ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!” Find Trusted Vendors, eg, Foreclosure Lawyers, Mortgage Consultants, Cleaning Co’s, Etc.

All this week here we will be discussing how to stop foreclosure with the help of NACA, The Neighborhood Assistance Corporation of America (“NACA”). In yesterday’s post, we discussed how to continue to work with NACA after the workshop to stop foreclosure.

Today, we’re going to discuss getting a home loan through NACA. If you’re thinking, “But this has nothing to do with stopping foreclosure, why are we going over this?” 

Well, it’s a backup plan. If you are, for whatever reason, unable to stop foreclosure using NACA’s help, it’s a good idea to have a Plan B. Even if you have to take some time to recoup financially, when you’re ready, it’s nice to know there’s an affordable home loan option out there. 

Following is an in-depth overview of the benefits of applying for a home loan via NACA.

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Getting a Home Loan via NACA: Even with Bad Credit, You Can Get a Home Loan – Here’s Proof

No Closing Costs: This may be the best part of getting a home loan via NACA, because it can save you thousands of dollars when purchasing a home.

Level Playing Field: When you get a home loan via NACA, you don’t have to worry about getting a higher interest rate because you have bad credit. Why? Because everyone who gets a home loan with them receives the same (low) interest rate, usually much lower than the going market rate. As of today’s date, 1/19/2012, it’s 3.75%.

No Exotic Loans: You don’t have to be worried about being pushed into loans like an ARM (adjustable rate mortgage), which means your mortgage payment will change (ie, go up) in a few years. Many argue that this is what got us into this mess anyway.

Home loans obtained via NACA are fixed rate, 30-year loans. So, no matter what happens, you’ll always know what your mortgage payment is – and you can plan for emergencies (eg, get 6 to 8 months of expenses in the bank).

Streamlined System: Much like when getting a home loan modification with them, NACA sets up a web file for each loan applicant. This way, you can log in at any time and see what’s happening with your home loan application, eg, do you need to submit more paperwork, has your loan been approved, who your lender is, etc.

Reasonable “PMI-Like” Fee: Once you get mortgage via NACA, you can pay fees for additional services, eg, a membership fee of $50/month. What is this fee for? Well, if you run into trouble paying your mortgage at any time, paying this fee allows you to get assistance that will help you figure out a solution until you can get back on your feet. 

This fee is significantly less than the PMI (private mortgage insurance) most lenders charge.

What Is PMI?

Private Mortgage Insurance is basically foreclosure insurance. In the event that you are foreclosed on, the insurance company pays off your home loan.

And, just how much do most lenders charge for PMI? 

Typically PMI ranges from .23% to .92% of the loan amount and is usually paid monthly along with other items such as your taxes and homeowners insurance. On a $100,000 loan, PMI would range from $20 to $77per month. The cost of PMI is determined by the type of loan (adjustable vs. fixed) , the term of the loan (30 year vs. 15 year) and the amount of down payment (0%. 3%, 5%, 10% or 15%).  The more down payment you have the lower the monthly PMI. [Source: KCHomeLoans.com]

Note: If you put down 20%, then you don’t have to pay PMI at all.

Financial Counseling: This is another great benefit of getting a home loan via NACA. You get to really learn what’s entailed in not only applying for one, but what it means – financially – to own a home.

For example, one of the things discussed is “payment shock,” eg, the difference between what you’re accustomed to paying in rent and your future mortgage payment. Most new homeowners are simply not prepared for the financial obligations of owning a home.

And, unlike renting, you can’t just walk away – you sign on for (usually) 30 years. So not only do you have to be prepared financially, you must be emotionally and mentally prepared for what it takes to own a home.

Find an Affordable Home: NACA has contacts with many lenders who have tons of repossessed/foreclosed-properties in their inventory. Banks want to unload these – and you want to buy.

It’s a “perfect storm” for you as a buyer because it means that you get homes at below-market rates. In fact, on its site NACA notes: 

They will help you find a house where you wish to live below the Maximum Purchase Price, and negotiate the purchase with the seller. He or she can also help you determine what renovations might be necessary, and whether and how the seller can most effectively assist, or whether the cost can be included in your mortgage.

Bad Credit, No Problem: This is because NACA will work with you as long as it takes to get you qualified to buy.

