Need help with a potential foreclosure soon!?
Question:
I would say that your friends need to act fast.
I'm sorry to hear that you got stuck in the middle just by referring him. It's not your fault that they didn't interview the guy. Looks like they have 3 options:
1. Sell property quickly as-is and take loss
2. Take person to court knowing there is a chance of losing the house in the process
3. Arrange meeting with mortgage lender for other options including forclosure, re-financing (not recommended), extension on payments.
Your friends might have a "contract" with this guy, but it seems that your friends are the ones that actually owns the house right? In the end, they are responsible for the mortgage and need to find a way to make a quick fix now and pick up the pieces later.
They could advertise to lease option the home to another tenant buyer, requiring them to put an option deposit down. (hopefully enough to cover the arrears) Then the monthly rental amount should be enough to cover the mortgage. If the rents in the area are lower than what their monthly payment is, have them credit the tenant buyer an amount of money every month, to go toward the purchase of the house. There are a lot of ways to work the option.
I could give you a more specific scenario if I knew more details on the property.
What is the location of the home?
About what is the dollar amount that they are behind?
What are the monthly payments?
What is owed on the house?
What are normal rents in the area for the same square footage of the house?
Is there any equity in the house, or are the upside down?
Another way would be finding someone to do a short sale with the bank.
they need to get advise from an attorney.
well, with a lease option they most likely got a lump sum in the beginning for the purchase of the 'option' protion, correct?
if they didn't then they are pretty stupid for not collecting money for signing an option to this guy. if they did, then what did they spend the money on. usually options are thousands of dollars. did they save it until they were sure they were out of foreclosure? probably not, because your friends are probably using the same financial sense that got them into foreclosure in the beginning.
the lease should have been contingent on the investor paying the rental payments on time. since he did not, they are out of the requirement to sell to him under the option. go look for another buyer
this is unfortunate that this is happening to your friends, but it is not unusual. in today's real estate market foreclosures are rising at an extremely fast pace.
what has happened to your friends is called RENT SKIMMING and is against the law.
as for the foreclosure, they need to get out before the marshall comes and puts them out.
I have an included a link of foreclosure laws and also rent skimming laws by state...simply click on the state you are in and read...this will answer alot of your questions.
http://www.foreclosures.com/pages/state_...
good luck to your friends
Ouch! Sounds like a bad situation your friends are in. Here's a list of some options that might be applicable to the situation, and you might be able to get the investor and your friends together on some way to save the home.The list of various methods to stop foreclosure that is presented below is a nearly comprehensive accounting of the most common ways homeowners can use to save their homes, either by staying in them and avoiding foreclosure, or by getting out of a bad situation with as much of their financial lives intact as possible. There are really no magical ways to end the foreclosure process -- but there are enough tools that homeowners have available, that they can choose from a number of options to help them out of their hardship situations.
1. Save up and get current on the mortgage by paying back the payments you've missed, plus the interest, late fees, attorney fees, etc. Understand that there are often thousands of dollars of extra charges that are added once you start missing payments and especially if the lender hires a law firm to pursue the foreclosure.
2. Work with the lender to put together a repayment plan, which would require you to put down part of the amount you are behind now and pay back the rest over a period of months, along with you current monthly payment. Usually, repayment plans can be worked out through your lender's loss mitigation department, and will result in you paying almost twice as much per month as your regular mortgage payment. This is to help you get caught up on the payments you missed while you are paying your original monthly obligation.
3. Work with the lender to modify the terms of the loan to say that the missed payments are spread out over the life of the loan or put on the back end of the loan. This is called a mortgage modification or loan modification. Some lenders will not do this because they do not hold the paper to be able to modify it. This is especially true for mortgage servicing companies, who only service their loans and collect payments, but who do not own the loans.
4. Refinance -- find a hard money lender or traditional lender that will consider foreclosure refinance loans. Qualifications include lots of equity and lots of income, since your interest rate will probably be over 10%. Foreclosure refinance loans can be difficult to qualify for and may result in higher monthly payments, but they are a good way for homeowners to get a fresh start with a new note and new lender.
5. If you have an FHA loan, you can get a one-time loan from the FHA that will bring you current and is placed as a lien on the property that you would have to pay back if you sell or refinance the home. This is called a partial claim. You would have to contact the FHA directly for this one time payout to get you caught back up on your mortgage.
6. Sell to a private investor or friend/family member and lease/rent the property back from them. That clears off the foreclosure loan on the property and uses someone else's good credit to get a new loan and allows you to stay in the property. Investors can also work out short sales on properties, allow they usually do this in the hope of flipping the property by reselling it quickly at a profit.
7. Bankruptcy will stop the foreclosure process, but is usually an expensive alternative to setting up a repayment plan, mentioned above. Attorney fees, trustee fees, court costs, and high monthly payments cause a lot of people to fail their bankruptcies. Only consider bankruptcy if you desperately want to prevent foreclosure and if you have a significant amount of income you can dedicate towards the bankruptcy payments.
8. Short sales are a good option if you owe more on the property than it is currently worth. A short sale means the bank accepts less than what they are actually owed, and would allow you to get out of the loan, at least. The bank would not be able to come after you for the rest of the loan amount, since, by accepting a lower amount, they forgive the rest of the debt owed on the mortgage.
