Category: Avoiding Foreclosure

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Avoiding Foreclosure

What You Actually Need To Know About the Number of Foreclosures in Today’s Housing Market

What You Actually Need To Know About the Number of Foreclosures in Today’s Housing Market

While you may have seen recent stories about the volume of foreclosures today, context is important. During the pandemic, many homeowners were able to pause their mortgage payments using the forbearance program. The goal was to help homeowners financially during the uncertainty created by the health crisis.

When the forbearance program began, many experts were concerned it would result in a wave of foreclosures coming to the market, as there was after the housing crash in 2008. Here’s a look at why the number of foreclosures we’re seeing today is nothing like the last time.

1. There Are Fewer Homeowners in Trouble

Today’s data shows that most homeowners are exiting their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The graph below depicts those findings from the Mortgage Bankers Association (MBA):

Loans Upon Exiting Forbearance Program

The same MBA report mentioned above estimates there are approximately 525,000 homeowners who remain in forbearance today. Thankfully, those people still have the chance to work out a suitable repayment plan with the servicing company that represents their lender.

2. Most Homeowners Have Enough Equity To Sell Their Homes

For those who are exiting the forbearance program without a plan in place, many will have enough equity to sell their homes instead of facing foreclosures. Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home.

Marina Walsh, CMB, Vice President of Industry Analysis at MBA, says:

“Given the nation’s limited housing inventory and the variety of home retention and foreclosure alternatives on the table across various loan types, . . . Borrowers have more choices today to either stay in their homes or sell without resorting to a foreclosure.”

3. There Have Been Fewer Foreclosures over the Last Two Years

One of the seldom-reported benefits of the forbearance program was it gave homeowners facing difficulties an extra two years to get their finances in order and work out a plan with their lender. That helped prevent the foreclosures that normally would have come to the market had the new forbearance program not been available.

Even as people leave the forbearance program, there are still fewer foreclosures happening today than before the pandemic. That means, while there are more foreclosures now compared to last year (when foreclosures were paused), the number is still well below what the housing market has seen in a more typical year, like 2017-2019 (see graph below):

413,480 Fewer Foreclosures in Last 2 Years

4. The Current Market Can Easily Absorb New Listings

When the foreclosures in 2008 hit the market, they added to the oversupply of houses that were already for sale. It’s exactly the opposite today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) reveals:

“Total housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). Unsold inventory sits at a 2.0-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021.”

A balanced market would have approximately a six-month supply of inventory. At 2.0 months, today’s housing market is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.

Bottom Line

If you see headlines about the increasing number of foreclosures today, remember context is important. While it’s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years.

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. The author does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. The author will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

 

Categories
Avoiding Foreclosure

What Happens When Homeowners Leave Their Forbearance Plans?

What Happens When Homeowners Leave Their Forbearance Plans?

According to the latest report from Black Knight, Inc., a well-respected provider of data and analytics for mortgage companies, 6.48 million households have entered a forbearance plan as a result of financial concerns brought on by the COVID-19 pandemic. Here’s where these homeowners stand right now:

  • 2,543,000 (39%) are current on their payments and have left the program
  • 625,000 (9%) have paid off their mortgages
  • 434,000 (7%) have negotiated a repayment plan and have left the program
  • 2,254,000 (35%) have extended their original forbearance plan
  • 512,000 (8%) are still in their original forbearance plan
  • 116,000 (2%) have left the program and are still behind on payments

This shows that of the almost 3.72 million homeowners who have left the program, only 116,000 (2%) exited while they were still behind on their payments. There are still 2.77 million borrowers in a forbearance program. No one knows for sure how many of those will become foreclosures. There are, however, three major reasons why most experts believe there will not be a tsunami of foreclosures as we saw during the housing crash over a decade ago:

  1. Almost 30% of borrowers in forbearance are still current on their mortgage payments.
  2. Banks likely don’t want to repeat the mistakes of 2008-2012 when they put large numbers of foreclosures on their books. This time, many will instead negotiate a modification plan with the borrower, which will enable households to maintain ownership of the home.
  3. With the significant equity homeowners have today, many will be able to sell instead of going into foreclosure.

Will there be foreclosures coming to the market? Yes. There are hundreds of thousands of foreclosures in this country each year. People experience economic hardships, and in some cases, are not able to meet their mortgage obligations.

Here’s the breakdown of new foreclosures over the last three years, prior to the pandemic:

  • 2017: 314,220
  • 2018: 279,040
  • 2019: 277,520

Through the first three quarters of 2020 (the latest data available), there were only 114,780 new foreclosures. If 10% of those currently in forbearance go to foreclosure, 275,000 foreclosures would be added to the market in 2021. That would be an average year as the numbers above show.

What happens if the number is more than 10%?

If we do experience a higher foreclosure rate from those in forbearance, most experts believe the current housing market will easily absorb the excess inventory. We entered 2020 with 1,210,000 single-family homes available for purchase. At the time, that was low and problematic. The market was experiencing high buyer demand, and we needed more houses to meet that demand. We’re now entering 2021 with 320,000 fewer homes for sale, while buyer demand remains extremely strong. This means the housing market has the capacity to soak up a lot of inventory.

Bottom Line

There will be more foreclosures entering the market later this year, especially compared to the record-low numbers in 2020. However, the market will be able to handle the increase as buyer demand remains strong.

 

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com

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THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
Categories
Avoiding Foreclosure

5 Steps to Follow When Applying for Forbearance

5 Steps to Follow When Applying for Forbearance

If you’re currently feeling the stress of affording your mortgage payment, or if you know someone who is, there’s still time to get help. For homeowners experiencing financial hardship this year, the CARES Act provides mortgage payment deferral options, creating much-needed relief in these challenging times.

