Home Foreclosure News of the Day: Bank of America to Pay $20 Million for Illegally Foreclosing on Military Homeowners

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

According to the MSNBC.com article, Bank of America Settles Lawsuit; UBS, Citigroup and Goldman Predict a Nervous Market, Bank of America has reached a settlement deal with the Justice Department, which sued the banking giant for illegally foreclosing on over 150 military personnel. The article states:

Bank of America Corp. (BAC) has reached a deal to pay $20 million to end a lawsuit by the U.S. Department of Justice revolving around the bank’s failure to constantly check the military status of borrowers on whom it foreclosed through May 31, 2009. The Justice Department suspected Countrywide foreclosed on 160 servicemen. Among the victims were individuals who have served in Iraq and Afghanistan.

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The U.S. Department of Justice filed the suit against BAC Home Loans Servicing, formerly known as Countrywide Home Loans Servicing, alleging that it knew, or should have known, about their military status. [Source: BizJournals.com, Bank of America to pay $20M over foreclosures.]

The news couldn’t come at a more fitting time for the country’s vets, as the nation celebrated Memorial Day yesterday.

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Foreclosure Scams: How to Avoid Being Ripped Off by “Foreclosure Rescue” Companies

How to Stop Home Foreclosure For Over 2 Years Without Making Payments: Do it Yourself for Free — Here’s How

Stopping Foreclosure: What to Do When the Bank Refuses to Accept Your Mortgage Payments & Tries to Escalate the Home Foreclosure Process

Foreclosure Lawyer: Need One? How Not to Get Ripped Off & Choose the Best One

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

Stopping Foreclosure: What the “Produce the Note” Defense Is & How It Can Help You Save Your Home from Foreclosure (Or at Least Stall)

Prevent Foreclosure Advice: Was Your Home Loan Legal? Get a Forensic Loan Audit to Find Out

P.S.: Bank Failures Can Mean Big Business for Foreclosure Cleaning Businesses! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Help for Veterans and Military Families on How to Prevent Foreclosure

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

As Americans celebrate this Memorial Day and honor our troops, many don’t realize one of the deadliest enemies our soldiers face is right here at home. What is it? Debt – and much of it is due to predatory lending practices – not only on home loans, but for everything from cars to other types of consumer debt.

Military Families Facing Foreclosure Undermines National Security

Soldiers face a double whammy when it comes to home foreclosure and debt. Not only do they have to worry about the present, their careers are at risk also.

To explain, when a soldier is worried about bills and the roof over the heads of their loved ones back home, it can make it hard to concentrate on day-to-day duties. This can be deadly, not only for them, but for their comrades as well. This is the present threat.

The future threat is job stability. Many civilians don’t know it, but a lot of the jobs that veterans seek to advance their careers require credit checks. Not only can a soldier be denied security clearance if their credit is not good, they can be discharged and/or jailed as well. Proof?

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The Sacramento Bee article on Military.com, The Downturn: For Many in Military, Finances are a Battlefield, states:

Under military law, service members can be discharged or even jailed for running up excessive amounts of debt. And chronic debt-to-income imbalances can jeopardize their national security clearance. . . . According to a 2007 California task force report, the number of U.S. Navy discharges due to debt increased a whopping 903 percent, from 194 in 2000 to 1,999 in 2005.

The Home Foreclosure Statistics of American Military Personnel

According to the article, Military families fight battle at home against foreclosure, while many of our soldiers risk their lives abroad, many of their families are fighting a battle of their own back home – trying to prevent foreclosure. The articles states:

More than 20,000 veterans, active-duty troops and reservists who took out special government-backed mortgages lost their homes last year [2010], the highest number since 2003.

And according to the USA Today article, 20,000 military members, vets faced foreclosure in 2010:

About 12,000 military families applied to the Pentagon’s expanded Homeowners Assistance Program. It makes up most of the difference in price for service members who must transfer and sell their homes for less than they owe, or buys their houses outright. . . . Our demand, in terms of (military) families coming to us for assistance, went up 19% in 2010 over the previous year,” says Bill Nelson, executive director of USA Cares . . .

Tips for Military Recruits on How to Avoid Foreclosure

If you’re in the service, or are thinking about going, following are some tips to help you avoid getting caught up in the home foreclosure crisis.

Delay Home Ownership: Just because you can buy a home doesn’t mean that you should. This is especially true if you’re young in your military career and/or are being moved around a lot (eg, every 2-3 years).

Don’t feel forced because of what the market is doing (eg, there are so many good deals on the market). When the time is right, the deals will still be there. Sure, they may be harder to find, but as long as you’re doing what you’re supposed to in the meantime (eg, saving, protecting your credit), you’ll be able to buy when the time is right. And, speaking of saving . . .

Get in the Habit of Saving: Learn money skills. As many of the articles linked to in this post point out, many soldiers (like most civilians) are have woefully underdeveloped money skills. So, while you have a steady paycheck and great benefits, learn how to handle money.

