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Foreclosure Avoidance Helpline
For FREE Recorded Information Call:
888.205.7914 ext 7
All Inquiries Are Confidential
Worried About Losing Your Home To Foreclosure?
Sometimes, bad things happen to good people. You are not alone. Nationwide, almost 20% of all mortgages are in default, meaning that they are 30+ days late with their payment. There are many different reasons for someone to be unable to make their mortgage payment, and regardless of what yours may be, there is most likely a way to avoid foreclosure!
The First King Team are Certified Distressed Property Experts (CDPE), and can help you find a solution. Whether your solution will keep you in your home, or allow you to sell your home in what is called a "short sale," thus saving your credit. Our goal is to negotiate with your lender and help you avoid a credit-destroying and emotionally-damaging foreclosure.
Auctioned, and bank owned or REO homes are #1 for foreclosures in the nation, and makes up over 15% of the national distressed property market.
There are many different reasons for someone to be unable to make their mortgage payment, and regardless of what yours may be, there is most likely a way to avoid foreclosure!
The First King Team are Certified Distressed Property Experts (CDPE), and can help you find a solution. Whether your solution will keep you in your home, or allow you to sell your home in what is called a "short sale," our goal is to negotiate with your lender and help you avoid a credit-destroying and emotionally-damaging foreclosure.
To see our Frequently Asked Questions about Short Sales, click here.
To speak confidentially with The First King Team about what your options are, simply contact us now.
There is light at the end of the tunnel, and we can help you reach it. Statistics show that 70% of people threatened with foreclosure take no proactive action.Do you want to know what your home is worth in today’s market? Set up an appointment to see what your options are. Call 888.205.7914 ext 7
Why Not Just Let It "Go Back To The Bank?"
While it may not seem like it now, there will come a time when your current financial troubles will pass. You will feel much better knowing that you did everything you could to avoid this devastating financial consequence. The chance at avoiding foreclosure takes only effort and cooperation on your part. As your agents, we will do all the rest, and invest our time, money, and effort.
Reasons To Avoid Foreclosure:
Issue |
Foreclosure |
Successful Short Sale |
Future Fannie Mae Loan – Primary Residence (Effective May 21, 2008) |
A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years. |
A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years. |
Future Fannie Mae Loan – Non Primary Residence (Effective May 21, 2008) |
An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years. |
An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years. |
Future Loan with any Mortgage Company |
On any future 1003 Application (Standard Loan Application), a prospective borrower will have to answer YES to question C, in Section VIII, that asks, “Have you had property foreclosed upon, or given title or deed in lieu thereof?” This will affect all future rates. |
There is no similar declaration, or question regarding a short sale. |
Credit Score |
Score may be lowered anywhere from 250 to over 300 points. Typically, this will affect score for over 3 years. |
Only late payments on mortgage will show, and after sale, mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points, if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months. |
Credit History |
Foreclosure will remain as a public record on a person’s credit history for 10 years or more. |
A short sale is not reported on a credit history. There is no specific reporting item for “short sale.” The loan is typically reported as “Paid in full, settled.” |
Security Clearances |
Foreclosure is the most challenging issue against a security clearance, outside of a conviction for a serious misdemeanor or felony. If a client has a foreclosure, and is a police officer, in the military, a government employee, a security officer, or any position that requires a security clearance, in almost all cases, clearance will be revoked and position will be terminated. |
A short sale, on its own, does not challenge most security clearances. |
Current Employment |
Employers have the right, and are actively and regularly checking the credit of all employees who are in sensitive positions. A foreclosure, in many cases, is grounds for immediate reassignment or termination. |
A short sale is not reported on a credit report, and is, therefore, not a challenge to employment. |
Future Employment |
Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have, and, in most cases, will challenge employment. |
A short sale is not reported on a credit report, and is, therefore, not a challenge to employment. |
Deficiency Judgment |
In 100% of foreclosures (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment. |
In some successful short sales, it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner. |
Deficiency Judgment Amount |
In a foreclosure, the home will have to go through an REO process if it does not sell at auction. In most cases, this will result in a lower sales price, and a longer time to sell in, a declining market. This will result in a higher possible deficiency judgment. |
In a properly managed short sale, the home is sold at a price that should be close to market value, and, in almost all cases, will be better than an REO sale, resulting in a lower deficiency amount. |
We are here to help. Simply contact us now.
