How To Buy A Foreclosure While Helping To Clean Up The Economy
Posted by Joseph Gentry | Under Foreclosure Thursday Jul 2, 2009The traditional real estate market has really taken a hammering in recent times. There is a foreclosure crisis, more homes are being repossessed by the day, No matter what plans are being put in place by Federal and State Government, it will be too late for many more home owners to save their property, their credit, and in many instances, the last shreds of their dignity. If you want to know how to buy a foreclosure, keep reading.
We are not blowing matters out of proportion with our opening paragraph, all of this is true, but the good thing is that property investors are getting in to clean up the market. Some may call them vultures, but they serve a real purpose, just as real vultures do. These investors clean up the foreclosure market buying and selling, which stabilizes the economy as well as adds value to the real estate market. With out these purchases and sales taking place, real estate would lose even more value than it already has.
The lender won’t get the full amount, but they certainly may get a great deal more than they might if the foreclosure went ahead. Foreclosures are very expensive, costing in the region of $50,000 and they can take a very long time to complete. In New York for example, it may take up to 18 or 24 months to complete, and in that entire time the debt on this property is a non-performing asset.
There is a way a home owner is able to do this with the help of and investors; in fact there are two ways to arrange a sale in pre-foreclosure. The short-sale and the short-sale buy back.
A short- sale has to be authorized by the lender which owns the lien over the home owners mortgage. It can only be authorized once the mortgage has gone into default and the home owner is able to impress upon the lender that he is encountering serious financial difficulty. This is not that hard to prove if serious financial difficulty is being experienced.
The home owner has to be careful regarding the investor he uses in a short-sale of a short-sale buy back, because there are many scam artists preying on people who have misfortune of being foreclosed on. So he needs a attorney who is versed in the short-sale process.
The investor wins if he can make a profit, the lender wins if they can get as much of the debt owed on the property sooner than later, and the home owner wins too. They are released from paying a mortgage they can no longer afford in a property with little or no equity and they salvage some of their credit record. Not all of it, but every little bit helps.
A short sale still means that the home owner will have a bad credit score, but not foreclosure on their record. It may be easier to recover from this slightly smaller blow, than it might be to have to recover from a foreclosure or a bankruptcy.
Recent Comments