A big part of this is to make saving a habit. Save a percentage of everything you make. And, live within a budget; this means living below your means. If you can just do these two things, you’ll be in excellent shape to buy a home when the time is right – without fear of facing foreclosure in the future.

Save a Decent Down Payment: While you may qualify for a lower down payment with a VA loan, still save a decent down payment – at least 20 percent should be the goal. This way, you avoid having to carry private mortgage insurance (PMI), which can add hundreds per month to a mortgage payment, depending on the price of the home you eventually purchase.

Undergo Financial Counseling: If you’re returning home active duty, take advantage of the military’s “pre-separation counseling.” It offers advice on everything from financial planning to resume writing. [Source: Military.com]

Educate Yourself on Programs Available to Help You: In addition to your VA benefits, there are tons of other organizations that have programs to help vets either hold on to a home they may be in danger of losing to foreclosure and/or purchase a home.

But, you have to do some digging.

Buy Less House Than You Can Afford: When you qualify for a home loan, it doesn’t mean you HAVE to purchase a home for that amount. Many lenders expect your mortgage payment to consume no more than 30-35% of your GROSS income.

But, debt guru experts like Dave Ramsey say your mortgage (and taxes and insurance) should be no more than 25% of your NET income.

This is a big difference. For example, let’s say you gross $1,000 per week. Doing a rough calculation, a lender might say, “Oh, you qualify for a mortgage payment of $1,400 per month ($350 x 4).”

But, let’s say you net $850 per week. Using the 25 percent calculation, then your mortgage payment should be no more than $850 per month ($212.50 x 4). See the difference?

It’s always better to calculate using NET income, not gross, because Uncle Sam is going to get his cut of your paycheck, so don’t even count that money. What you should count is what’s left over after taxes are taken out. This is your NET pay. Gross doesn’t mean a hill of beans if it’s not in your bank account.

So make sure any mortgage broker you use calculates how much you qualify for based on your net income, not your gross.

Trust Your Gut: Military personnel are big targets for scammers because they know you have guaranteed income and guaranteed benefits. So, beware of scammers, ie, those who may try to get you enrolled into home loan programs or prevent foreclosure programs “just for vets that only costs a small fee.”

You don’t have to pay for any of this stuff. Never, ever trust anyone who asks you for money up front to help you stop foreclosure, get a home loan, get a mortgage modification, etc. Again, there are tons of free programs out there – through the military and through the federal government. If it doesn’t sound right or feel right in your gut – no matter how smooth talking or honest the person appears, or how good the program may sound – don’t pay any money.

Federal Regulatory Agencies to Help Stop Foreclosure

A good place to start your search if you’re trying to stop foreclosure or get a mortgage modification is the HUD website (Department of Housing and Urban Development). Here’s HUD’s prevent foreclosure program link. There’s tons of information there, and again, it’s free.

Here is a list of some other federal agencies that can help veterans prevent foreclosure.

Have Questions about Foreclosures and a VA Home Loan?

Here is a link to some commonly asked questions about foreclosure and VA home loans.

Related Posts

Foreclosure Scams: How to Avoid Being Ripped Off by “Foreclosure Rescue” Companies

How to Stop Home Foreclosure For Over 2 Years Without Making Payments: Do it Yourself for Free — Here’s How

Stopping Foreclosure: What to Do When the Bank Refuses to Accept Your Mortgage Payments & Tries to Escalate the Home Foreclosure Process

Foreclosure Lawyer: Need One? How Not to Get Ripped Off & Choose the Best One

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

Stopping Foreclosure: What the “Produce the Note” Defense Is & How It Can Help You Save Your Home from Foreclosure (Or at Least Stall)

Prevent Foreclosure Advice: Was Your Home Loan Legal? Get a Forensic Loan Audit to Find Out

P.S.: Bank Failures Can Mean Big Business for Foreclosure Cleaning Businesses! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Mortgage Foreclosure Timeline: How the Foreclosure Process Works & How Long You Actually Have to Move if You Eventually Lose Your Home

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Many homeowners are terrified by the prospect of losing their homes. Unfortunately, it’s a real fear in today’s foreclosure crisis.

If you’re in danger of falling behind on your mortgage payments, or have already done so, arming yourself with how the foreclosure process works can alleviate a lot of your fears. You’re not going to be thrown out on the street anytime soon. You will have time to get your financial act together. So you can relax a bit if this is your fear.

What is the Foreclosure Process: The Difference between a Judicial and Non-Judicial Foreclosure

The first thing you should know is that this differs, depending on whether you live in a judicial or non-judicial state.

What is a Judicial Foreclosure?

Judicial foreclosures are handled via the court system, hence the name “judicial.” What happens is, a lender files a complaint that outlines what the debt is and why they should be able to proceed with the foreclosure. Once the lender files, the homeowner is then served and both appear in court to resolve the process.

If the court finds for the plaintiff (the lender), it will issue a judgment for the total amount owed on the loan, PLUS the costs of the foreclosure process – up to and including all legal fees.

