts foreclosure auctions – on both sides, private companies just may be a bit better equipped to handle the job.

What do you think?

Foreclosure Cleanup Business Owners: How This Law Could Benefit You

This presents another golden opportunity for foreclosure cleanup business owners, for it’s another pipeline to more business. How/why?

Contact title companies, foreclosure attorneys and even your local sheriff’s office and let them know you’re available to handle trashouts, lawn maintenance, boarding up and securing of foreclosed properties, etc. Because, when a home is foreclosed on, all of these foreclosure-type services are definitely needed.

Related Posts

Home Foreclosure Auctions: The Biggest Advantage and Disadvantage of Them

How to Register Your Foreclosure Cleaning Business with Your Local Housing Authority for Contracting Opportunities

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

P.S.: Finally, an easier way to get foreclosure cleanup work is here. The Property Preservation & Real Estate Industry Contracting & Subcontracting Directory includes over 1,500 industry contacts to help you get more work - quicker and easier.

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.

If you’re trying to prevent foreclosure, one of the things you may encounter when you start getting behind is a mortgage payment you send in being sent BACK to you (yes, the bank giving you your money back). In essence, they start refusing to accept your mortgage payments — and seek to escalate the foreclosure process.

This is one of the reasons many homeowners get convinced that banks “want” their homes, which is not true. They want you to pay them back the money they lent you to get the house. “So,” you may be thinking, “why would they refuse to accept mortgage payments if they’re not trying to take my house from me?”

Following is why – and what to do about it.

Prevent Foreclosure: How to Get Banks to Start Accepting Your Mortgage Payments Again

When banks stop accepting your mortgage payments, it’s usually because you are severely behind. So you may start sending in partial payments – ie, doing the best you can to send them as much as you can. But, many will say that they don’t accept partial payments. They’ll tell you that the full amount you’re in arrears for (the full balance you’re late on), or they’re going to move ahead with foreclosing on your home.

So somehow, you beg, borrow and scrimp to come up with this amount. But, they STILL won’t accept it. Why? Because usually another month or so has passed and you owe additional monies for this time (ie, the full balance you owe has escalated). So, they send BACK the monies you sent in thinking that you’ve finally saved your home from foreclosure.

But, the foreclosure process proceeds.

At this point you are probably scared as heck and wondering what you’re gonna do. The first thing is not to panic. There’s still hope. Following are two solutions.

1. Work with the Bank: Now, banks are more amenable than ever to working with homeowners to prevent foreclosure because so many of them are simply walking away from their homes (eg, doing voluntary foreclosures).

Ask them for a payment plan – that you know you can afford to adhere to – to catch up the arrears. Be prepared to provide a lot of financial data, eg, recent pay stubs, other bills owed, total household income, savings and investment account info, etc.

They will almost always try to get you to pay more than you know that you can – so don’t agree to it. BUT, do stretch if you have to if they’re willing to work with you. Cancel cable, cut down on the number of cell phones, trade in an expensive car for a used one. In short, do everything in your power to meet your payment plan stipulations – if they put you on an arrears payment plan.

What these plans do is allow you to pay part of your arrears now, and the rest over time. Sometimes you’ll have months to pay off the rest; other times a lender will spread those payments out over the life of the loan.

So it’s worth asking – again and again – your bank to work with you to get this type of plan.

If, however, your bank refuses to work with you, you may need assistance.

2. Work with a “Prevent Foreclosure” Specialist: There are many nonprofit organizations out there. DON’T – whatever you do – go out and find one of these paid firms who guarantee that they can help you save your home. A lot of them are shysters. We’ve discussed it here on this blog.

Following are a few posts you can refer to to prevent being taken advantage of if you’re trying to prevent foreclosure.

Home Foreclosure Scams: Attorney General Cracks Down on Firms Preying on Desperate Homeowners Facing Foreclosure

Foreclosure Scams: 5 Things to Look for Before Using Any Company That Promises to Help You Stop Foreclosure

How to Find Foreclosure Specialists to Help You Prevent Foreclosure

Foreclosure prevention specialists can help you do everything we just talked about above. But, they may be able to accomplish it quicker and easier than you doing it yourself. This is because they know how banks operate and what their “pain points,” for lack of a better term, is.