It’s important, however, to understand how forbearance works. It’s not automatic. You need to take action now and apply for the program before these options expire.

A study by the Urban Institute determined:

“Approximately 400,000 homeowners who became delinquent after the pandemic began have forgone forbearance and become delinquent. These borrowers may not know they are eligible for forbearance.”

Thankfully, there’s still time to apply for forbearance, even if you’re just learning about it now. Doing so may be the game-changer you need to stay in your home, just when you need it most. Mike Fratantoni, Senior Vice President and Chief Economist at the Mortgage Bankers Association (MBA), explained:

“The increase in new forbearance requests may be the result of additional outreach to homeowners who had previously not taken advantage of forbearance opportunities.”

If you need to apply for forbearance but aren’t sure how to begin the process, the Consumer Financial Protection Bureau (CFPB) published 5 steps to follow when requesting mortgage forbearance:

1. Find the contact information for your servicer

Look at your mortgage statement to find the phone number for your servicer (the company you send your mortgage payment to every month). The Consumer Financial Protection Bureau encourages you to use the number on your statement to avoid scams.

2. Call your servicer

Explain your situation so your servicer can determine your best course of action. Be sure to ask any questions you have about the process.

3. Ask if you’re eligible for protection under the CARES Act

The CARES Act protects homeowners with federally backed loans (FHA, VA, USDA, Fannie Mae, and Freddie Mac). In addition, some private servicers are also providing forbearance programs.

4. Ask what happens when your forbearance period ends

Depending on the plan available to you, there are different options you may be able to consider. Your servicer will help you get a better understanding of what’s available.

The CFPB also recommends asking questions like:

  • What happens to the payments I miss?
  • What are my repayment options?
  • When will repayment be due?
  • Are there any fees?

5. Ask your servicer to provide the agreement in writing

A written agreement allows you to see exactly what type of program you’re agreeing to. It also helps you make sure it matches what you discuss with your provider over the phone.

Bottom Line

Help is out there for homeowners in need, but it’s important to apply now while this benefit is still available. The Consumer Financial Protection Bureau says: don’t wait, forbearance is not automatic. It must be requested. Reach out to your mortgage provider today so you can get the assistance you need to protect the hard-earned investment you’ve made in your home.

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com

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THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
Categories
Avoiding Foreclosure

Options to Sell Your House Fast When Facing Foreclosure

So, you’re facing foreclosure? One of the best options you have is to sell your house fast when facing foreclosure. We can help with that!

Selling a house can be a daunting process for those inexperienced in the real estate business.

However, this article will help you break down and explain all questions you might have about how to sell your house fast when facing foreclosure.

I’ll teach you how to sell a house to avoid foreclosure, how the owner can sell a house fast when facing foreclosure, how to sell your house before foreclosure and selling your house during foreclosure.

Let’s go.

sell your house fast when facing foreclosure

What is foreclosure?

Foreclosure is a legal process which is undertaken if the homeowner fails to pay his mortgage. If you’re from Orange Seminole Volusia Lake Osceola Counties, have a look at my FL Foreclosure Process article to fully understand the laws and the consequences of the foreclosure process in FL.

The trick most people aren’t aware of is, that you can sell a house fast when facing foreclosure.

Here’s how.

How to sell your house fast when facing foreclosure

There are several options you have when you want to sell a house fast:

  • Sell with an agent at a reduced price
  • Sell to cash home buyers
  • Sell for sale by owner
  • Marketing sale

Sell with an agent at a reduced price

Plenty of websites will tell you how to sell a house with an agent, but not many go into how to sell with an agent at a reduced price. There are a few tricks you can consider when you want to sell your house fast when facing foreclosure.

Trick #1: Lower the commission fees

Realtors usually charge 6% or more on commission. It’s what many accept as a standard fee, however, you are often able to negotiate this fee in half.

Trick #2: Compare agent fees

Don’t go with the first agent you find just because they’re the closest to you – they might be charging fees out of this world. Instead, shop around – find someone who you feel will be willing to lower the fees and still perform an excellent job.

Trick #3: Up the value of your property

Although this might not necessarily lower your agent fees, it will help you balance it all out and keep a steady cash flow.

san Francisco sell your house fast when facing foreclosure

Sell to cash home buyers

Selling your house fast to a cash home buyer is becoming a popular option in the USA and it’s slowly spreading around the world. There are many pros that come with this decision:

  • Your house can be sold in a week – if you sell with PHP Houses, we will aim to sell in just a couple of days if necessary.
  • Sell without making any repairs on the house.
  • Receive a cash offer within 24 hours.
  • Hassle-free sale.

Sell for sale by owner

There are many reasons why someone might not want to go through a realtor to sell their house:

  • It’s expensive.
  • It takes time.
  • It’s a gamble.
  • It depends on the season.

If you’re real estate savvy and an excellent negotiator, you can sell your house fast when facing foreclosure by selling it by yourself. The truth is, you can save more than 7% of the property value if you decide to sell a house by owner.

sell your house fast when facing foreclosure plan

Here’s how you can be your own real estate agent:

  • Put a value on your home.
  • Obtain a flat fee listing on the MLS
  • Research laws in your state.
  • Hold a house viewing.
  • Sell, sell, sell!

Please note that selling your own home is not for everyone – it requires plenty of business skill and some marketing experience.

But don’t you worry – just move on to the next step in this article to find out how to correctly market your property and sell your house fast when facing foreclosure.

Must-do marketing tricks to sell your property FAST

So here’s how you should market your house to sell it fast when facing foreclosure.

