Foreclosures article: Foreclosure: Go it Alone or Get Assistance

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Foreclosure can be a difficult situation, no matter how you handle it. It can happen to any homeowner. How they handle the situation will determine their chances of keeping their home or losing it.

Some homeowners are determined to go it alone. These indomitable individuals refuse to accept help no matter how dire their situation is. Others solicit the help of Foreclosure Counselors, Mortgage Professionals, and Real Estate Investors to navigate the choppy waters of the foreclosure process. Let’s take a look at these services and how they can help.

Foreclosure Counselors: There are several names for Foreclosure Counselors. Such professionals are also known as Loss Mitigators, Forbearance Counselors, and Foreclosure Protection Mediators. Regardless of their name, their intent is usually the same. Their sole purpose is to help you avoid foreclosure. Typical services include:

•Budget analysis to determine the borrower’s ability to stay in their home.

•Educating the borrower as to the time frame of the foreclosure process

•Hiring an attorney to defend their case against the mortgage company.

•Slowing down the foreclosure process to give the borrower time to save money and make wise decisions.

•Mediation between the borrower and the mortgage company.

•Negotiating with the mortgage company to achieve a win/win for both the borrower and the mortgage company.

When hiring these individuals, always check their credentials. Some questions you can ask are:

•What professional organizations do you belong to?

•Are they a member of the Better Business Bureau?

•What their rating is with the Better Business Bureau? Any claims?

When looking for a company to work with, it’s best to find a company that is local or within your same state. Since foreclosure law differs greatly depending on the state you live in, you want to hire a company who is familiar with the laws in your area.

Mortgage Professionals: Mortgage Professionals are also known as Mortgage Brokers, Loan Officers, and Lending Institutions. Your traditional Lending Institution does not lend to individuals who are going into foreclosure. However, there are Mortgage Professionals who specialize in sub prime mortgages and lend to financially challenged homeowners in an effort to save the homeowner’s home. Their goal is to save your home by refinancing your loan.

If you are refinancing your loan to avoid foreclosure, be aware that you will be charged much higher rates than your traditional lending institution. Since there is a much greater risk that the borrower may default on the loan, the bank needs to offset this risk. This “offsetting” is accomplished by charging higher interest rates and points. Also, be aware that most lending institutions will not move forward with a refinance unless there is significant equity in your home. This is another way for the bank to mitigate riskier loans. Shop around for the best rates. But most importantly, make sure the lender can perform under the time constraints of the foreclosure process.

Real Estate Investors: Real Estate Investors can save your home by purchasing the house prior to it going to auction. Their goal is to purchase your home in an effort to avoid foreclosure. These Real Estate Professionals often find creative, non-traditional solutions to otherwise hopeless situations. Some typical solutions include:

•Purchasing the house outright with cash.

•Re-instating the loan and then purchasing the house via a real estate contract (REC) or other “loan wrapping” techniques.

•Purchasing the house via a short sale.

•Re-instating the loan and then leasing the house back to the owner with an option to buy the home back in the future.

Depending on the homeowner’s equity in the house, the real estate investor may or may not be able to give the seller cash at closing. However, the seller will be able to avoid foreclosure in most situations. This then secures a better credit score for the borrower in the future.

There are many reputable Real Estate Investors who are able to help you avoid foreclosure. Likewise, there are many unethical Real Estate Investors who don’t operate under principled business standards. When working with a Real Estate Investor, protect yourself by asking them the following:

•Names and phone numbers of past sellers they’ve worked with (references).

•Call and confirm these references to see if the Real Estate Investor performed to their liking.

•Is the Real Estate Investor a member of the local Better Business Bureau?

•Are there any other organizations that can attest to the Real Estate Investor’s character or ability to perform in a principled manner?

Foreclosure can be a difficult and confusing process even for the seasoned homeowner. Nevertheless, there are many resources available to help the borrower avoid the perils of having a foreclosure on your credit. The most important point to saving or selling your home before foreclosure is to take action. Time can be your biggest asset or your worst enemy. Bottom line, while time is on your side, you are in control!

Justin McKinney has been in the Real Estate business for multiple years. Through training seminars and handleing a multitude of clients with different situations, he has become very educated on the Foreclosure process and other Real Estate matters. Visit us at http://www.rescuemycasa.com