What is a Non-Judicial Foreclosure?

Basically, non-judicial foreclosures don’t involve courts; ie, a lender doesn’t have to go to court to kick you out. The way non-judicial foreclosures works is, once the homeowner is in default, they are usually sent a Notice of Default (NOD) by the lender. This puts the homeowner on notice that their loan is in default and that legal action may be taken by the lender.

When a homeowner receives the NOD, they have a certain amount of time to “cure” the situation – eg, bring their mortgage current. If they don’t, the homeowner is then mailed a Notice of Sale, which is then recorded (usually at the County Records Office) and published in legal outlets like local newspapers, etc. After all this happens is when a public auction usually takes place.

The Foreclosure Process: An Overview

Now that you understand the difference between a judicial and non-judicial foreclosure, following is a brief overview of the foreclosure process – no matter which type of state you live in.

We also break down, every step of the way, how the foreclosure process affects the foreclosure timeline – as it relates to today’s market. Knowledge like this can help you better prepare financially for the future – no matter what happens.

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First Contact from Lender: Notice to Accelerate. If you miss several months of payments (usually two or three) and your account consistently remains 60 days past due, you will likely receive a “Notice to Accelerate” from your lender.

It means you will immediately need to bring the loan current to stop the foreclosure process and you have to pay the past amount along with the late penalty fees right away.

How a Notice to Accelerate Affects the Mortgage Foreclosure Timeline in Today’s Real Estate Market

Many lenders and mortgage servicers are so behind these days that while you may receive a Notice to Accelerate, it’s just the company following procedures. Many mortgage holders do nothing more at this point – other than continue to send you letters threatening to foreclosure.

Second Contact from Lender: Notice of Intent to Proceed with Foreclosure. If you don’t respond after receiving a Notice to Accelerate, usually the mortgage servicer’s and/or lender’s attorney will send you another letter.

In it, you are formally notified that if you don’t bring your mortgage current immediately, the foreclosure process will begin.

Note: At this stage, you are officially in what’s known as pre-foreclosure, which is the first stage of the foreclosure process. You have about three months (90 days) from the date of this letter to bring your home loan current. Again, how long you have depends on whether you live in a judicial or non-judicial state.

In pre-foreclosure, the county can list your property (along with others in this stage) in newspapers and other types of media (eg, websites) for the general public to view. The county also has the right to affix a visible “Notice of Foreclosure” on the property, which can be embarrassing.

Of course, if you catch everything up within the aforementioned time frame, then the foreclosure process stops. If not, then your lender will move on to the next stage in the foreclosure process.

How a This Notice Affects the Mortgage Foreclosure Timeline in Today’s Real Estate Market

Again, banks and lenders are behind (seeing a running theme here). It’s still just procedure. You may receive a few more of these letters before a formal Notice of Default (the next stage listed below) is issued.

Third Contact from Lender: Notice of Default. After the above notices have been sent, the next step your mortgage holder will take is filing a formal foreclosure notice (Notice of Default) with the court in your jurisdiction. It is usually sent when a homeowner has missed three payments on their mortgage.

It will list the entire amount you need to pay in order to avoid foreclosure. You will be given twenty to thirty days to act in response to this judgment before the foreclosure process proceeds further.

The above is in a “normal” real estate market.

How a Notice of Default Affects the Mortgage Foreclosure Timeline in Today’s Real Estate Market

In today’s foreclosure-ridden market, mortgage holders are so swamped because of the volume of foreclosures (and their own missteps, eg, robosigning, which has brought on legal consequences), that it may be months – or even a year or more in many cases – before they get around to actually issuing a formal Notice of Default.

And, even if they do, they won’t act on it right away. In fact, many lenders are intentionally NOT foreclosing on homeowners.

Fourth Contact from Lender: Notice of Sale. This is the last warning you’ll likely receive from your lender. If means the lender is going to sell your home on the courthouse steps via a foreclosure auction.

If a bid is accepted, the title of the property is transferred to the buyer. You no longer own the home. This stage is the actual foreclosure. If no one buys the property at auction, the bank/lender retains ownership. This is what’s known as the post-foreclosure process.

You can still stop foreclosure at this point, but you must come up with some money.

SHARE YOUR FORECLOSURE STORY: Are you facing foreclosure? Have a question about the process? Share your story and send in your question via the comments section below.

Related Posts

Foreclosure Crisis to Drag on for Another 9 Years?

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

Foreclosure Laws in Florida: A Quick Overview of the Home Foreclosure Process in the Sunshine State

Foreclosure Timeline for All 50 States: Get a state-by-state breakdown of how long the foreclosure process takes

Buy Foreclosure House: What You Need to Know about Purchasing Pre-Foreclosures

Foreclosure Homes for Sale: Want to Buy a Cheap Foreclosed Property? Here’s Some Inside Info You Need to Know If You’re a New Investor

P.S.: Bank Failures Can Mean Big Business for Foreclosure Cleaning Businesses! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Buy Foreclosed Properties at a 40% Discount: Why This Isn’t Necessarily a Good Thing

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

At least, that’s the discount most Americans expect if they purchase a foreclosed home, according to a recent poll by RealtyTrac, the leading the leading online marketplace on/for/about foreclosure properties. This isn’t necessarily a good thing for existing homeowners, as we discuss below.