  • ‘For sale’ sign on your front yard.
  • List your property on reputable services such as Zillow or any newspaper ads if you’re looking for a local buyer.
  • Start a property auction!
  • Create a website for your property. Use Google Adwords to attract more users.
  • Put your property website in your email signature.
  • Promote your property on Facebook and Facebook real estate / house buying groups.
  • Do a tour of your house on Youtube.
  • Network. Network. Network.
  • Word of mouth – your buyer might be living next door!
  • Use flyers to attract locals.
  • Advertise at your local events.
  • Find property buyers in your area.
  • Email campaign!
  • Open and friendly communication with everyone you come in contact with – be AWESOME!

Marketing tips: Don’t overdo it. Make sure your reputation is positive – sometimes too much marketing can bring bad reputation to your property and it will make it harder for you to sell. The best option is always to start locally – just ask around, you never know what or who you might find in your area. For more information about preventing foreclosure, please read this article.

avoiding to sell your house fast when facing foreclosure

Avoid Foreclosure By Selling Your Orange Seminole Volusia Lake Osceola Counties House Before Auction

Remember: PHP Houses can make you a cash offer to buy the house as-is. Paying cash for houses allows us to close very quickly…in as little as 2 days if absolutely necessary.

Click here to get a cash offer for your house or just give us a call at 407-641-1531. We look forward to talking with you about what options you have.

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com

Let’s Connect:
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THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
Categories
Avoiding Foreclosure

Problems With Using Bankruptcy to Stop Foreclosure in Florida

Many homeowners feel powerless when their bank sends them a Notice of Default and might consider filing bankruptcy to stop foreclosure on their house. Knowing that they’re behind on mortgage payments can force borrowers to seek help in unlikely places.

If government loan modifications and repayment plans are unavailable to help a homeowner stop foreclosure, they can feel like their options are limited while going through a foreclosure.

With the threat of losing their family home and the stress related to major financial hardship, many homeowners will jump at any chance to stop foreclosure, no matter at what cost. Some homeowners might feel like their best option is filing for bankruptcy, but there are a multitude of problems with using bankruptcy to stop foreclosure.

Bankruptcy Misconceptions

problems when using bankruptcy to stop foreclosure

One of the main reasons homeowners choose to file bankruptcy on the cusp of foreclosure is due to the misconceptions associated with bankruptcy. Through misinformation and word-of-mouth exposure, people make assumptions on the bankruptcy process that are simply not true. These common misunderstandings contribute to the problems with using bankruptcy to stop foreclosure.

A likely misconception is that bankruptcy can stop the foreclosure process completely.

This is simply untrue.

Although declaring bankruptcy will buy time during the foreclosure process, it isn’t a permanent solution.

If bankruptcy is filed before the Notice of Sale, homeowners will experience a foreclosure bankruptcy stay. This automatic stay bars lenders from pursuing collective activities on a homeowner’s assets to repay what they already owe and begins as soon as the borrower files.

However, mortgage companies have the right to file a relief from stay.

Their case is especially strong if the borrower has already stopped making mortgage payments.

If the bankruptcy grants the motion, lenders will be able to continue with the foreclosure process. Unless a borrower is able to continue to make mortgage payments, filing for bankruptcy isn’t a reliable method to stopping foreclosure. It temporarily halts the foreclosure process; it doesn’t stop it permanently.

You Still Have to Pay Back the Loan

getting a loan to avoid using bankruptcy to stop foreclosure

Another common misconception is that homeowners who file bankruptcy can keep their residential property without having to pay back their loan.

Most borrowers file for bankruptcy to obtain a discharge, or release, from personal liability for their home loan debt. However, the foreclosure bankruptcy discharge is not guaranteed and is, thus, one of the ample problems with using bankruptcy to stop foreclosure.

The foreclosure bankruptcy discharge differs between chapters. When filing for Chapter 7, for instance, lenders have the option to object during a four-month-long grace period. They can file a motion to dismiss the case for a number of reasons and force borrowers to pay missed mortgage payments while continuing the foreclosure process.

With a Chapter 13 bankruptcy, however, homeowners can see a discharge only after successfully completing a payment plan, which usually lasts between three to five years. Before completing it, homeowners are vulnerable to foreclosure.

Amy Loftsgordon, contributor to a site all about national laws, wants homeowners to remember “that even though the borrower is no longer personally liable for the mortgage debt [with a successful bankruptcy discharge], the lender still has the right to foreclose if the borrower isn’t making mortgage payments.” Don’t count on a foreclosure bankruptcy discharge to save your home.

Foreclosure Bankruptcy Laws

signing paperwork to us bankruptcy to stop foreclosure

Before filing for bankruptcy, knowing your state’s foreclosure bankruptcy laws is necessary. Although there are a few slight variations to the laws throughout the country, the basic regulations apply to most homeowners seeking bankruptcy to disrupt foreclosure proceedings.

The changing bankruptcy laws can be a hassle when deciding to file. Approximately a decade ago, Congress overhauled the national bankruptcy laws, effectively making it harder for many people to file.

They reconfigured Chapters 7 and 13 bankruptcy specifically. Homeowners must pass a stricter means test to qualify for chapter 7 or risk paying back some of their debt in a separate Chapter 13 filing. In addition, the new bankruptcy laws require homeowners to get credit counseling prior to filing a bankruptcy case. These new additions are costly to homeowners in need of a speedy solution to foreclosure.

Before the change in policy, most homeowners were allowed to choose the type of bankruptcy ideally suited for their specific situation. Most decided to file for Chapter 7’s liquidation method over Chapter 13’s repayment plan.