To get “scam-free” stop foreclosure help, visit HUD’s website and conduct a search for HUD-approved housing counseling agencies. You can also call. The number is 877-HUD-1515 (877-483-1515).

Good luck in stopping foreclosure.

Other Helpful Reading on Stopping Foreclosure

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

Prevent Foreclosure Warning: Don’t miss a payment if you are lucky enough to get an arrears payment plan. If you do, the lender can start the foreclosure process where it left off, and lenders are highly unwilling to work with homeowners again who haven’t stuck to a previous agreement.

Remember, when all else fails, you may still be able to prevent foreclosure by filing Chapter 13 bankruptcy.

P.S.: Start a business cleaning foreclosures — learn 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.

As we discussed at length in the last post here, 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012. One of the first things a lender has to do when a property is foreclosed on is have it secured.

This presents an excellent opportunity for foreclosure business owners to get in this type of business — quick, start making money right away — and all without spending a lot of money. Why/how?

Starting a Foreclosure Cleanup Business — On the Cheap

Foreclosure cleanup business owners can offer a range of services - everthing from pool cleaning and draining to general contracting (eg, putting up walls, repair broken windows and cabinets, replacing tile, etc.). However, some services require skill (and tools and licensing and experience) that many who want to capitalize on this small businesss opportunity don’t have.

But, almost anyone can offer simple securing of homes.

All most lenders want done is for windows to be boarded up, and locks to be changed on doors. Following is a little more info about what HUD requirements are for securing homes. Note: All of this info is provided in detail in the Foreclosure Cleanup Pricing Guide.

Excerpt: HUD Requirements for Securing (eg, Boarding Up Windows and Doors) on a Home 

When boarding is appropriate, all first floor doors and windows, including all basement windows and doors, should have plywood covering the entire opening and frame.  The covering should be secured with carriage bolts.  Eliminate any possible hazards that may be caused by protruding bolts used to secure boarding.  The use of nails is prohibited.

A lot of the specifications from HUD for securing (and other types of work, eg, trashouts and debris removal) vary by location. All of this detail is provided in the Pricing Guide.

Hurricane Season in the Southeast — A Good Way to Pitch Banks/Lenders about Securing Homes

It’s hurricane season in the southeast right now. And, according to a June 2009 article on CarolinaLive.com entitled Securing foreclosed homes during hurricane season:

More than 280,000 homes [were] in foreclosure in coastal counties in nine southeastern states.

That’s only going to get worse as the foreclosure crisis deepens. Hence, it’s a unique way to pitch lenders and realtors about securing foreclosed properties they own/handle. You’ll get a leg up on the competition because it demonstrates that you are in tune with what they’re going through and what they need handled. 

The bottom line is, if you want to start a foreclosure cleaning business — you dont’ have to start with a full range of services. Simple securing homes — a much-needed service for the next couple of years — can be an easy way to start this business — and start making some money right away.

P.S.: While the home foreclosure crisis has meant heartbreak for many, it’s meant opportunity for others. 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.

Home Foreclosures Rising for Prime Borrowers

 

As we’ve talked about here on this blog ad nauseam, the home foreclosure crisis is now affecting those with previously good credit, ie, the average Joe who had a steady job, good credit and always paid his bills on time.

 

 

Now, with home prices continuing to plummet and the “jobless recovery” making it hard for those who’ve been laid off/lost a job to find new work, it’s these – the middle class who seems to hold everything together in this country – who are suffering.

 

Who’s coming to their rescue?

 

Home Foreclosure: Why the Average Joe Is in Deep Doo Doo

 

According to the article, Foreclosure crisis phase 2: The negative equity dilemma:

  

“In the next 12 months it’s going to be tragic – most people are just starting to fall behind now … According to the Center for Responsible Lending, a nonprofit research and policy group, as many as 9 million homeowners could go into foreclosure between 2009 and 2012.”

 

As the title of the article alludes to, the middle class homeowner is in a financial pickle like never before. They’ve lost jobs – and equity in their homes at the same time. Without equity, they can’t refinance, sell or take out a home equity loan.