We all know that foreclosures are caused by the default on the payment
of a mortgage loan monthly installment. Default of monthly installment
is primarily caused by debt-over burden. Debt over-burden in turn is
caused by a homeowners over commitment to financial responsibilities.
In other words, the home owner cannot
keep up with expenses, develops unsustainable debt and cannot
pay the mortgage. Understanding the underlying conditions that cause
default is a key to effectively negotiate with home owners and
initiate short sale transactions.
We at The First King Team understand that Sellers may be going through
a very emotional time in their lives during the foreclosure process.
If you can't save your home,
you can save your credit. Selling homes fast at any
price in any condition is our specialty. Before foreclosure becomes a
reality, let us show you how we can help. Contact us now to discuss
your options.
Save
Your Credit, Sell Fast.
Underlying Causes
of Foreclosure
Financial Slippage:
This is the condition in which most responsible, smart and hard
working individuals in foreclosure find themselves. We live in a
capitalist system society. The system creates more opportunities but
it is also less forgiving. Long term un-employment is devastating to
the middle class. So is the astronomical cost of health care. People
in this category often resort to tapping equity in order to make ends
meet. If matters do not get quickly resolved, the house becomes over
mortgaged; they default and end up in bankruptcy. Foreclosure comes
next.
Over-Indulgent Lifestyles:
It is often that people live at or
beyond their means. For these people, as soon as there is an income
disruption, extra expense or similar event, mortgage payments become
impossible to pay.
Interpersonal Problems:
Usually divorce. No one wants to take
responsibility for payments or one single income is insufficient to
make the payments. Therefore they default.
Death or Incarceration:
People in this category stop paying
sooner or later. Even if payments are up to date and performing, title
problems appear. Eventually someone decides that the banks should not
be getting paid. Default soon follows.
Over-Optimistic Lending Practices:
Often, in their
quest to get commissions, mortgage brokers encourage home buyers to
commit to the maximum mortgage payment level that they can possibly
sustain. Usually the reasoning is that the property will go up in
value and the home-owner will be able to refinance. It is not hard to
find 100% financed houses in which dual income homeowners pay up to
50% of their combined income in mortgage payments. Needless to say,
for these people just about any financial challenge will result in
default and possibly foreclosure.
Mortgage Lending Fraud:
This is often the result of mortgage brokers specialized in sub-prime
lending. These brokers embellish the financial capacity of unqualified
home buyers. The home buyers end up with high interest loans and
usually higher payments than expected. The result of this is that the
new homeowner defaults soon after buying the house.
Irresponsible Homeowners:
These are people that are
irresponsible with their personal finances and / or take advantage of
the system. They do things such as abandoning the property as soon as
they feel like it, or refinance the house in order get cash and let
the property foreclose.
These are the
primary underlying reasons for foreclosure. Often home owners in
foreclosure fit into combinations and permutations of two or more
categories at the same time. The underlying reason for foreclosure is
greatly helps in understanding where the home owner is at.
It is essential to understand the underlying reasons for foreclosure.
This, in combination with listening to the particular situation of
each homeowner, allows the investor to effectively negotiate short
sale purchases. If
you find yourself in this situation, rest assured, you are not alone.
The First King Team will help you sell your home in a timely manner
netting you the most money possible. If you are in the negative, we
will help you try and attain a "short-sale" if we think you could
qualify based on your individual circumstances. We will work with
your lender to negotiate a short sale thereby allowing you try and
save your credit. Short sales take a lot of time and require that you
work with us to get all of your documentation in a timely manner. We
will give you a list of the items we will need and it will be up to
you to get us this information as quick as possible and complete! We
are here to assist you, however, you must be prepared to work
diligently with us to resolve your individual situation. Understanding
Your World is what we do best!