In a report conducted with Trulia, a leading site for homebuyers, RealtyTrac conducted a poll among that tracked the feelings of Americans about foreclosed homes since 2008, shortly after the foreclosure crisis started. The study released the latest results on May 18, 2011, noting:

Along with having some concerns about hidden costs, a risky buying process and loss in home value, many potential buyers expect to save money if they buy a foreclosure versus a similar non-foreclosed home. In fact, American adults expect to pay 38 percent less for a foreclosed home than a similar home that was not in foreclosure . . .

What Most Americans Think about Home Foreclosures

Some other perceptions gleaned from this poll are:

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Americans think housing recovery is still a few years off: The majority (54%) believe it won’t happen until at least 2014; some three years down the road. As a whole, the populace is getting more pessimistic. Proof?

Just six months ago, 42% thought the foreclosure crisis would start to get better next year (2012).

What does this means for “the Average Joe” who owns a home? Perception (feeling) drives sales. And when the buying public is skittish / pessimistic, they put their wallets away. So, this means that current homeowners will most likely have to continue to watch their homes lose value, as they compete with the rash of foreclosures that clutter the real estate market.

Americans don’t believe the government has done enough to help: The poll noted that approaching half (45%) of adults say the government has not done enough to prevent foreclosures.

Only 17 percent say too much is being done, while 16 percent say they are doing the right amount and 22 percent say they are not sure.

What does this means for “the Average Joe” who owns a home? There goes that “perception factor” again. If the average American doesn’t believe that even the government can help, they feel even more powerless.

So, they do nothing . . . they don’t buy and they don’t/can’t sell. This means a stagnant real estate market – which is not good for anyone (buyers, sellers, agents, etc.).

And, it hurts other sectors of the economy, eg:

Retail: Who’s going to buy a new washer/dryer when they see the equity they have disappearing (has disappeared) and they don’t know if they’ll be hanging on to the existing residence;

Construction: New home builders can’t compete when the market is littered with cheap foreclosures that aren’t even selling;

The job market: Companies have to lay off employees because nobody has discretionary income to buy anything and/or they “believe” they don’t have the money to buy anything.

Again, perception IS reality, folks. When people don’t “feel” secure (eg, like the economy is recovering), even if they have money, they tend to hold on to it a lot tighter.

Etc.

It’s a vicious cycle.

Almost half of Americans would consider purchasing a foreclosed property: This was a bright spot in the survey, which found that almost half (47%) of Americans would consider (eg, are “somewhat likely) purchasing a foreclosed home.

What does this means for “the Average Joe” who owns a home? While it may take the housing recovery a few years, Americans are an extremely resilient people. Their confidence will come back, and the market will recover.

They’re just taking their time – and smartly so. There are many lessons to learned from this home foreclosure crisis, and one of them is – “haste” (ie, purchasing an overpriced home at an inflated interest rate in a “hot” real estate market) makes waste.

Lesson learned!

Learn more about what Americans are thinking and feeling about this foreclosure crisis in RealtyTrac and Trulia’s home foreclosure survey.

SHARE YOUR THOUGHTS: Do you agree with the findings of this survey? When do you believe the market will recover? Are you facing foreclosure? How has this affected your outlook on the real estate market? Share your story in the comments section below.

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Home Loan Modification: 65-75% of Loans Modified via HAMP (the Govt’s Home Affordable Modification Program) Likely to Go Bad

Home Loan Modifications: Why Federal Government’s Mortgage Modification Program a Mix of Good and Bad News for Homeowners

Buy Foreclosure House: What You Need to Know about Purchasing Pre-Foreclosures

Right of Redemption Laws: How to Get Your Home Back – Even After It’s Sold as a Foreclosure

Some Banks are Purposely NOT Foreclosing on Homeowners in Default: Here’s Why

Home Foreclosures in U.S. Reach Record Highs: What It Means for the Average Joe

P.S.: Bank Failures Can Mean Big Business for Foreclosure Cleaning Businesses! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 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 Advice: Should You Continue to Pay Your Mortgage While You Wait for a Home Loan Modification?

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

The end of the foreclosure crisis is nowhere in sight. And, as we’ve discussed in numerous posts in various different scenarios on this site, it leaves many homeowners in some form of housing limbo and unable to make decisions about how to move forward with their lives, eg:

Home Foreclosure News: 3 Ways the Prolonged Housing Crisis Is Severely Affecting Homeowners Facing Foreclosure

Foreclosed Properties Continue to Drag Down Construction of New Homes: What It Means for the Average Joe

In light of the above, should homeowners who are facing foreclosure continue to pay their mortgage while they’re going through the home loan modification process?