The bankruptcy law initiated in 2005 now prohibits some homeowners with reported higher incomes from utilizing Chapter 7 bankruptcy. If a filer’s current monthly income is greater than the median for a household of equal size in their state, they must pass an additional means test before filing for Chapter 7. This bankruptcy law forces many homeowners to jump through time-consuming hoops before halting their foreclosure. If dealing with a foreclosure deadline, this added step can be costly.

the problem with bankruptcy to stop foreclosure

The foreclosing bankruptcy laws requiring additional credit counseling also contributes to the problems with using bankruptcy to stop foreclosure. Before filing for either Chapter under the new law, homeowners must complete mandated counseling with an agency provided by the United States Trustee’s office.

Although their purpose is to help struggling homeowners, these counseling sessions can hinder certain cases for bankruptcy. If the appointed counselors believe a borrower can meet monthly payments, they’re required to submit their findings to the court. These preliminary findings can be devastating to borrowers that need to stop foreclosure immediately or face eviction.

Before receiving an automatic stay from bankruptcy, filers must trek through many hurdles. These hurdles often impede a homeowner’s desire to keep their home. Although they may seem straightforward and simple, the ever-changing foreclosure bankruptcy laws and increased cost to qualify are some of the main problems with using bankruptcy to stop foreclosure.

Foreclosure Bankruptcy Taxes

doing research on your options when considering filing bankruptcy to stop foreclosure

Another one of the major problems with using bankruptcy to stop foreclosure is the current taxes aligned with selling. Homeowners must be wary of the additional costs to filing bankruptcy, especially if their goal is to ultimately save their home.

A common tax law requires bankruptcy filers to pay tax liability after receiving debt forgiveness. The principal treats any kind of financial forgiveness as a financial benefit, even if it means losing a home through foreclosure.

Homeowners are required to pay additional foreclosure bankruptcy taxes due to the federal government’s regulations, the Cancellation of Debt Income, or as a capital gain from foreclosure. If homeowners are currently struggling to pay their monthly mortgage payments, they’ll likely be unable to pay Uncle Sam, resulting in yet another incurred debt.

If a homeowner’s main focus is keeping their home despite their mortgage lender initiating foreclosure, filing for bankruptcy shouldn’t be a consideration. Filing for bankruptcy is time-consuming, the laws are constantly changing, and foreclosure bankruptcy taxes can be brutal on a homeowner’s wallet. Instead of experiencing the many problems with using bankruptcy to stop foreclosure, homeowners are advised to avoid the bankruptcy misconceptions and explore alternatives when facing foreclosure.

Are You Considering Using Bankruptcy to Stop Foreclosure

If foreclosure is looming for you, you should consider getting a cash offer from a cash home buyer. PHP Houses, Llc has helped dozens of sellers in Orange Seminole Volusia Lake Osceola Counties sell their house before foreclosure. This has allowed them to keep the foreclosure off their credit and receive some of the equity they had in the home instead of losing it all.

If you’d like to find out how much we can offer if you decide to sell your Central Florida house fast, give us a call at (407) 519-0719. We look forward to talking with you about how the process works and what we can do for you.

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com

Let’s Connect:
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Linkedin
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The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.
Categories
Avoiding Foreclosure

I’m Facing Foreclosure What Are My Options?

Homeowners Have Several Options When Facing Foreclosure.

facing foreclosure options

Loan modifications, secondary loans, borrowing from acquaintances, filing for bankruptcy, and selling are all possibilities with varying success rates.

But all foreclosure options aren’t equal. Some common methods used to avoid facing foreclosure can leave the homeowner incurring a larger debt. Other recommended strategies used to stop foreclosure require third-parties to be sympathetic to the foreclosure plight.

If halting foreclosure is a homeowner’s goal, the best foreclosure option might be the least likely.

Modifying Your Loan When Facing Foreclosure

facing foreclosure loan

One of the most common foreclosure options homeowners consider when facing foreclosure is modifying their pre-existing mortgage. This method consists of contacting your mortgage company and requesting one of the many loan modification programs currently out there. While this method is attractive due to its lack of major lifestyle intervention and the ability to keep your home, many homeowners can’t meet the strict modification regulations to keep the foreclosure process at bay.

Typically, loan modifications change the terms initially instituted by a loan agreement between a borrower and a lender.

The lender can change the mortgage payment multiple ways: by lowering the interest rate or late fees, extending the loan term, or reducing the original amount of the agreement. The goal is the same though. Loan modifications are used strategically to lower the monthly payment plan so the homeowner can keep making payments.

It’s an effective solution as long as a borrower is willing and able to continue payments.

There are several loan modification programs to assist homeowners in making those monthly payments. One of the most popular is the new Home Affordable Modification Program, enacted by President Obama. Also known as the Homeowner Affordability and Stability Plan (HASP), it allows homeowners to refinance to reduce monthly payments. This program implements a special Making Home Affordable loan modification that can be applied by lenders for homeowners at risk of facing foreclosure.

HASP, as well as most other loan modification programs, comes with mountains of paperwork and a hefty application process. To begin, a lender will ask the homeowner for a set of documents which will be assessed for general qualification. This will include a hardship affidavit in which the borrower explains the set of circumstances that led them to the inability to pay the current mortgage amount.

It also must include the reasons way the borrower will be able to pay the proposed modified mortgage. These hardship letters can be tricky and time-consuming to write and are not often accepted when considering a home loan modification.

