Questions and answers about foreclosures
The foreclosure crisis has been compared to the great recession by many and the number of homeowners facing foreclosure has hit the highest levels in history, but what to do if you are facing foreclosure or if you are willing to invest?
ForeclosureDatabank.com has compiled a list of questions and answers that might help people facing foreclosure, experiencing financial problems or willing to invest in the market.
Q. After the homeowner is served with a Notice of Default what are the options?
A. The homeowner makes restitution on any and all outstanding monies owed to the lender. Each state has governing laws which provide a grace period to the homeowner to allow additional time to fulfill financial obligations. This time period is referred to as pre-foreclosure.
1. The homeowner places his property on the sale market. Upon sale and closing, the seller then is able to pay the remaining balance of the mortgage, including all principal and fees. This is a solution in the best interest of the homeowner as it will least adversely affect his credit history.
2. The property in question is sold at a pre-foreclosure public auction.
3. The lender evicts the homeowner and is then responsible for the recovery of monies owed on the property. The lender then places the property on the market using conventional sales techniques, traditional auctions, online auctions and foreclosure listings. This property is now referred to as REO meaning real estate owned by a lender.
Q. will you be able to get your personal belongings out of the house once the home goes into foreclosure?
A. Yes, when a home goes into foreclosure, the lender gets the house as a non payment for the mortgage. Lenders do not have any rights on your personal belongings. So people facing foreclosure should contact the lender before the house gets into foreclosure to get a timesheet of the process, so you can take your belongings out of the house and not be caught by surprise.
Q. With all the problems caused by the real estate crisis, Is it a good time to buy a home?
A. Sure, many believe that this is the best time ever to invest in a property. Donald Trump has recently expressed his opinion about it, and who else for a better advice than Donald Trump?
Q. You have not yet defaulted on any mortgage payments, but you know for sure that you won’t be able to pay anymore, what should you do?
A. If you just want to buy some time to be able to keep paying your mortgage, you should contact your bank loss mitigation department or access NFCC.org or phone 888-995-HOPE to try to re-arrange your mortgage, with maybe some more soft payments. But if you really have no way to keep paying your mortgage you should consider short selling your home.
Q. When does the foreclosure process legally commence?
A. The process of foreclosure commences when the Notice of Default is a matter of public record. The lender will have given a period of notice to the property owner of his intent prior to filing. Most commonly mortgage payments will have fallen 2 to 3 months in arrears. Note that the NOD must be recorded in the county in which the property in question is to be found.
Q. Is there a difference between REO and bank foreclosures?
A. A bank foreclosure is also known as a Bank Repo and a REO, or Real Estate owned by the lender, in this case the bank. REO is the description of any real estate reverting back to the lender following an unsuccessful trustee sale or foreclosure auction.