On the face of it, the answer would be, “Yes, of course. It’s their legal, moral and financial obligation.”

BUT . . . consider this:

Arguments That You Should STOP Paying Your Mortgage While You’re Waiting on a Home Loan Modification to Come Through

Hardship: Many homeowners are facing foreclosure because they’ve lost jobs, used up savings, are underwater, etc. Many are hanging on by a small financial thread.

Lenders Won’t Communicate: Making the situation worse is that many lenders won’t even consider you for a loan modification UNTIL you are severely behind on payments. AND, then still, many will tell you that you don’t qualify for a mod because you’re underwater (ie, owe more on your home than it’s worth).

Lenders Lag in Processing Requests: Also, many lenders are so far behind in processing home loan modification requests, that you can easily run through savings while you wait to see if/when a mod is forthcoming.

Still Lose Home to Foreclosure: When all of the above is considered – there’s a good chance that you may still lose your home to foreclosure, especially if you can’t prove that you can make the modified payments.

Fed Up Homeowners Who Wished They’d Stopped Paying Their Mortgage

Message boards are filled with angst-ridden homeowners who’ve run through all of their savings, only to be denied a modification. With 20/20 hindsight, many of these homeowners have said, “I wished I’d just stopped paying the mortgage and saved that money to get on with the rest of my life (eg, move, pay off debt, etc.).” [See the comments section of this post – very enlightening]

The bottom line is, when you apply for a modification, lenders are going to either work with you, or not, based on the following:

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6 Factors Lenders Consider When Deciding to Approve or Deny a Home Loan Modification

1. What caused your hardship (which you should explain in a hardship letter);

2. Your ability to pay if a mod is forthcoming;

3. The amount owed on the property;

4. The amount of equity in the property (if there is any these days);

5. Your financial prospects moving forward (eg, your future financial situation); and

6. Does it make more sense to have the borrower sell the home via a short sale or turn the home over (eg, do a deed in lieu of foreclosure).

While it may make you, the homeowner, feel better to make payments, a bank/lender is not going to deny years of forthcoming payments (if they give you a mod), because you’ve missed a few months or a year of payments while waiting for the mod to come through.

Just something to consider.

SHARE YOUR STORY: Are you facing foreclosure? Are you still paying your mortgage? Share your story in the comments section below.

Related Posts

Home Loan Modification: 65-75% of Loans Modified via HAMP (the Govt’s Home Affordable Modification Program) Likely to Go Bad

Stop Foreclosure: How to Ready Your Home for a Fast (Short) Sale

Home Loan Modifications: 30% of Those Made in 2009 Were Seriously Delinquent or in Foreclosure Process — Lessons Learned?

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

HAMP Program Changes: If You’re Unemployed and/or Underwater On Your Home, Get Gov’t Help to Refinance or Modify Your Mortgage

P.S.: Bank Failures Can Mean Big Business for Foreclosure Cleaning Businesses! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 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 Foreclosure Crush: 4 Ways Falling Home Prices Hurt the Average Homeowner (It Ain’t Pretty Y’all)

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

This time last year, housing prices were almost five percent higher than they are now. According to the National Association of Realtors, the median housing price is now about $158,700. Condo prices plummeted about 10 percent more since last year, and the REO inventory is huge all across the country.

How the Housing Crisis Is Robbing the Average Joe of Home Equity

A lot of this can be attributed to the rash of foreclosures in the past year, which lower all neighborhood prices. Home sellers who are not in default have to compete with super low REO prices, so they have to slash their asking prices even further.

Home Foreclosure News Flash: Home Prices Are Dropping Faster Than They Were Just a Year Ago!

Home values are about 30 percent lower than they were in 2006, and they have already fallen another 7 percent since January 2011. This means that prices are actually dropping faster than they were a year ago. Proof?

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According to the CNN Money article, Foreclosures Crush Home Prices:

We’re seeing prices dropping faster than they did in 2010,” said Pat Newport, an analyst with IHS Global Insight. “That’s troubling. Falling home prices precipitated the recession and are slowing the recovery.

4 Critical Ways Depressed Home Prices Hurts the Average Homeowner

1. Decreased/nonexistent home equity, as alluded to above: Equity quickly disappears when foreclosures hit a neighborhood.

2. Work longer: This means many homeowners (especially those who were maybe looking to retire in the next 3-10 years) may have to work longer if they were counting on selling their home, pocketing some of the profits and downsizing;

3. Inability to refinance/modify a home loan: This is because many homeowners are pushed underwater; and

4. Decreased Job Opportunities: For many, this means the [continued] inability to find a job. As the analyst in CNN Money post above outright stated, the current recession was brought on by the foreclosure crisis. Because the housing market is intricately linked to other economic sectors (retail, manufacturing, construction, etc.), when it’s depressed, other areas of the economy suffers also.

Before you know it, you have a full-blown recession.

Who’s Profiting during this Home Foreclosure Mess

It ain’t the average homeowner, that’s for sure.

UNLESS . . . they’re investors.