Borrowing Money

money back when facing foreclosure

Other common foreclosure options include borrowing money. Homeowners threatened with facing foreclosure need money fast to keep the creditors satiated. Even with a successful loan modification, borrowers need to pay their monthly payments. Often times, cash-strapped homeowners will seek help from friends and family.

Borrowing a large amount of money from friends and family is a bad idea though, especially when your home can be seized by the bank at any time. Money Crasher’s Casey Slide compiled a list of reasons why a person shouldn’t lend money to family and friends.

However, this list can be used to argue why homeowners should avoid borrowing from their loved ones too. Some of Slide’s complaints included people’s ability to be unreliable, borrowers feeling like a servant to the lender, and ending an important relationship due to a loan agreement gone wrong. At best, receiving a loan from a friend or family member will leave a homeowner indebted; at worst, it can leave them with an eviction notice and a failed relationship. Before borrowing money from loved ones, consider other foreclosure options.

Homeowners also choose to borrow money from other loan-offering entities to offset any arrears accrued by their missed mortgage payments. Attempting to pay off a loan with another loan can be dangerous for a homeowner’s credit and lead to a larger debt. It’s an ill-advised method to avoid facing foreclosure.

Facing Foreclosure & Filing Bankruptcy

facing foreclosure options bankruptcy

Many homeowners in financial distress believe the best foreclosure option is filing for bankruptcy to stop foreclosure.

This is due to the numerous misconceptions associated with bankruptcy relief. These misconceptions allow homeowners to believe several fallacies, including bankruptcy will stop you from facing foreclosure, it’s a simple process to file, and that filers will be able to keep their home without paying what they owe on their mortgage. Unfortunately for homeowners, these blanket statements are simply untrue.

Although declaring bankruptcy will buy time during the foreclosure process, it won’t stop the process completely.

If a homeowner files for bankruptcy during the foreclosure process but before the bank sets an auction date, homeowners will be granted an automatic stay. This motion stops lenders from collecting a homeowner’s assets to repay what they owe on the mortgage.

Although an automatic stay is initiated as soon as the borrower files for foreclosure, lenders have rights to appeal this motion. Mortgage companies may file a relief from stay, especially if the borrower has already stopped making monthly mortgage payments. If the bankruptcy grants the lender’s motion, the mortgage company will be able to continue with the foreclosure process and limit the homeowner’s foreclosure options.

A major hassle when filing for bankruptcy are the laws and restrictions associated with the process. Even though all homeowners are allowed to seek the bankruptcy option, many are unable to file due to recent laws that were passed by Congress.

The new bankruptcy laws require homeowners to receive credit counseling from creditors approved by the United States Trustee’s office before filing a bankruptcy case. If the counselors believe a borrower can meet monthly payments due to any number of factors, they’re required to submit their findings to the bankruptcy court. These preliminary findings can devastate a borrower’s bankruptcy case while forcing homeowners to continually pay for a mortgage they can’t afford.

In addition to mandatory credit counseling, homeowners must pass a stricter means test to qualify for bankruptcy. The newest bankruptcy laws restrict some homeowners with higher incomes from filing for Chapter 7 bankruptcy. Whereas outdated bankruptcy laws allowed homeowners to file for either Chapter 7 or Chapter 13 without restraint, the new regulations require homeowners to pass a means test if a filer’s current monthly income is greater than the median for a household of equal size in their state. This addendum to the already tedious bankruptcy laws are costly to homeowners in need of speedier foreclosure options.

Whether it’s a Chapter 7 liquidation of all debts or a Chapter 13 repayment plan, filing for bankruptcy is not a permanent solution to avoid facing foreclosure. Homeowners are not guaranteed to keep their home while risking seven years of poor credit. For borrowers that need to stop foreclosure immediately, this is not the best foreclosure option.

Selling Your Home Fast

house for sale when facing foreclosure

One of the best options a homeowner has when facing foreclosure is selling their home before an auction. This allows the homeowner to pay off their mortgage and other secondary loans associated with the house, while pocketing any extra profit made from the sale. If the threat of foreclosure is imminent, selling your home as quickly as possible is the best way to avoid facing foreclosure. When a homeowner sells their property, they avoid the credit-destroying experience of foreclosure while able to pay off any lingering debts that caused their initial financial hardship. Consider a cash home buyer to sell immediately, if you’ve already received your Notice of Default. Selling before the lender regains ownership saves the homeowner time and money.

Foreclosure help comes in various shapes and sizes. While asking for help from your mortgage lender or family can be successful, homeowners are often put in precarious financial situations worsening their debt. Filing for foreclosure may also help some borrowers in need, but the heavy restrictions and general misconceptions make it an unreliable option. One of the best options when facing foreclosure is selling your home before auction and paying off your mortgage. Selling a foreclosed home can be simple and lucrative if sold to the right buyer. Weigh your options before attempting to stop foreclosure.

Get a Cash Offer if You’re Facing Foreclosure

We buy houses in Florida and can close very fast. This gives you an option if you are facing foreclosure. We are able to buy the house completely as-is so that you don’t have to make repairs or wait for them to be made.

You won’t have to wait for a qualified buyer to come along because we are the buyer!

We make cash offers within 24 hours and there is no-obligation or fee for us to do so. If you like the offer, we move forward. If you don’t, we won’t. Simple as that.

Give us a call at 407-519-0719 to see what can pay for your house today.

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com

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The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.
Categories
Avoiding Foreclosure

Where Can I Get Foreclosure Help in Orange Seminole Volusia Lake Osceola Counties, FL

Homeowners can have a tough time trying to avoid foreclosure. Late fees, exorbitant monthly payments, and other bills can make affording your current home a nightmare. Tackle on unexpected financial hardships and you’ll almost certainly experience the foreclosure process. But homeowners aren’t alone when needing foreclosure help in Orange Seminole Volusia Lake Osceola Counties, FL. There are many programs and methods to avoid foreclosure when trying to save your home.

