Last week here, we discussed Errors & Omissions (E&O) insurance. As a foreclosure cleanup business owner, another type you’re likely to hear a lot about is General Liability insurance.

Here, we’re going to discuss what this is and how it differs from E&O insurance. Insurance is an important part of every business. And, it’s vitally important in services businesses like this one (ie, dealing with properties) where accidents, theft and a host of other problems can occur.

Hence, knowing what you need and why is critical to landing jobs. No insurance, no job. Proof? Read this Advice from a Banker Who Handles Foreclosed Properties.

What Exactly is Errors and Omissions (E&O) Insurance?

This type of insurance is commonly referred to as professional liability insurance. Professionals like realtors, brokers, financial advisors, etc. are required to carry it. It’s akin to malpractice insurance, for it covers errors and/or omissions (mistakes/mishaps) that these types of professionals make that cause financial harm to another party.

E&O insurance protects/covers those who carry it from lawsuits that relate to an error they may have made while providing their particular type of service.

Note: E&O insurance DOES NOT replace liability insurance. It must be carried separate and apart from standard general liability insurance.

In last week’s post, we explained why foreclosure cleaning businesses, for the most part, DO NOT need Errors & Omissions Insurance.

What is General Liability Insurance?

General liability insurance for the most part covers claims against bodily injury, personal injury, advertising injury and property damage. Now as a foreclosure clean up business owner, you DO need this type of insurance – for obvious reasons.

Note: Most are not familiar with “advertising injury.” This covers the policy holder in case they are sued for something like slander or false advertising.

The Primary Difference between Errors & Omissions and General Liability Insurance

Just in case you didn’t catch it, E&O insurance covers claims that result in a “financial loss” another party may have suffered because of your negligence (mistake, mishap, error).

General Liability insurance covers claims that result in personal injury, bodily injury, advertising, or property damage.

Foreclosure Cleanup Business Owners: What to Do If You’re Asked for an Insurance You Don’t Have

Many times, the company requesting the insurance may not know why it’s necessary for you to have it – especially in the case of E&O insurance. It is NOT an insurance the vast majority of foreclosure cleanup businesses need.

Impress upon the company requesting the insurance exactly what you do and exactly what type of coverage you have (and how much of it); also offer to send them proof.

If they persist in asking you for, for example, E&O insurance, ask they why you need it. Refer back to the June 4^th post on Errors & Omissions insurance for further clarification (ie, the portion that explains that you’re not a realtor or broker and therefore, are not required to have this type of insurance as a contractor/subcontractor).

Learn more about what types of coverage and how much of each you’ll need in this detailed booklet on foreclosure cleanup business insurance.

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.

Well, the great elected leaders in Ohio have shown just how much they care about homeowners facing foreclosure — and it ain’t a hellvua lot!!

What have they gone and done? How about taking their summer recess without voting on a measure that would have  ”put a six-month moratorium on home foreclosures, requires notification to renters when an owner files for foreclosure, and mandates registration of home loan servicers.” [Source, Homeowners ignored, ToledoBlade.com]

Looking for a Home? Buy a Foreclosure Cheap & Enjoy Instant Equity

It’s no wonder the home foreclosure crisis is not getting solved. If this is the way elected officials are acting, we could be stuck in this home foreclosure crisis a lot longer than is necessary.

According to the aforementioned article, Ohio had record filings of home foreclosures in the first quarter of this year. The average Joe is literally screaming for help — and what do our senators do - they take a friggin’ vacation!

And, when there’s a budget shortfall because fewer property taxes are being collected, who are they going to turn to — good ole Joe Schmoe. They’ll raise the property taxes on those who have managed to hang on to their homes, or raise sales taxes, or find some other way to stick it to the average citizen who’s just trying to get by.

But isn’t that always the case?

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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.

There’s a dark side to foreclosure cleaning that is starting to come to the forefront. The home foreclosure crisis has been going on since roughly the fall of 2007. And, as with any type of business, there will always be an unsavory element.

In the foreclosure cleanup business, this takes many forms, as discussed in the Detroit Free Press article, Foreclosures go wrong as lenders, cleanup crews cut legal corners.

Foreclosure Cleanup Companies Stealing Personal Property

A homeowner featured in the aforementioned article said that he had over $60,000 in personal property stolen from a home he’d managed to rescue from the brink of foreclosure.