Home Foreclosure Statistic: Almost 40% of Recent Sales Were REOs

Investors and savvy buyers are snapping up foreclosures like never before. In fact, 39 percent of all recent sales were REOs. That’s even higher than last year’s sales. When will it end? No one knows, but don’t expect to see a housing recovery for another 5 years.

The Ideal Time to Start a Foreclosure Cleaning Business

Many of the sold foreclosures are in fair to poor condition. Homes that are in good condition are newer – built in the last five years. Families who were foreclosed upon left their homes in disarray – another opportunity for cleanup businesses.

FYI, this presents an ideal small business opportunity for those who want to start a foreclosure clean up businesses or rehab projects.

Related Posts

Stop Foreclosure: How to Ready Your Home for a Fast (Short) Sale

Foreclosed Properties Continue to Drag Down Construction of New Homes: What It Means for the Average Joe

HAMP Program Changes: If You’re Unemployed and/or Underwater On Your Home, Get Gov’t Help to Refinance or Modify Your Mortgage

Home Foreclosure News: 3 Ways the Prolonged Housing Crisis Is Severely Affecting Homeowners Facing Foreclosure

P.S.: Bank Failures Can Mean Big Business for Foreclosure Cleaning Businesses! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 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 Foreclosure News: Fewer Homeowners Losing Their Homes to Foreclosure; Why This ISN’T Good News & 5 Things It Means for the Average Homeowner

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Fewer Americans lost homes to foreclosure this past April than did so a year ago. BUT, this isn’t the good news. In fact, it signals that the foreclosure crisis is getting worse – and may continue so for three to four more years. Following is why, and how it affects the average homeowner facing foreclosure.

Main Reason Many Homeowners Didn’t Lose Their Home to Foreclosure This Past Year

According to the Associated Press article, Processing delays slow foreclosure activity in 1Q:

The number of properties receiving a notice of default for the first time also declined, falling 17 percent from the fourth quarter and 35 percent from the first three months of last year, the firm said. . . . The drop-off in foreclosure activity stems from foreclosure documentation problems that came to light last fall. Many banks have since revisited thousands of foreclosure cases, delaying the processing of new foreclosures.

5 Things the Slowdown in Home Foreclosures Means for the Average Homeowner Facing Foreclosure

While the good news should have been that fewer homeowners lost their home to foreclosure this past year when compared to the previous year, the good news to come out of this IS that homeowners have more time to possibly prevent foreclosure. Following is why.

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(i) Banks more willing to working with more homeowners to stop foreclosure: In the article, Banks more willing to work with homeowners to prevent foreclosure, a housing counselor notes:

. . . banks have more experience under their belts since the housing market went south. They’ve been criticized for how they handled foreclosure processes, and since 2009, under the federal Making Home Affordable Program, banks that participate must consider modification applications.

(ii) Judicial system starts to work in homeowner favor: In addition to government programs that are forcing banks to reconsider how they’ve handled foreclosures to date, laws in many states are being put on the books to help homeowners prevent foreclosure. Proof?

The aforementioned article, Processing delays slow foreclosure activity in 1Q states:

The [foreclosure processing] logjam has been compounded by court delays in states such as Florida, New York, and New Jersey, where foreclosures must be approved by a judge.

This means it takes lenders longer to foreclosure, which is good news for homeowners, mainly for the following reason . . .

(iii) Get finances together: Many homeowners fall behind because they’ve lost a job or they had an ARM (adjustable rate mortgage) and their mortgage payments increased when the ARM reset.

A delay in foreclosing gives many homeowners time to get their financial house in order – whether it’s finding a new job, applying for a home loan modification, declaring bankruptcy in order to eliminate debt (so they can afford their mortgage payment), etc.;

(iv) Make better life decisions: Another reason the slowdown in foreclosures is good news for homeowners is that they get more time to make better life decisions — whether it’s to come to the realization that they can’t afford their mortgage and need to move on, or to buckle down and do what they need to do to keep the home (eg, get a second job; rent the property, etc.).

(v) Move on with life in better financial shape: The final reason the slowdown in home foreclosures is a good thing for existing homeowners is that no matter how it turns out (they lose their home or they keep it), they can undoubtedly move on to the next phase of their lives in better financial shape.

This is because many are able to live “rent free” for months on end. And if this time is used wisely, these homeowners should be saving this money.

Also, many will be eligible for cash for keys – which can put another few thousand dollars in their pocket.

Are you facing foreclosure? Did this post give you some new insight? Share your story in the comments box below, and feel free to send in any questions you may have.