Government Foreclosure Help

foreclosure help money back

There are several places to find foreclosure help in Orange Seminole Volusia Lake Osceola Counties, FL. Seeking foreclosure help from the government is one of the most common methods. Before contacting your lender about general loan modification, familiarizing yourself with the current initiatives enacted by the federal government can give homeowners the much-needed edge to avoid foreclosure.

One of the most common programs used by homeowners in foreclosure trouble is the Home Affordable Modification Program (HAMP).

Specifically, HAMP is used to lower a borrower’s monthly mortgage payments to make them both affordable and sustainable. The program achieves this by adjusting interest rates, extending payment terms, and reducing – or even forbearing – the loan’s principal for qualified homeowners. HAMP boasts that homeowners save approximately $500 per month on average. Half a grand can be home-saving for homeowners seeking foreclosure help.

Another loan modification plan went into effect 2013 to help homeowners avoid foreclosure. Created by Federal Housing and Finance Administration (FHFA), the Streamlined Modification Initiative (SMI) is similar to HAMP by offering homeowners the opportunity to redefine their mortgage payment plan.

Unlike HAMP, however, SMI allows borrowers to qualify for mortgage relief without gathering mountains of paperwork and applying. The mortgage company must mandatorily offer SMI after a borrower misses payment deadlines before initiating foreclosure, typically between 3 and 24 months.

Before SMI modifies the loan permanently, eligible borrowers will be required to make 3 on-time trial payments. The exact terms for those trial payments will differ among homeowners, but will be based on a fixed interest rate and sent through a letter in the mail. Once the trial is completed successfully, the loan changes are permanent. The SMI may also require principal forbearance and extended payment terms for some underwater borrowers.
court foreclosure help. the problems that can come up with foreclosing

“This new option gives delinquent borrowers another path to avoid foreclosure.” FHFA acting director Edward DeMarco said in a press release when SMI was initially proposed. “We will still encourage such borrowers to provide documentation to support other modification options that would likely result in additional borrower savings.”

SMI was enacted to minimize losses and help financially troubled homeowners avoid foreclosure. The program specifically targets government-sponsored agencies Fannie Mae and Freddie Mac, two of the leading insurers in the nation. Currently, the program works in tangent with a new government initiative enacted this year called the Principal Reduction Modification Program (PRMP).

PRMP is a one-time program for underwater borrowers that need assistance meeting monthly mortgage payments. This new program builds on the pre-existing SMI. If the homeowners can meet the lower payments and accept the lender’s final modification, the principal forbearance amount instituted by SMI will be forgiven. This means that homeowners who qualify for a PRMP will not have to pay back portions of their loans ever. It’s a greatly limited program for borrowers that need foreclosure help in San Antonio, TX.

If homeowners can’t qualify for any of the multitudes of loan modification programs or seek general consultation, the U.S. Department of Housing and Urban Development (HUD) offers free housing counseling services. By contacting an HUD-approved foreclosure avoidance counselor, homeowners can receive information and assistance necessary to avoid foreclosure. This option can be found conveniently on HUD’s website and is no-cost foreclosure help from the government.

Foreclosure Help for Veterans

veterans dealing with foreclosure help

Seeking foreclosure help in Orange Seminole Volusia Lake Osceola Counties, FL can be especially easy for veterans. In addition to the government programs offered above, veterans can seek help from the U.S. Department of Veterans Affairs (VA). VA not only offers ample benefits, news, and careers for active and retired servicemen and women, it provides a plethora of resources designed to keep veterans in their homes.

One of VA’s more helpful resources is the Home Loan Guaranty Service (HLGS). This program offers the assistance of more than 150 trained loan technicians situated throughout the country.

Much like HUD’s housing counselors, the service helps veterans understand how to retain their homes and avoid foreclosure with knowledge and assistance. They have some of the lowest rates in the industry while specifically targeting veterans that need government foreclosure help. Impressively, HLGS has helped nearly 300,000 veterans who were delinquent in their mortgage find a solution to avoid foreclosure.

Many veterans struggling to make monthly mortgage payments find relief in a VA streamline refinance loan. They’re similar to SMI but are restricted to homeowners that are also veterans.  Officially known as an Interest Rate Reduction Refinance Loan (IRRRL), an IRRRL is a VA-guaranteed loan that lowers your interest rate. Consequently, it decreases the monthly principal and interest payments and offers veterans a better chance at making payments. Veterans are eligible for these refinance loans if their home loan is one of the special VA-guaranteed loans.

Receiving an IRRRL does not require an appraisal, credit information, or underwriting. This allows veterans to apply without restrictions, saving precious time and money during the high-stress situation of a foreclosure. Veterans are allowed to use an IRRRL to refinance an underwater home though. (Remember, being underwater means owing more to your lender than your home is worth.) The basis for an IRRRL is the existing VA loan that cannot be paid, instead of the current market value of your home. Therefore, veterans can receive a greater refinance to pay off any financial hardships keeping them from making those mortgage payments.

Foreclosure Help to Save Your Home

getting foreclosure help

If the loan modification process seems too time-consuming or a homeowner isn’t eligible for the government foreclosure help, there is yet another option. Many homeowners at risk for foreclosure seek foreclosure help by contacting a company that buys houses directly. This option is not only less stressful, it’s also extremely effective when trying to avoid foreclosure.

Many homeowners assume that house buyers are solely interested in buying properties.