Note: Some foreclosure cleanup companies sell the property they take from foreclosed homes. One could surmise that there’s an inbuilt incentive for disreputable firms. Hence, be sure to deal with a reputable foreclosure cleaning business — ie, one that’s licensed and insured.

It was a home that never should have been trashed out in the beginning, as the homeowner featured borrowed the money from a family member and paid off the loan in cash.

So what exactly happened? The article states:

His home had been trashed out . . . by an unlicensed crew sent there by his lender, who had been told by the law firm that handled the pre-foreclosure paperwork that the house had not been redeemed and had been foreclosed upon.

The homeowner is suing – the lender, several trashout companies and the debt collecting law firm that was assigned to collect from him.

Overzealous Lenders & Debt Collection Firms to Blame for a Lot of This Dark Side of the Foreclosure Cleaning Business

This homeowner’s property was wrongly taken because of an error made by the debt collection law firm (presumably acting on behalf of the lender).

As there are so many foreclosures nowadays, lenders are overwhelmed to the point where one hand doesn’t know what the other is doing, as was discussed here in the article on how Chase bank has been mishandling its foreclosed properties.

Read more about his this suit by this homeowner is seeking to become a class-action suit [foreclosure cleanup class action suit coming?], which means that the lawyers can sue on behalf of many plaintiffs at once. Many who deal with foreclosures say this is a necessary measure, as it’s more common than many think.

As one lawyer in the article put it:

It’s [foreclosed properties being mishandled] like the Wild West out there.

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.

Some foreclosure cleaning business owners report being asked to prove that they have up Errors & Omissions insurance by larger contractors before they can be considered for subcontracting opportunities.

Here’s the real deal on this type of insurance.

ANSWER TO QUESTION ABOUT ERRORS & OMISSIONS INSURANCE FOR FORECLOSURE CLEANUP BUSINESSES

The answer is, you really don’t need errors and omissions insurance to handle simple trashout jobs.

Many of the larger companies probably ask potential subcontractors for it because they use the same application process as real estate agents and others who handle foreclosed properties. FYI, realtors are required – as part of their trade – to have E&O insurance.  Hence, it’s a box that must be checked on many forms for realtors.

If larger companies use the same form, many assume that if the box isn’t checked, then you are “missing” something – when indeed it is not required at all.

Simply inform those who request it that you are NOT a realtor (ie, you do not handle foreclosed properties). Impress upon them that you are a foreclosure cleanup business – and you are not required to carry Errors and Omissions insurance as part of your trade. Read more on the type of insurance you need for your foreclosure cleanup business.

Learn more about what types of coverage and how much of each you’ll need in this detailed booklet on foreclosure cleanup business insurance.

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.

In yesterday’s post on stopping foreclosure, we relayed how Chase bank was literally and figuratively clueless when it came to helping the homeowners whose loans they own stop foreclosure.

Well, there’s good news. One bank seems to be coming through for homeowners trying to stop foreclosure — Bank of America.

The large bank is writing down the principals of homeowner loans. What exactly does this mean? The HuffingtonPost.com article, Bank Of America Executive Acknowledges Poor Service In Mortgage Mod Program, details it best, explaining:

. . . an example of a homeowner who owed $250,000 on a home worth $200,000. The bank would take $50,000 off the mortgage and put it in an interest-free forbearance account. If the homeowner keeps up with his payments on the $200,000, the bank will forgive 20 percent of the forbearance account for each of the next three years, and for an additional two years if the homeowner remains underwater.

This is what many homeowners — and President Obama’s prevent foreclosure program — have wanted all along.

Finally, one big bank is playing ball.

Let’s see if others will follow — or force the hand of many homeonwers who are trying to prevent foreclosure; many of who will just do the “jingle mail walk.”

What’s the problem with Bank of America?

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.

To be fair, it’s not just Chase bank that’s out of the loop when it comes to what’s happening with foreclosure loans and modifications; it’s just that they’re an obvious target when they keep popping up in the news with major blunders, as was discussed in this prevent foreclosure post which featured the lender.

The latest example is of a California couple whose home was foreclosed on – unbeknownst to Chase – who owns the loan. The homeowner was actually on the phone with a Chase representative when the real estate agent knocked on his door to tell him his home had been foreclosed on the day before.

The homeowner’s response:

I literally handed the phone to him [the real estate agent= and said, ‘Why don’t you tell this guy from Chase?’

California has a pending law to help prevent foreclosures – and clear up some of the confusion around the situation.