Related Posts:

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

Hawaii Foreclosure: Homeowners in Default Getting to Meet Directly with Lenders — An Option Very Few Facing Foreclosure Get

Home Foreclosure News: 3 Ways the Prolonged Housing Crisis Is Severely Affecting Homeowners Facing Foreclosure

Home Foreclosures to Blame for Rising Cost of Rents and Increase in Foreclosure Rental Scams on Popular Sites Like Craigslist

Foreclosure Lawyer: Need One? How Not to Get Ripped Off & Choose the Best One

Home Loan Modification Scams to Be Aware Of

Prevent Foreclosure Advice: Was Your Home Loan Legal? Get a Forensic Loan Audit to Find Out

P.S.: Bank Failures Can Mean Big Business for You! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 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 Foreclosure News: 3 Ways the Prolonged Housing Crisis Is Severely Affecting Homeowners Facing Foreclosure

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

According to the Time magazine article, “Foreclosures: Are Bank Regulators Messing Up the Housing Recovery?,” bank regulators are responsible to a large degree for the slow housing recovery. And, this is not some journalistic opinion. A big industry insider (the head of the FDIC) is laying the blame, in part, on regulators’ doorsteps. The article states:

Sheila Bair, who heads the Federal Deposit Insurance Corp. [the FDIC]. . . .says the fact that regulators haven’t done more to resolve the problem banks are having with foreclosures is one reason why the housing market is not recovering. . . . [Bair] has said that banks need to hold more capital; she has warned about moral hazards in the money-market fund business; and she has said that more needs to be done to end Too Big To Fail . . .”

3 Ways the Prolonged Housing Crisis Affects Homeowners Facing Foreclosure

So, what does all of this mean for the Average Joe facing foreclosure? Primarily, three things . . .

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I. Stay in Home Longer: With the government haranguing, suing and trying to wrangle settlements out of lenders over illegal home foreclosure practices like robosigning, homeowners are able to stay in their homes longer.

So in one sense, the average homeowner is better off – for the moment – because banks have halted foreclosure proceedings in some cases, and are working with homeowners to prevent foreclosure in others.

On the other hand . . .

II. Drags Foreclosure Process Out: The fact is, many homeowners facing foreclosure these days will eventually lose their home. This is because they’ve lost jobs, run through savings and since lenders have balked at giving principal reductions, many simply can’t afford their residences – even if they are lucky enough to qualify for a home loan modification.

Hence, this draws the foreclosure process out for many, which leaves them in a kind of “housing limbo.” Add to this the fact that lenders are having all kinds of problems processing foreclosures and home loan modifications speedily, and a homeowner can go months wondering:

“Is the mod going to come through?”

“Should we do a short sale,”

“A a deed in lieu of foreclosure,”

Etc.

Many homeowners are stuck – the just don’t know what to do, which leads us to the last point . . .

III. Causes Stress for Homeowners: When the very roof over your head is threatened, it’s hard to be happy. In fact, many homeowners facing foreclosure complain of a myriad of health problems – from severe stress and sleeplessness, to migraines and depression.

Prolonged, these symptoms can lead to all kinds of unpleasant consequences (eg, suicide).

For all of our sakes, let’s home bank regulators, politicians, lenders and homeowners can come to some type of resolution — so we can all get back on the road to prosperity — financially, as well as emotionally.

Related Posts

Stopping Foreclosure: Banks Considering Giving Principal Reductions, Permanent Modifications & More to Prevent Foreclosure for Many Homeowners

Stopping Foreclosure: Obama Administration Considering Forcing Banks to Modify Home Loans – What It Means for The Average Homeowner

Home Foreclosure News for 2011 — 100,000 Foreclosures Expected in the First Month of This New Year

Stopping Foreclosure: Obama Administration to Launch 2 New Programs to Help Homeowners Avoid Foreclosure (One is for Unemployed Homeowners)Foreclosure Horror Stories: From Ramming SUVs into Homes to Deadly Shootouts, Some Facing Foreclosure Act Drastically

Foreclosure News of the Day: Citigroup Suspending Foreclosures

Foreclosure Laws: Divorce, Debt & Foreclosure – What Every Dependent Spouse Needs to Know

P.S.: Bank Failures Can Mean Big Business for You! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 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 Clean Up Business News: Housing Crisis Deepens, Presenting Evergreen Opportunities for All Kinds of Cleaning Businesses

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Do you own a foreclosure clean up business, or are thinking about starting one? If so, now has never been a better time. Why?

Because the foreclosure crisis is deepening – yet again. We mentioned it in the May 9th post here entitled, Foreclosure Crisis Deepens Yet Again: The One Thing Lenders Won’t Do That Could Significantly Decrease Foreclosures Immediately, writing:

According to the MSNBC article, No end in sight for foreclosure quagmire:

Four years after a wave of rogue mortgage lending sent the U.S. housing market into the worst collapse since the Great Depression, the devastating flood of resulting foreclosures shows no sign of abating. In some ways, the problem is getting worse.

While this is unfortunate for many homeowners, it presents a prime opportunity for those who want to start a foreclosure cleaning business, or those who already own commercial and/or residential cleaning businesses.

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Post Continued Below: Get your foreclosure cleanup “Business in a Box” and start this lucrative business right now for 40% Off! Click the box to learn how.

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Are You Prepared?

We just wanted you to be aware of this so that as the busy summer season comes (lawns need to be cut, trees need to be trimmed, pools need to be cleaned, homes need to be trashed out, etc.), you can start marketing for your share of this business.