All you really need to prove is that you have a steady income, can afford your monthly payments and a stable payment history. Even if you’ve credit problems in the past, you’re allowed to explain them (eg, there was an illness that caused you to be laid off). This puts a “human face” on credit problems, which makes it easier for you to get a home loan – even with bad credit.

Learn everything you need to know to get a home loan via NACA.

The #1 Thing You Must Possess When Applying for a Home Loan with NACA

Just like getting a home loan modification, you must be patient throughout the process. It may take a while to get you approved, or to find a home that you can afford, but it’s worth it if you’re really want a home – with an affordable mortgage payment – that you won’t have to worry about losing to foreclosure because you can’t afford it.

Related Posts

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

Home Loan, Bad Credit and How to Qualify: Yes, It’s Still Possible, But . . .

Home Foreclosure: The New Credit Standards to Qualify for a Mortgage Brought on by the Crisis

Home Foreclosure News: Owning a Home Becoming a Lot Harder for Lots of Americans Because of the Foreclosure Crisis

Foreclosure & Credit: How Does Foreclosure Impact Your Credit Report?

First-Time Home Buying Advice: Is It Better to Buy a New Home than a Foreclosed Home?

Foreclosure Advice & Credit Card Debt: Can Credit Card Companies Put a Lien On Your Home?

Because of Home Foreclosures, Buying a Home Is Cheaper than Renting in Almost 75% of Largest American Cities

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs.

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

Copyright © 2012 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!” Find Trusted Vendors, eg, Foreclosure Lawyers, Mortgage Consultants, Cleaning Co’s, Etc.

All this week, we will be discussing short sales here on ForeclosureBusinessNews.com.

Today, so we’re all on the same page, we’re just going to link to an article that gives a detailed definition of a short sale, as well as some insight into why lenders agree to short sales, the credit implications of doing a short sale, and more info.

Find out the definition of a short sale and all of the info just above.

Following is what’s coming up the rest of the week.

Wednesday: What is the Short Sale Process?

Thursday: How to Find a Short Sale Buyer for “About to Be Foreclosed On” Home

Friday: Short Sale Tax: (What Sellers Need to Know) 

Foreclosure Clean Up Job Leads & More

FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs.

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Related Posts

2 Foreclosure Options for Homeowners with Little or No Equity in Their Homes

Buying a Foreclosure? Here’s the Difference between a Regular Foreclosure and an REO Foreclosure

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

P.S.: Bank Failures Can Mean Big Business for Foreclosure Cleaning Businesses! Learn 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

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

According to an article on the Kansas City Star website, mortgage rates are still below 5%.  The article states:

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

As the home foreclosure crisis rages on, more and more homeowners are considering options that they never thought they’d have to consider. And, with deadlines pending that can greatly impact future finanical decisions, it’s imperative that the right decisions are made at this critical time.

Here, we’re going to discuss the differences between a foreclosure and a short sale, and the credit impact of each. But first, let’s clearly define what they are.

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What Is a Foreclosure?

A foreclosure occurs when the lender takes ownership of a property away from the owner. In legalese, it is “the termination of all of the rights that a mortgagee (the homeowner) has in a property.”

This usually occurs because the owner has defaulted on mortgage payments. But, it can also be due to property taxes being owned, HOA fees not being paid, a contractor’s lien, etc.

What are the Stages of the Home Foreclosure Process?

The foreclosure process is usually initiated when a lender notifies the mortgagee that payment is delinquent. This is done via a Notice of Default (NOD). Learn more about all of the stages of the home foreclosure process.

What is a Short Sale?

A short sale is when a lender agrees to accept less for the property than what is owed on it. In essence, a buyer purchases the property directly from the lender at a discount.

For example, let’s say you’re facing foreclosure and you owe $100,000 on your home. But, because the foreclosure crisis has hurt property values, your home is only appraised at $73,000 and you have a buyer who is willing to pay that.

If the bank (lender) agrees to accept this as “full” payment, then you sell the home for $73,000; $27,000 “short” of what is actually owed on the mortgage.

Tax Implications of a Short Sale: You Could Wind Up Owing a Lot of Money in Taxes If You Short Sale Your Home after December 2012

Most times, you as the owner would be responsible for the “short” fall – as in, the government looks at it as “income” and you have to pay taxes on that. Yep, that’s right, you could wind up owing taxes when you do a short sale.

But, current legislation in place protects you from this penalty – if you act by a certain date. Following is more on this.