Read more about this foreclosure loans legislation and how it is projected to help even more homeowners stop foreclosure.

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.

Foreclosure homes for sale are all over the place now. And, many newbies are jumping into the market trying to capitalize – either as an investment or for their primary residence. But, just because a home is in foreclosure does not mean it’s going to be a steal.

There are three types of foreclosures. Following is what they are – and which one is the best bargain.

Foreclosure Homes for Sale: The 3 Types of Foreclosed Properties Explained

Preforeclosure Properties: As the name suggests, these properties are still with the owners; they haven’t been put on the auction block, so to speak. BUT, they’re headed there.

Many times, you can get good deals from owners who may be willing to do short sales, let you take over payments, etc. Of course, all of this has to be approved by the lender. Remember, until a home is completely paid off, it still belongs to the bank so you just can’t make a deal with the owner. You’ll always have to be approved by the bank as well.

Courthouse Sales (Sheriff’s Auctions): These are exactly what they sound like. The lender is selling the home at auction to the highest bidder.

Now even here, while there are deals to be had, it’s not as cheap as you’d think. Lenders put a home on the market starting at what’s owed on it usually. So, if a homeowner owes $150,000 on a house that he paid $185,000 for 10 years ago, for example, the banks starting bid will be $150,000.

You have to have your financing all lined up because if you win a bid, you have to pay up rather quickly. And, there’s no home inspection beforehand. This is why experts advise leaving these types of “deals” to those who know what they’re doing, eg, professional investors.

Otherwise, you could wind up with a lemon of a home, having to sink more in repairs than you bargained on. Not the best way to go if you’re a newbie.

Repossessions: If a home doesn’t sell at auction, it stays with the bank (the lender). Banks/lenders are not in the real estate selling business. They’re in business to loan money. It’s important to know this because they try to unload these repossessions (REOs, which stands for real estate-owned properties) as quickly as possible.

You can pick up a good deal here because number one, the property didn’t sell at auction. So lenders are more eager – which means they may drop the price, do special financing offers and even do repairs (just don’t expect cosmetic repairs). And another thing, you get to have an inspection here (unlike with courthouse sales of foreclosed homess, where the properites are sold “as is”).

If you’re new to buying foreclosed homes for sale, preforeclosure properties and repossessions are the ones to go after.

Foreclosed properties bought at sheriff’s auctions are just too risky. Learn more about foreclosure homes for sale for new investors.

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.

Foreclosure Business News’s editor will be on vacation from Monday, May 24 through Monday, May 31st. The site will be updated again on Tuesday, June 1st. Meanwhile, enjoy the following posts.

Foreclosure Cleanup Business Advice

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

Foreclosure Cleanup: Why Winterization is a Lucrative Service to Offer on Foreclosed Homes

See complete library of ebooks on foreclosure cleanup and how to invest in cheap foreclosures.

Buy Foreclosures Cheap Advice

Foreclosure Homes for Sale: Why the Time to Buy is Now, Especially for First-time Homebuyers

How to Buy Foreclosures Cheap, Retire Early & Secure Your Financial Future

Stopping Foreclosure Advice

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

Home Foreclosure News: Obama Admn Offers New Help for “Underwater” Homeowners  

Home Foreclosure and Your Credit: Details of the Mortgage Forgiveness Debt Relief Act of 2007

Stop Foreclosure: More than 90 Days Late on Your Mortgage? Here’s a Foreclosure Prevention Program for You

California Foreclosure Law: How to Stop Foreclosure Even If Your Home Is Sold at Auction

When home foreclosure specialists can’t get a clear handle on what’s going on with the housing market, it’s no surprise that many homeowners find themselves in “foreclosure limbo” when trying to refinance or modify their home loans.

Even Housing Experts Can’t Say for Sure What the Hell Is Going On with the Housing Market

According to the New York Times article, Mortgage Data Leaves Bankers Uncertain of Trend, bankers can’t say for sure what some recent data put out means. The article states:

Warning that “fundamental [housing] market factors” might be exercising undue influence over the seasonal [mortgage] numbers, the mortgage bankers said they did not know whether the optimistic or pessimistic sequence was more accurate. . . . “We may be at a point where the [housing] market is changing for the better, but we can’t be sure because of the confounding effect of seasonal differences” . . .