FREE Info on How to Market Your Foreclosure Cleanup Biz

Learn more about how to market your foreclosure cleaning business in the following . . .

Related Posts

Foreclosure Clean Up: Why It’s Still a Leading Small Business Opportunity for 2011

How to Start a Foreclosure Cleanup Business “On the Cheap”

Foreclosure Cleaning Business: How to Start One While Working Fulltime

Foreclosure Cleaning Business Owners: Advice from a Banker Who Handles Foreclosed Properties on How to Land Foreclosure Cleaning Jobs

How to Bid on Foreclosure Cleaning Jobs: Inside Peek at an Actual Foreclosure Cleanup Bid

Foreclosure Cleaning: How to Get Non-Foreclosure Cleaning Jobs

Foreclosure Cleaning Business Advice: One Sure Way to Make Your Company Stand Out from the Competition

How to Get More Foreclosure Cleaning Jobs with Postcards

Cleaning Foreclosure Properties: Learn How to Price Jobs by “Spying” on the Competition

As always, wishes of great success to you with your foreclosure cleanup foreclosure cleanup business.

P.S.: Bank Failures Can Mean Big Business for You! Visit this link to see which banks closed have closed recently. Then, learn how to use bank failures to grow your foreclosure cleaning business.

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

Copyright © 2011 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 Scams: How to Avoid Being Ripped Off by “Foreclosure Rescue” Companies

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

We’ve discussed foreclosure scams on this blog before. But, as stated in yesterday’s post here, the foreclosure crisis is deepening — yet again. Hence, we thought it prudent to revisit this topic, for the wolves are out like never before; preying on unsuspecting homeowners at the most vulnerable time.

So, here we go again . . .

Foreclosure rescue companies aren’t new, but there seems to be more than ever now. For a “nominal fee,” (or some type of percentage arrangement) these companies promise to save your house from foreclosure by working with lenders or buying the house from you, the owner.

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It’s worth noting that foreclosure scams work in several different ways. But, what they all have in common is getting money out of you, a desperate homeowner. How they separate you from your money is where the differences come in. To that end, following are some . . .

Common Signs of Home Foreclosure Rescue Scams

(i) The company asks for high upfront fees before they will help you.

(ii) The “counselors” are not counselors at all, but scam artists simply posing as experts affiliated with local agencies.

(iii) The company dupes the homeowner into signing away his or her house to them.

(iv) The company promises to buy the home and rent it back to the homeowner.

While there are plenty of reputable foreclosure specialists out there, you have to do your research before you hand over your cash. How can you find out if a foreclosure rescue company is just a scam or real foreclosure prevention help?

Questions to Ask and Signs to Look for to Avoid Home Foreclosure Scams

1. Know home loan scam Rule 1. What is it? If the company asks for money upfront, walk away – plain and simple. In #3 below, we give a link to a government-sponsored program – which is free.

You never, ever have to pay someone to help you prevent foreclosure. Remember this. While it’s time consuming, tedious and an outright pain in the patootie, everything the supposed “foreclosure rescue specialists” promise to do for you, you can do for yourself.

2. Check out the BBB (Better Business Bureau) or the FTC (Federal Trade Commission) for reviews.

Note: A newer company may not have any negative claims against them, so still be careful even if there aren’t any complaints against a company.

3. Get reputable foreclosure assistance help. How? By speaking with your local non-profit housing counselors first and ask them about reputable rescue companies.

The link here is to HUD (the Department of Housing and Urban Development, a government agency). It lists approved housing counseling agencies that are available to provide you with the information and assistance you need to avoid foreclosure. And, it’s free. As the notice on the site states:

Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

Simply click on your state from the link above to find one located near you.

4. Consult a foreclosure attorney. Never sign any documents from a foreclosure rescue company without consulting a foreclosure attorney/real estate lawyer – in your jurisdiction — first.

Definitely don’t sign any documents with blank spaces! Make copies of everything and get all agreements in writing.

5. Watch out for people that offer to buy your house and then rent it back to you. This is a common home foreclosure scam. Once you sign over the deed, what usually happens is that your home will be sold to another party for whatever the thieves can get.

So, for example, even if your home is worth $150,000, they may sell it for $50,000 or $75,000. After all, whatever they get for it is pure profit for them. The long and short of it is, they pocket the cash and you’re out of a home.

See the related posts below for more info on how to avoid home foreclosure scams.

Related Posts

Home Loan Modification Scams to Be Aware Of

Foreclosure Lawyer: Need One? How Not to Get Ripped Off & Choose the Best One

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

Home Foreclosure Scams: Foreclosure Consultants — Beware!

Foreclosure Prevention Scams: Loan Modifications Specialists Facing Jail Time

Home Foreclosures to Blame for Rising Cost of Rents and Increase in Foreclosure Rental Scams on Popular Sites Like Craigslist

Cleaning Foreclosures: Scams to Be Aware Of

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

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