Why is this? We explained it in post we did earlier this spring about options for homeowners who are facing foreclosure, writing:

Home Foreclosure and Taxes: Important Tax Consequences of a Short Sale after December 31, 2012

For example, if you owe $200,000 on your home and you sell it for $100,000, the government will tax you on the $100,000 difference because it’s seen as a financial “windfall.” So if you’re going to do a short sale, be sure to do it BEFORE December 31, 2012.

Remember, in this market, it’s taking homes months and months — some more than a year — to sell. So if this is an option you’re considering, don’t delay too long. FYI, the tax break applies only to primary residences.

Learn more about The Mortgage Forgiveness Relief Debt Act and Debt Cancellation law — and the tax implications of a short sale.

Why Lenders Accept Short Sales

There are several reasons, ie:

Banks Are Not in the Real Estate Business: Banks are not realtors – and they don’t want to be. They want to make money from lending money – not buying and selling property. Hence, they don’t like to hold on to “housing inventory.”

So, they tend to sell it as quickly and expeditiously as possible. FYI, this is also why banks are willing to work with homeowners to stop foreclosure where possible.

Foreclosing Is Expensive: In many cases, it costs lenders more to foreclosure on a home than to work with a homeowner to prevent foreclosure. How much more? Consider this (from the linked-to post just above):

A report by the Joint Economic Committee of Congress estimates that the average cost of a foreclosure, to the homeowner, lender, local government, and neighbors (whose homes decline in value), is $78,000. By contrast, preventing the foreclosure would cost $3,300 per home on average.

So even though a short sale may bring in less, lenders are willing to accept it because the sooner they can get rid of the “toxic asset,” the sooner they can move on.

Maintaining Foreclosed Property Is Expensive: When a home sits empty, the owner (in this case, the foreclosing lender) risks vandalism and squatting, not to mention the maintenance and upkeep that’s required (eg, cutting the grass, securing the locks, winterizing, etc.).

Incidentally, this is why many lenders pay homeowners to leave (ie, offer cash for keys), so they can do a short sale to get rid of the property.

Now that you know what a foreclosure and a short sale are, let’s look at the differences between them.

Differences between a Short Sale and a Foreclosure

Possession: A short sale happens while the homeowners still has possession. In a foreclosure, the lender takes possession.

Selling Agent/Selling Process: Foreclosures are not sold by realtors; they’re sold by the lenders (usually at auction the courthouse steps of the county in which the property is located. The property owner doesn’t participate in the process. During a short sale, the homeowner is still part of the selling process.

Tax Consequences: A lender can sue you for the difference owed if the foreclose and they don’t sell the property for what’s owed on it.

While this can happen when you short sale your home too, it’s less likely to happen because you can do a short sale with “no recourse.” This means you ask the lender not to come after you for the difference (ie, take no legal recourse against you for the balance owed). Of course, they’d have to agree to it and you (and they) would sign papers to that affect.

For the reasons stated above, many lenders will gladly agree to a short sale with no recourse.

Which Hurts My Credit More – A Short Sale or a Foreclosure?

Contrary to conventional wisdom, the impact of a foreclosure and a short sale on your credit score is basically the same. Proof?

A few years ago, Fair Isaac, the people who invented the current credit scoring system (the FICO score), published a table showing exactly what happens to your credit score when you do a short sale, have a foreclosure, and/or go through bankruptcy.

Following is the data.

How Much Your Credit Score Is Lowered When You Do a Short Sale or Go Through Foreclosure

The real difference between the two when it comes to credit is how quickly you can recover.

Time It Takes Your Credit Score to Recover from a Short Sale and a Foreclosure (and Bankruptcy)

How Long Does It Take to Qualify for a Home Loan After a Short Sale?

According to 2008 Fannie Mae guidelines, you can qualify for an FHA home loan after a short sale anywhere from right away (ie, immediately), on up to 24 months.

Note: In order to qualify immediately for an FHA loan after doing a short sale, you must never have been late on your mortgage.

Learn more about how to qualify for a Fannie Mae home loan after a short sale, foreclosure, deed in lieu of foreclosure, etc. [link is to a pdf file]

How Long Does It Take to Qualify for a Home Loan After a Foreclosure?

You may have to wait anywhere from three to six years after a foreclosure to get a home loan. This is the main reason short sales are often preferred over having a foreclosure on your record.