However, many house buying investment companies would rather offer free foreclosure help to homeowners in need than make a sale.

House buying companies know the emotional and financial stress caused by foreclosing and all sympathetic to those experiencing financial issues. They’re also unbiased; unlike your lender, house buyers have no financial stake in your loan defaulting. Before making a call to your mortgage lender, contact a house buying company to see what your options are from an unbiased point of view. Unsolicited and sympathetic foreclosure help in Orange Seminole Volusia Lake Osceola Counties, FL is always the best option.

PHP Houses is one such house buying company in Orange Seminole Volusia Lake Osceola Counties. Give us a call at 407-641-1531 so we can help you with options to avoid foreclosure.

Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com

Let’s Connect:
Facebook
Linkedin
Twitter
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The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.
Categories
Avoiding Foreclosure

How to Stop Foreclosure in FL

Foreclosure is a scary process for most homeowners. When you acquire a mortgage, there’s a constant threat of foreclosure looming over your head. Knowing how to stop foreclosure from happening before it becomes a problem is an important thing for homeowners to understand. Whether the continual payments are too high or a homeowner finds himself experiencing financial hardship, having your home seized by the courts is a real possibility. But even after missing a few months of payments and receiving a Notice of Default, losing your home doesn’t have to be inevitable. With a general knowledge of the foreclosure process and determination to keep your home, you can learn how to stop foreclosure in FL. We’ll show you how so that you can be prepared should you ever need to avoid a foreclosure. how to stop foreclosure from happening

Communicate with Your Lender

Although homeowners have several strategies to choose from when deciding how to stop foreclosure process, some everyday advice can be implemented to slow the foreclosure’s acceleration. Before making major life-altering decisions, consider some of these general tips when contacting your lender. One of the easiest ways how to stop foreclosure in FL is by communicating with the mortgage company. If a homeowner cannot meet the required monthly payments, changing the amount owed each month will ease a borrower’s financial burden. Asking for a loan modification is one possible permanent solution. Loan modifications typically allow homeowners to make lower payments at higher interest rates or over an extended loan period. If a borrower is on the cusp of foreclosure due to several missed payments, they can ask their lender about reinstatement. Also known as a temporary indulgence, a reinstatement allows homeowners to bring their loan current and proceed with their mortgage as before. However, a borrower must be able to afford to make the missed payments in addition to late fees and interest rates. Reinstatement might not be a viable option for homeowners with lasting financial issues. Mortgage companies can also offer other plans to assist homeowners when asked. Repayment plans, for instance, allow borrowers to repay missed payments by making slightly increased monthly payments. These plans allow you to catch up while stopping foreclosure. All a homeowner needs to do is communicate with their lender and ask about current options to relieve loan debt. More times than not, a quick call to a sympathetic lender can be home-saving.

Seek Help

getting help on how to stop foreclosure Seeking the help of third-parties is another way how to stop foreclosure in FL. Although homeowners have several options when stopping foreclosure, sometimes the process is too much for a single person. Enlisting the expertise of professionals will lessen your stress while providing a multitude of options for keeping your home. One option available to borrowers is contacting a foreclosure avoidance counselor. The U.S. Department of Housing and Urban Development (HUD) offers free housing counseling services to give homeowners the information and assistance necessary to avoid foreclosure. They’re offered in every state and can be found conveniently on HUD’s website. Homeowners can also seek out help from the new Home Affordable Modification Program. Enacted by President Obama, the Homeowner Affordability and Stability Plan (HASP) allows homeowners to refinance to reduce monthly payments while implementing a special Making Home Affordable loan modification that can be applied by lenders. “If your mortgage payment is more than 31 percent of your monthly income, for instance, the new program offers financial incentives to lenders to lower the monthly payments,” adds Fraser Sherman, prominent finance journalist. Borrowers can also seek help from the courts. The expertise applied when hiring an attorney can be helpful when wanting to know how to stop foreclosure immediately. Not every foreclosure process warrants legal intervention; nonjudicial foreclosures skip the courts altogether. If a homeowner feels like their foreclosure is unjust due to lender errors, unfair terms, or failure to follow legal procedures, they may have a viable lawsuit. These substantive defenses are considered the best legal way to stop the foreclosure process.

The Bankruptcy Option

using bankruptcy to stop foreclosure Many homeowners find themselves at risk for foreclosure after accruing a large amount of debt. They might think filing for bankruptcy is the simplest solution to escape their financial troubles. In some instances and with enormous debts, that can be true. However, if a homeowner isn’t keen on a lengthy litigation process and wants to halt the foreclosure process immediately, filing for bankruptcy might not be the best strategy for how to stop foreclosure in FL. Once an individual files the petition for bankruptcy, federal law prohibits debt collectors from seizing assets to pay off what’s owed. Since foreclosure is considered a collection activity, mortgage lenders must halt the foreclosure process. Once in court though, the bankruptcy trustee’s role is to play mediator between the filer and creditors, not absolve debt. Going through the courts will buy borrowers time to make past mortgage payments, but it won’t stop the foreclosure process completely. Filing for bankruptcy also has longer lasting consequences. Depending upon which chapter of bankruptcy you file under, the filing will remain on an individual’s credit report for up to ten years. During that period, it can prevent a homeowner from obtaining future lines of credit or borrowing from another lender. If a homeowner forecloses after filing, they’ll be unable to take out another loan and may be forced to live in an undesirable location until they can. Unless the consequences of bankruptcy are manageable to a homeowner, it’s not the best option when deciding how to stop home foreclosure proceedings. Just be careful that you don’t end up paying attorneys the money you could have used to pay arrears and get out of foreclosure. Yikes!