 

Many middle-class homeowners are accustomed to being able “tap their home for equity” (eg, take out a home equity loan/line of credit) when things get tough or they need extra cash to send the kids to college, pay for a new roof, or pay for an unexpected illness not covered by insurance, for example.

 

That option is gone.

 

 

Will the Government Rescue “The Average Joe” from Home Foreclosure?

 

So, what’s the solution? There is one, as discussed in the aforementioned option, but it’s controversial on many levels.

 

An option that’s being floated is for “banks to write off part of homeowners’ troubled loans” (ie, write down principal balances to help homeowners keep their homes). But, of course, they don’t want to do this. This is AFTER we’ve bailed their a**es out.

 

But if the government doesn’t step in to help, or banks don’t come to their darn senses, the outcome is going to be the same because if a homeowner doesn’t have the means to pay, then the home is going to be foreclosed on anyway.

 

This means the bank will probably have to sell it as a short sale, which means that, on average, they will be getting 20%  less than what it’s worth any way. Note: On average, when a home is sold as a short sale, it’s sold for about 20% less than what it’s worth.

 

In this market, I’d argue that they’re going to be losing even more because some homeowners have lost 25%, 30% or 40% of the value of their homes.

  

Home Foreclosures: Many Homeowners Have Lost More than Half the Value of Their Property

 

A friend of mine who owns property in a suburb of Atlanta was checking home prices in her neighborhood and she found out that there’s a six-bedroom home in the community going for . . . are you ready for this $129,000.

Just five or six years ago, the homes in the community were selling for $160,000 to $200,000. Now they’re selling for as low as $110,000 — these are 3-6 bedroom homes in a lake community.

 

Now you tell me, why wouldn’t a bank work with a homeowner to keep them in their home – in a community they’re already invested in?

 

While some may argue that writing down principal balances is not fair to other homeowners (and it’s definitely not), the point is, it’s a done deal. When a home is foreclosed on in a neighborhood (and subsequently sold as a short sale, for example), the neighbors lose value in their homes anyway.

 

And I keep coming back to this — WE the American people – bailed out these big banks. They got to get a lot of the “bad assets,” which were primarily subprime loans when this whole foreclosure crisis started, off their books.

 

Why doesn’t the Average Joe get the same kind of help to help him prevent foreclosure?

 

Stop Foreclosure: Learn the #1 secret your lender won’t tell you that can prevent foreclosure.

P.S.: While the home foreclosure crisis has meant heartbreak for many, it’s meant opportunity for others. 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.

If you’re facing home foreclosure, there’s a high probability you’re having trouble paying other bills as well, eg, your car loan, your student loan, etc. And, this is what makes what I’m about to tell you so scary.

Home Foreclosure & Your Finances: Why You Need to Be Worried if You Have Multiple Loans with One Bank

Many consumers today practice what banks refer to as “relationship” banking. They may take out multiple loans with the same institution. Namely, it’s because banks “reward” consumers by offering them lower rates on other loans (eg, car loans, student loans, home equity loans).

But this can be dangerous if you’re in financial trouble. Because of a banking law (that most consumers have never even heard of, mind you) known as the right of setoff or offset. What is it?

The Little-Known Law That Allows Banks to Wipe Out Your Bank Account — Without Notifying You First

The “Right of Offset” the legal right of a bank to seize deposited funds (eg, in your checking or savings account) to cover a loan that is in default.

So for example, let’s say you have a home loan, car loan and student loan with a bank. If you’re significantly late on your student loan, your bank can seize the funds in your checking or savings account to cover this loan.

That’s exactly what happened to the Atlanta, GA resident in the AJC.com article, “Suddenly, bank account was gone.”

Trying to Stop Foreclosure & Have Other Loans with the Bank that Holds Your Mortgage? Advice on What to Do 

I guess the moral of this story is that if you’re facing home foreclosure, which means your finances are not solid, protect the few funds you have from being seized in case you have to move, pay back taxes, take legal action like filing bankruptcy to stop foreclosure, etc.

Learn more about the Right of Offset in the YouTube video below.

P.S.: Finally, an easier way to get foreclosure cleanup work is here. The Property Preservation & Real Estate Industry Contracting & Subcontracting Directory includes over 1,500 industry contacts to help you get more work - quicker and easier.

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.