Which One Is Better for My Credit Score: A Short Sale or a Foreclosure

This is a personal decision because it depends on what your long-range goals are. However, in most cases, if you have a choice, go with the short sale over the foreclosure. It’s the wiser decision — especially if you want to qualify for a home loan again in the next few years — in the long run.

Related Posts

Bank Foreclosure: Banks Walking Away from Foreclosed Homes

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

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

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.

In the past, if you “almost” lost a home to foreclosure, eg, did a short sale, did a deed in lieu of foreclosure, etc., you had to wait four to five years in order to qualify — under Fannie Mae guidelines — to buy another one. Well that’s no longer the case. Now, you can qualify in as little as two years.

According to the New York Times article, Fannie Mae wants to help some troubled borrowers get back into home market, the organization sent out a  a bulletin to lenders dated April 14 stating:

. .  . it is relaxing rules that prevented loan applicants who have participated in short sales or deeds in lieu of foreclosure from obtaining a new mortgage for extended periods of time. The new rules are scheduled to take effect July 1.

Is This Rule Change in Home Loan Qualifications a Slippery Slope into More Home Foreclosures?

Apparently not.

While Fannie is not making homeowners who’ve had trouble with home ownership in the past wait as long, they have tighted qualifying guidelines. For example, instead of a 3 or 5% down payment like in the past. Now the down payment has to be significantly more — 20 percent.

Home Loan Qualification Under Fannie Mae: Down Payment Determines How Long You Have to Wait

If a prospective borrowner can’t come up with that much, they’ll have to wait longer. How long depends on how much of a down payment they have, eg:

10% — wait 4 years, UNLESS applicant can prove that the loss of a previous home was due to extenuating circumstances (eg, loss of job, medical bills, etc.);

Less than 10% – could be longer than four years.

While losing a home you want is always hard, it’s not the end of the world. It is possible to recover, mortgage giants  like Fannie Mae are assisting in that recovery.

P.S.: Start a Business Cleaning Foreclosed Properties. While the foreclosure crisis has been a nightmare for many, it has presented a perfect small business opportunity for others. Learn how to start a foreclosure clean up business. Read how one foreclosure cleaning business owner rakes in $40,000/wk (not a typo).

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 loan modification process can be frustrating and confusing for many distressed homeowners. If you are considering contacting your lender about a loan workout to avoid foreclosure, you need to get as much information upfront as possible so you will be prepared and able to present your case in the best possible light.

Programs and guidelines are changing and it is getting much easier for homeowners to get the help they need. To help you understand how the process works and what you can expect, here are the Top 10 Questions and Answers.

Home Loan Modification: Frequently Asked Questions/Answers

1. What exactly is a loan modification? A loan modification is a permanent change in one or more terms of a borrower’s home loan, allows the loan to be reinstated, and results in a payment the homeowner can afford.

2. Can the lender include late charges in the Loan Modification? The federal plan mandates that the bank waive any administrative charges, late fees and penalties when offering a loan workout.

3. How will the new government programs help me get a loan modification? The Federal government has allocated $75 billion dollars to subsidize lenders and servicers who offer a loan workout to their clients.

Now, the banks will have a monetary incentive to offer help to qualified borrowers. In addition, homeowners who pay their new modified payments on time will be eligible up to $5000 credit to their loan balance.

4. How do I know if I will qualify for a loan modification? The number 1 criteria your lender is looking at is your ability to make the new modified payment now and in the future.

You need to supply the lender with proof of your income, along with a complete and accurate financial statement detailing your income and expenses to show them that if granted the modification, you will be able to afford the new, lower payment. You must also be able to demonstrate that you are facing a financial hardship-lower income or higher expenses for example.

5. Do I have to be currently delinquent on my payments to get a loan modification? President Obama has included a special incentive under the Home Affordable Modification Plan that will pay lenders an extra bonus for reaching out to homeowners not yet delinquent but at risk in the future. The goal is to help borrowers before they fall into default.

6. What is an acceptable Hardship situation? Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the lenders consider divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service to be acceptable reasons to consider a loan modification.

A compelling hardship letter included in your application is a very important part of a successful application.

7. Will a loan modification help me stop foreclosure? Yes, that is the goal-by working with your lender to find a loan workout solution, your loan is brought current and the foreclosure process is halted.