HOW FORECLOSURE
WORKS
Foreclosure is the
extinguishment of ownership and rights over a property in order to
sell it for the purpose of paying a debt. For this to happen, the
following must be true:
1. The debt must be
collateralized by the property to be sold.
2. The debt must be
in default. This means payments are not up to date.
3. The creditor
must fulfill the legal requirements of the state were the property is
located.
Contrary to common
homeowner belief, the bank does not own the home. Unlike an auto or
boat loan (where the bank's name is on the title), real estate is
owned by the borrower. The property is collateral to the loan.
"Foreclosure" is not "repossession". Foreclosure does not happen
immediately after an owner is late on the mortgage payment. The
foreclosing creditor must take specific legal steps. Each state has
different laws governing the foreclosure process.
Foreclosure is the culminating event of a legal
process. This is the foreclosure process. A property is not
foreclosed until it is sold at auction and as per the state's
foreclosure process. That "the lender is foreclosing" or that a
"property is in foreclosure" really means that the lender has
initiated and is proceeding through the legal process to foreclose a
property.
Typically, as soon as there is a default, the lender initiates a
collection process. This is known as the collections period. This
is the best moment for a homeowner in default to reinstate and bring
the payments up to date. The length of this collections period varies
with each lender. However, generally speaking, if after three months
the homeowner has not resolved the situation, the lender takes more
drastic steps.
The foreclosure process starts if the creditor fails to collect. The
foreclosure process always starts with a legal notice to the owner
stating that if the loan is not paid or reinstated within a period of
time, the property will be sold at auction in order to pay the debt.
This period is known as pre-foreclosure. The length of the
pre-foreclosure stage depends on the state's law.
In California it is around 120 days. The owner has
until the foreclosure date to resolve the default. Solutions for
resolving the default range from reinstatement (bringing the loan
current by catching up on past due payments), refinancing, paying off
the debt in full, or the selling the property to another party in
order to satisfy the debt. If none of the above happens by the auction
date, the property will be sold to the highest bidder. Foreclosure is
this short and specific event. The proceeds from the debt are used to
pay the creditors. Anything left belongs to the owner of the
foreclosed property.
Troublesome
foreclosures happen when properties are over-mortgaged. In other
words, the amount of money owed exceeds the value of the property. In
these situations, the only way for the property owner to get out of
debt (other than paying the debt) is for a short sale to happen prior
to foreclosure.
Over-mortgaged
properties are common. This usually occurs when second, third and
sometimes fourth mortgages are taken out on a property. Liens are
another reason. 100% financing is another source of this problem. 100%
financed properties rapidly become over-mortgaged if there is a
default, because if the owner stops paying, the debt on the property
will usually increase faster than the property's appreciation. In
addition, once the owner is in default, usually taxes, homeowner
association fees and even utilities get neglected. Furthermore, and
very commonly, maintenance is deferred and the property quickly starts
becoming less valuable.
Sometimes
accumulated debt can exceed 130% of the property value. In a
pre-foreclosure situation, these secondary mortgages are at the mercy
of the lender who is in first position. They worry about the chances
of recovering their money if the first mortgage holder forecloses and
the property sells at the auction for a low amount. The subordinate
lenders are often willing to negotiate discount prior to foreclosure
in order to mitigate their losses.
Knowing the foreclosure process is a critical component in
pre-foreclosure investing. The
First King Team has experience and has been in the real estate
market both during sellers markets and buyers markets and therefore
has seen it all... more than once!... This knowledge is
invaluable for investors, real estate brokers and mortgage brokers
engaged in short sales. Nothing
compares to working with a team who have already been down the road
and are prepared for the "What next" phase...
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