9. Sell outright if the property is worth enough and you have a willing and able buyer. List the house yourself of through a local real estate broker. In some cases, it is the right decision just to unload the house to stop foreclosure and focus on repairing your credit until you can purchase a new, more affordable home in a few years.
10. If 1-9 do not work, you can offer the bank a deed in lieu of foreclosure, which means you're voluntarily giving the property back to the bank and they are agreeing that the property is payment in full of the loan. This is not much better than a foreclosure, and you have to leave the property anyway, but it will prevent the sheriff sale and eviction process. The bank will not be able to ask for any extra money or sue you for a deficiency judgment, because they accept the property itself as satisfaction of the loan.
11. If 1-10 do not work, you can just move out and walk away and forget about the property. This is definitely not recommended if you care about your credit and plan to borrow money for several years, but foreclosure should teach you not to rely on banks to help you out when you face a hardship. All they really do is promise great deals when you think of going with them, and then throw you to the foreclosure dogs if you miss a payment. Many homeowners simply walk away because the foreclosure situation is so intimidating, but, as listed above, there are numerous options that are better than just giving up on the property.
Those are the most common options that can be used to stop foreclosure. There are a few others (suing your bank, etc.), but they involve much more cost and legal involvement and may not end up stopping the foreclosure process in the end.
Hopefully everything works out with the house, though. Good luck.
ForeclosureFish
http://www.foreclosurefish.com/...
Here is a good article about i found in the net about the steps you need to take to keep you from being foreclosed
http://www.badcreditresources.com/articl...
I hope it can help.
You had no way of knowing how that would turn out. Are they keeping up with their mortgage payments? At least to avoid the 120 day mark? They need to find a broker to help them get out from under the foreclosure before they try anything else. Yale Mortgage serves a lot of the east coast. Not sure where they are. If you need some help, please email me at processing@nycap.rr.com.
I process mortgages and know of a few good brokers/lenders that MAY be able to help them, depending on how far they have let this get.
One of the problems with any plan to stop foreclosure is that homeowners who are behind in their payments invariably end up the targets of massive mailing and phone call marketing campaigns from foreclosure help companies who are offering their services. With so many potential scams operating in the real estate and mortgage industries, though, it becomes very difficult for foreclosure victims to know who to trust when they need additional assistance in their efforts to save their homes.
Homeowners may receive upwards of several hundred post cards, letters, or phone calls every week from potential foreclosure service providers and self-proclaimed experts. Before working with any of these companies or individuals, it is important for foreclosure victims to do enough research on the service providers and the methods that they use to help homeowners in their situation save their homes from foreclosure. There are a number of ways to complete this due diligence, such as searching on line, calling the Better Business Bureau, and contacting the state attorney general to determine if a pattern of complaints exists.
However, it is also important to be aware of the fact that not every foreclosure help company will be trustworthy, regardless of what their current reputation may be. In fact, there are a number of foreclosure scam companies who, as soon as they receive a complaint from a consumer through a regulatory agency, immediately shut down their current business and simply change the name of the company, change the website, and use different contact information. They then appear to have a pristine record with the Better Business Bureau and regulatory agencies, even though they are actually a fly-by-night foreclosure scam.
Another pitfall that homeowners experience when working with a foreclosure service provider or loss mitigation consultant is having a constant sense of doubt about whether the home will be saved. If the client does not believe that the company can help them, then there is no substantial relationship between the foreclosure company and the foreclosure victim, and the chances for being able to stop the foreclosure process drop dramatically. This is one reason why homeowners should do enough research on the loss mitigation company or other service provider that they work with, and interview several companies to find the one that they feel most comfortable establishing a relationship with.
As cliched as it may sound, the best advice for homeowners after they have done all of their homework may be simply to trust their gut feeling about the foreclosure company they work with. They may not end up being taken advantage of by working with one of these companies, but if they intuitively feel that the company can not help them, then the company will most likely not be able to achieve the desired results and save the home from foreclosure. If homeowners create a "self-fulfilling prophecy" that results in losing the home, then there is most likely no company, investor, or other individual who will be able to help them.
For homeowners who want to utilize a do-it-yourself approach to saving their homes, a number of products and services are offered on line through a variety of government and private websites. Various reports, educational materials, form letters, and packages are available through numerous sources on line, and can all contribute to foreclosure victims being able to get the right amount of mortgage help and foreclosure advice that they need to be able to save their homes and stop foreclosure on their own.
The most important parts of any plan to save a home from foreclosure is to learn as much as possible about how foreclosure works, what options may be used to save a home, and which mortgage help companies really specialize in providing the homeowners with the assistance they are looking for. Negligence in any of these areas is a quick way for the homeowners to find themselves taken advantage of by a predatory foreclosure company. In foreclosure, the best offense is always a good defense based on research and a solid knowledge of how foreclosure works.
I found http://how-to-buy-foreclosure.com... and they had some great information. I actually bought the ebook package, learned a lot and am working on my first deal highly recommended by me. Anyone else check out this site? I enjoy ebooks cuz I can read them on my computer and everyone I get gives me a little nugget of information that is going to help me succeed. . This sites info really gave me everything I need to know... I think I can finally stop wasting my hard earned cake on seminars, books, ebooks, audio tapes on how to do foreclosure and pre-foreclosures. But check it out for yourself, hopefully it helps you like it did me.
Peace be with you
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