8. Can my missed payments be added back into my new loan modification? Yes, the arrears can be added to the new loan balance and spread out over the term to allow the loan to be brought current.

9. Can I do a loan modification myself or should I pay someone to represent me? That is entirely up to you and your comfort level with dealing with your lender.

The Treasury Department is strongly discouraging the payment of any fee to a third party to represent you in a loan workout. Regardless of what you decide, the first thing you should do is learn all you can about the process, your legal rights, and what it takes to get your application approved. An informed homeowner is harder to take advantage of and will have a much greater chance of success.

10. So how do I get started to modify my loan? Before contacting your bank’s loss mitigation department or a loan mod company, do your homework-learn as much as you can about the loan modification process so you can make informed decisions.

President Obama’s Home Affordable Modification Plan offers real hope for millions of homeowners who need a solution to stay in their home. Not everyone will qualify however, and interested borrowers will have to complete loan modification application forms, provide proof of their income and meet certain eligibility requirements.

Most lenders are participating in this new government subsidized plan, and homeowners are encouraged to learn how they can qualify and apply for a loan workout and avoid foreclosure.

You can get the help you need to apply and qualify for a loan modification by ordering and downloading the best selling handbook for homeowners, The Complete Loan Modification Guide.

This is a low cost, easy to read home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender.

Learn how to apply and qualify for the Obama federal program too. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

About the Author: For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com. Article Source: http://EzineArticles.com/?expert=Susan_V._Gregory

P.S.: You Can Save Hundreds of Dollars — Or More — Per Month on Your Mortgage:  There are homeowners just like you who have saved thousands of dollars in loan modification fees. And, they’ve lowered their mortgage payments by hundreds — and in some cases over a thousand dollars — a month. Get the details in this home loan modification kit.

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

Because of the foreclosure crisis we’re going through, new credit standards for purchasing homes have been put into place. Depending on which side of the fence you’re on, it’s either a good thing, or a hindrance to buying a home.

Here we’re going to look at the FICO score. Following is a look back at what FICO scores used to have to be to qualify, and what they need to be now.

First-Time Home Buyer Mortgage Qualifications: A Look Back at Old FICO Standards

On a recent news cast, the announcer blared from the screen that some credit card issuers were looking at making 740 the FICO score you needed to qualify for a credit card. It used to be that if you took a breath, you could get a credit card. Even pets could get credit cards (this is how free willing credit card companies were when extending credit).

So, what does this have to do with getting a mortgage? Well, who extends credit for credit cards? Banks.

And, who extends credit (loans) for mortgages? Banks.

Zero Down Home Loans: Get 100% Financing with a 580 or 620 FICO Score?

FICO scores have to be a lot higher than they used to be to qualify for a home loan. When I was a mortgage consultant, a prospective homeowner could qualify for 100% financing and a conventional mortgage with a 620 FICO score in most cases.

In a lot of cases, a prospective homeowner could qualify for 100% with a 580 FICO score — it would be subprime, but they wouldn’t have had to come to the table with any money nonetheless.

The New Reality: What Your FICO Score Need to Be to Buy a Home Nowadays

Now, banks have raised the bar on what your FICO score has to be to get the best interest rate . . . and it ain’t what you’ll read when you go online. Most sites still have it at 620 to 640. It’s not.

Many mortgage lenders now – whether they’re on the record or not – want you to have scores of 750- 780 to qualify for the best interest rates on conventional mortgages.

Refinancing a Mortgage: 720 Not Good Enough

As the editor of this site, I get a lot of insight from readers and from friends and acquaintances alike.

One friend of mine went to refinance his mortgage. He’d recently come back from being deployed, had paid off some bills and thought it would be easy for him to refinance. After all, his credit score was a 720, he’d been on his job for 13 years and had been in his home for more than five years.

But, even with all of this, he was unable to refinance.

I think a lot of banks are scared of where the market is right now – and how long it’s going to take it to recover.

Home Loan: How Much of a Down Payment Do I Need to Qualify for a Mortgage?

More Mortgage Questions Answered: In a future post here, we’ll look at what banks expect in the way of down payment nowadays.

Got Bad Credit: Learn How to Repair Your Credit So You Can be “Mortgage Ready”

Before you can fix your credit, the first thing you need to do is understand what it is and how lenders use it. Repairing your credit is like being part of some special club. You have to gain access to the rules of the “credit repair game” in order to be able to “compete” and clean up bad credit.