Facts NOT in Doubt About the Home Foreclosure Crisis

What’s known for sure is the following — and most of it ain’t good news:

Mortgage Delinquency Up: About 10% more homeowners were delinquent on their mortgages when compared to the same time last year;

Home Prices Falling: The decrease was .3% from February to March. This continues to put more homeowners underwater (or further underwater), which housing experts fear can cause many to simply walk away from their homes (ie, do a voluntary foreclosure);

New Home Applications Fall: The government’s $8,000 homebuyer tax credit expired on April 30th. This could be a contributing factor to the 27% drop in new home applications — with a further drop entirely possible as the economy still struggles to get back on track and credit remains hard to get (for home loans, car loans, small business loans, etc);

More Prime Borrowers are Defaulting on Mortgages: While the home foreclosure crisis started with subprime mortgage borrowers, over the last year and a half or so, more and more homeowners with “good credit” (ie, who had conventional, fixed-rate home loans) are now defaulting on their home loans. The aforementioned article states:

The percentage of new foreclosures in the first quarter [of this year] that were prime fixed-rate loans — traditionally the most conservative kind of mortgage — was 36.7 percent, up from 28.9 percent last year (emphasis added).

Many of these, of course, are due to job losses — and in industries that aren’t coming back — as we discussed in the post, Stopping Foreclosures and President Obama’s Job Summit: What’s the Connection?

Home Foreclosures Now Happening Outside of “Bubble Markets”: A lot of the home foreclosures that happened initially were in what’s known as sand states with bubble markets, eg, Arizona, Florida, California, Nevada.

Now though, foreclosures are being seen in states where the economy is struggling. This makes sense because as alluded to in the point just above about prime borrowers defaulting — if a homeowner doesn’t have a job, they can’t afford to pay the mortgage.

Why So Many Homeowners are In Limbo When Trying to Refinance or Modify Their Home Loans Now

The final thing that’s leading to more foreclosures has been the government’s “prevent foreclosure” program which hasn’t helped nearly as many homeowners as it was intended to. Banks are simply refusing to play ball in some cases, as we discussed in:

Prevent Foreclosure Help: Another Big Bank Not Playing by the Rules — If Your Mortgage is With Chase, You’re Screwed; and

Stopping Foreclosure: Big Bank That Received $25 Billion in Bailout Money Against Mortgage Modification Help for Homeowners.

Because of “inaction” by a lot of lenders, many homeowners who want to refinance or modify their existinghome loans — who NEED to take some kind of action to stop foreclosure — are feeling like they’re in some type of holding pen with no start time for the race.

They’re in limbo — and many are running out of time and money — which means more home foreclosures may be on the way. It kinda makes one feel:

Oh what a tangled web bankers and lenders weave when they decide to fleece and deceive unsuspecting homeowners.

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.

After reading this post (Foreclosure Cleaning Biz Advice: What Are “Assuming Institutions” & How to Make Money from Them), a bank exec who handles foreclosed properties dispensed some really good advice as to what he expects from foreclosure cleaning business owners who approach him for work.

And you know what, most foreclosure cleaning businesses are not giving him what he needs. This means that if you heed his advice, you may be able to land more foreclosure cleaning contracts.

Foreclosure Cleanup Business Advice: What a Bank Exec Who Handles Foreclosed Properties Said

Following are three things this bank exec who handles foreclosed properties looks for from foreclosure cleaning business owners:

Resume (or some type of professional profile)

List of Services and Rates; and

License and Insurance.

He wrote specifically (forgive the typos; it’s the info he dispenses that’s supremely important):

Your number 1 tip [in the aforemetioned post]  is a good one, not a day goes by where i am not bombarded with calls or people who drop in that want to clean my foreclosure listings. I always ask for a business card and a resume. 90% dont have a card and no one ever has a resume with them. So then i ask for a list of what they offer with any assoicated prices, again they are not prepared and last ly i ask are you insured, by then most of tehm are on their way out.

I know that is tough and cold but it is my name on the sign and i am resposnible for anything that goes wront for teh properties i sell and manage for the banks. [emphasis added] I have had people come back though and be prepared and they are no dioing a great job for me. So my keys are be a legitaimate business, be insured and be prepared, have business cards, a resume and literature of what you do.

As he outright states - and I’m paraphrasing — it’s his butt on the line if things are done right. And, he’s not about to risk it by doing business with comapnies that are unprofessional, unlicensed and uninsured, as we’ve discussed time and time and time again on this blog.

So heed his words — and you could start landing more foreclosure cleanup jobs.

Learn more about foreclosure clean up business insurance.