Archive for the 'Finance Foreclosures' Category

Sheriff Nygren had an incident with a 73 year-old renter. The poor old man will be evicted not having any idea that the room he is renting, owned by a Woodstock-man, was in foreclosure. The old man was so thankful that he was made aware and hopes to make arrangements.

There is no law that requires advance notifications. In fact, sheriffs used to be hired by banks to throw out residents from foreclosed homes or apartments even without notice.

This made Nygren initiate a policy in which the to-be-evictee-due-to-foreclosure must be contacted personally before scheduling the actual eviction. He does not want to see the evictees surprised that one day a moving truck appears at their doorstep, taking away their stuff even if they have a handful of paid rental receipts.

A lot of eviction of renters due to foreclosure is happening in Cook County, Illinois. This made Sheriff Tom Dart to temporarily defer these evictions against court orders.

In McHenry, Deputy Edward Sanderson puts a door red-colored hanger in to-be-foreclosed-homes that needs to be alerted. The residents then have to call for an appointment to meet up with the Sheriff’s office. If no call happens, the deputy needs to re-visit the home around 5 times for the next 5 working days.

These contacts give the deputy the chance to ask questions and know when eviction will be possible. Sgt. Duane Cedergren says that eviction usually is scheduled 1 to 2 months after the arrival of the notice at the sheriff’s office.

Cedergen said that around 100 foreclosure-linked evictions occurred this year, marking a great number of Illinois foreclosure cases.

This simple gesture of notification makes eviction less traumatic. Cedergen even considers it fulfilling. Then, the to-be-evicted express their appreciation to the sheriff office’s efforts in warning them to the foreclosure caused eviction.

Some studies showed that areas that see an increased in foreclosure sales experienced a 1 percent drop in home market values. Most often the drop in home market prices is due to a buyer’s perception of the neighborhood, which may ultimately lead to his refusal to reside in the area.

A previous owner’s neglect of the foreclosed property also contributes to the decrease in home prices. A home in need of repair and a deteriorating surrounding may influence other homeowners in the neighborhood to also sell their properties as they deem the area not fit to live in.

One disadvantage of buying a foreclosed property is that it is sold as-is, hence, buyers do not have the guarantee of getting a good deal.

The value of a property is appraised in three ways:

• Cost – includes value of home and land
• Income – for comparing multiple units with capitalization rates as basis
• Market value – use to compare the property to at least three comparable sales within the neighborhood.

Yuke and Associates appraiser, Derek Yuke prefers arm-length deals when making an appraisal. Arm-length transactions involve a sale of a property at market value by a willing homeowner and buying of the said property by a willing individual, with neither of them under duress.

Meanwhile, foreclosure sales can also affect homeowners’ associations. A distressed sale within a neighborhood means that the homeowner failed to pay his property’s prorata share of dues in the homeowners’ associations.

To recover funds lost due to delinquent payments, homeowners’ associations are forced to increase their dues. Even if homeowners’ associations are authorized to foreclose a property if dues are not paid by its owner, most of them do not have the means or funds to do it.

Sometimes, associations forego the option to foreclose when the property’s mortgage is higher than its market value.

It cannot be denied that the present housing conditions are creating great investment opportunities for buyers. If you even consider the housing supply and home prices, you could say that it is indeed a buyer’s paradise.

According to the US Bureau of Census, there are already about 18.6 million empty homes since the first quarter of this year. Approximately 2.3 million of these empty homes are categorized as unoccupied homes for sale. This was 3 percent more than that of last year.

The increase in the number of empty homes can only be attributed to the rising foreclosure rate experienced nationwide. Most of these foreclosures were the result of default ARMs or adjustable rate mortgages. This type of mortgage has been quite popular during the last housing boom and put many buyers in financial crisis. With interest rates resetting after a couple of years, many of the borrowers who took out this kind of housing loan found themselves with ballooning mortgage payments.

In addition, many borrowers were approved for mortgage amount which they could not really afford. Because of relaxed and aggressive lending guidelines, many of these borrowers were not actually qualified. And now they have to deal with what the experts call us “upside down” mortgage or mortgages whose balance is now more than the property’s present market value.

It did not help that the growing inventory of foreclosure homes has caused home prices to drop dramatically in areas hit hardest by the mortgage crisis. For this reason, properties that were once affordable to only a select few are now within the reach of average borrowers.

The only problem with the current housing situation is that it has prompted most lenders to tighten their underwriting guidelines. But if you have a high credit score and unblemished credit record, you will have no difficulties getting approved for a mortgage and buying one of these foreclosure properties.

Putting your home on the market is certainly nerve-wracking especially if you are under time pressure. In most cases, your broker will advise you to hold an open house in order to attract more potential buyers. You will be surprised to know that most buyers will only decide to go to an open house after seeing a photo of your home posted online.

Experiencing mortgage problems is no longer uncommon these days and you should not feel ashamed to seek foreclosure help. But some distressed homeowners make the mistake of working with a foreclosure rescue company that turned out to be a scam.

Investing in foreclosure properties is considered nowadays to be a smart move. In addition to their obviously lower asking prices, the large inventory of foreclosed homes means more choices for buyers. But such favorable market conditions do not only spell opportunity for real estate buyers and investors. There are also unscrupulous individuals who are looking to take advantage of the present buyers market.

Putting up your distressed home for sale is one of the options you can explore to avoid foreclosure. However, you must realize that this task is not as simple as it may seem. For starters, the large inventory of foreclosure homes for sale in the market will certainly make it even more challenging.

The affordability of homes has actually improved in the last couple of years, thanks to the subprime mortgage mess. According to the most recent Housing Opportunity Index, 53.8 percent of newly-built homes sold for the first quarter of this year were affordable to families of median income ($61,500). Compared to 2007, the latest index is up by almost 10 percent.

If you are facing the probability of foreclosure, you should exercise the option of short sales. While distressed home sales are not for the faint hearted, as a seller you have rights even when you are in foreclosure. Many homeowners prefer short sales before their homes are finalized for foreclosure as they can often find buyers who are willing to be flexible in order to have a profitable transaction.

In New York, homeowners having trouble with their mortgages are being assisted by counselors who have volunteered to do this for free. In many cases, these foreclosure counselors find themselves so close to giving up and wondering how difficult it is to work out these foreclosure issues.