Learn the credit repair rules that banks play by so you can qualify for a home loan to purchase the home of your dreams.

First-time Home Buyer Loans: Need Down Payment Assistance to Qualify for a Mortgage? Get details on this in the video below.


P.S.: Business Opportunity: Learn How to Start a Foreclosure Cleanup Business. Read how one foreclosure cleaning biz owner makes up to $40,000/wk.

A common fear for homeowners facing foreclosure is that their wages will be garnished. This can cause added stress because these are already difficult financial times. Following is some info that may allay your fears as you go through this difficult process.

And the answer is . . .

No, as you go through the home foreclosure process, your wages cannot be garnished. The legalities behind this is that the home itself is pledged as the collateral for the loan (mortgage) – not your wages or any other property. So while you’re in foreclosure, your wages are safe from garnishment.

But, you’re not out of the woods.

What will happen moving forward if you are not able to become current with your mortgage is that your home will be sold. You have several options here. One of the most common is the deed in lieu of foreclosure.

Home Foreclosure: What is a Deed in Lieu of Foreclosure?

 It’s when the you (the home owner) signs over all rights to the home back to the lender — in lieu of allowing them to foreclose on the property. You can do a deed in lieu with recourse, or without recourse. You could be held responsible for the balance (deed in lieu with recourse), depending on what you work out with your bank/lender.

What you want to get from your lender in these circumstances is an agreement for a deed in lieu without recourse. This means the lender can’t come after you for any balance due.

Yes, your credit will suffer if you proceed with this option (with or without recourse). But at this point, who cares. Your credit is probably already in the dumps anyway.

Back to your wages being garnished . . .

Wage Garnishment & Home Foreclosure: Your Rights When Dealing with Creditors

Many unscrupulous lenders will use the threat of wage garnishment to try to bully you into continuing to make mortgage payments – even when you can’t afford it. Don’t fall for it.

And by the way, this tactic is patently illegal.

Bone up on your consumer rights when it comes to debt repayment. They vary from state to state. But across the board, creditors can’t bully you, lie to you or threaten you on any level. Remember this fact when dealing with creditors – whether you’re discussing wage garnishment during the foreclosure process, credit card debt or any other kind of debt.

Live Rent Free!

P.S.: Business Opportunity: Learn How to Start a Foreclosure Cleanup Business. Read how one foreclosure cleaning biz owner makes up to $40,000/wk.

Learn more about foreclosures, deed in lieu of foreclosure and wage garnishments in the video below.

Copyright © 2009 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Baltimore is suing Wells Fargo bank, contending that their lending practices during the height of the real estate boom has led to what is now a wave of foreclosures in communities throughout their cities. The New York Times article, Baltimore Is Suing Bank Over Foreclosure Crisis, states the case this way:

Baltimore’s mayor and City Council are suing Wells Fargo Bank, contending that its lending practices discriminated against black borrowers and led to a wave of foreclosures that has reduced city tax revenues and increased its costs.

Foreclosure Crisis: Banks Being Sued by Cities

As the foreclosure crisis continues and more and more cities grapple with declining tax revenues, the most obvious question is will other cities follow suit (pun fully intended)? And, if they do, who will pay? Banks are failing and/or being bailed out by the government every day. Will taxpayers once again be on the hook as cities struggle to stabilize neighborhoods racked by foreclosures?

What do you think?

Copyright © 2009: Foreclosure Business News

Desperate homeowners in some states may soon be able to get relief from bankruptcy judges to help stop foreclosure. How?

Bankruptcy Legislation May Help Stop Foreclosure

If you are under water on your house (ie, owe more on it that it will sell for), bankruptcy judges will be able to use legislation [the Helping Families Save Their Homes in Bankruptcy Act of 2009] specifically devised to stop foreclousres to write down mortgage debit. The Miami Herald article, Miami Judge Supports Bankruptcy Legislation Helping Homeowners, explains it this way:

A key component of President Barack Obama’s plan to curb the rising tide of foreclosures is to give bankruptcy judges the power to write down mortgage debt for people in bankruptcy court. It’s known in bankruptcy as a “cram down.”

Stop foreclosure through bankruptcy? To read an Q and A with a bankrupcty judge on how the process would work if the legislation passes, read Miami Judge Supports Bankruptcy Legislation Helping Homeowners.

Copyright © 2009: Foreclosure Business News