How to Stop Foreclosure and Save Your Home

houses without foreclosure Although homeowners have several methods available to saving their property from repossession, some options are better than others. Selling your property to a cash home buyer before the lender takes it to auction might be the best way how to stop foreclosure in FL. Homeowners have the option to sell to a cash home buyer, even after a lender begins the foreclosure process. After defaulting but before the Notice of Sale, mortgage companies must consider selling if a borrower gets an offer from a buyer. Many lenders prefer this to other options because it saves them time, effort, and trouble when looking for home buyers at auction. Selling to a cash house buyer is the best method to saving your home because it allows homeowners to keep whatever profit they make after paying back the lender. When homeowners sell, they gain standing in an otherwise powerless situation. Foreclosure is a scary threat on your credit that could possibly leave you homeless. By selling to a cash house buyer, homeowners gain the advantage of making their own decisions, acquiring money to use on their next property, and forego the foreclosure process completely. It’s the best option when needing to know how to stop foreclosure in FL.

Get a No-Obligation Cash Offer Within 24 Hours

See, learning how to stop foreclosure isn’t as bad as you thought. If you’d like to see how much you could get for your house from a buyer that can close it fast, give us a call at 407-641-1531. We buy houses in Orange Seminole Volusia Lake Osceola Counties and can close within 2 days if absolutely necessary. We pay fair prices, but if our offer is not acceptable, you have absolutely no obligation to take it. It has to work for both parties and we only move forward if everyone is happy. Give us a call and find out what we can pay you for your house! Contact us: PHP Houses 142 W Lakeview Ave Unit 1030 Lake Mary, FL 32746 Ph: (407) 519-0719 Fax: (407) 205-1951 email: info@phphouses.com

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The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.
Categories
Avoiding Foreclosure

The FL Foreclosure Process

Most homeowners need to borrow money from the bank before buying a property. It’s often a necessary but unwanted acquisition due to lenders’ perplexing contracts, extensive regulations, and steep interest rates. But what happens when you cannot meet those monthly mortgage payments? You’ll probably unwillingly experience the dreaded FL foreclosure process, and will be looking for help.

Homeowners dread the F-word, and for good reason. Foreclosures can leave you homeless while ruining your credit. Although lenders are required to inform you about the many consequences resulting from a defaulted loan, the FL foreclosure process can seem sudden and life-altering. But how do foreclosures work? With knowledge and a little effort, you can effectively meet your state and lender’s guidelines to avoid foreclosure completely.

How Does Foreclosure Work

the foreclosure process and what you need to know

Although state laws and lender regulations can differ, the steps of a foreclosure remain relatively similar. The foreclosure process timeline typically begins when a property owner cannot make principal or interest payments on their loan. If the loan borrower cannot assume payments or foregoes communication with the lender, steps will be taken to ultimately foreclose on the home. If a homeowner cannot pay their mortgage, the property being paid for with the loan will be seized and sold.

The foreclosure process timeline initiates when a homeowner misses their first monthly mortgage payment. You won’t be penalized immediately; most lenders allow at least a week to make the missed payment without charging late fees. If a borrower cannot meet the payments, late fees, and interest after three to six months, the mortgage company will order a Notice of Default (NOD). The NOD provides information on the total amount owed and how much time an owner has to pay and is delivered by either a trustee or sheriff.

All foreclosures also include a Notice of Sale (NOS). The NOS is another physical document that is given to homeowners and posted on a property, usually within three months of the NOD. It identifies the date and time of the foreclosure sale where the property is publicly auctioned off to the highest cash bidder. Once a borrower receives a NOS, little can be done to salvage their foreclosed property.

The Types of Foreclosure

foreclosing on a house

Even though the foreclosure process timeline is generally the same, there are different types of foreclosures allowed. Knowing their dissimilarities can help a homeowner resolve each with ease. According to the U.S. Department Housing and Urban Development, there are three different types of foreclosures: judicial, statutory, and strict. Their differences are minor but include court involvement, how notices are delivered, and the general outcome of the FL foreclosure process.

A foreclosure is designated judicial when the process involves the courts. All states allow a judicial foreclosure, so knowing its procedure is vital. After the three to six months of missed payments, the lender files a lis pendens – “lawsuit pending” – with an attorney. This type of foreclosure involves the judicial system to provide evidence of a default while getting the court’s approval to initiate a NOS. If the borrower doesn’t respond to the NOD within 30 days of the filed suit, the courts will sell the mortgaged property at auction.

The process is a tad different with a statutory foreclosure. A statutory foreclosure is also known as the power of sale due to a common clause found in many deeds of trust. The clause allows the trustee to skip the court’s approval and sell the mortgaged property themselves, enabling a cheaper foreclosure process. If the homeowner dismisses the NOD or cannot pay within the waiting period, the mortgage company sells a home at auction. These non-judicial foreclosure auctions are typically more expedient than the court’s.

A strict foreclosure contains the simplest foreclosure process timeline, but only a small amount of states allow it. The lender will file a lawsuit directly once the homeowner defaults. If the balance is continually unpaid, the court will give the mortgaged property back to the mortgage holder, effectively skipping a home auction. The seized home is now deemed Real Estate Owned (REO) and is independently sold by the lender. A strict foreclosure usually only occurs when the borrower’s debt amount is greater than the property value.

Foreclosure Consequences

foreclosed home

The FL foreclosure process is time-consuming, complicated, and costly. It also comes with great consequences to the homeowner that defaults on their property.

Although foreclosures wipe out some debt, some stick with the homeowner even after relinquishing the property. The original mortgage obtained at the home’s purchase and some debt from a second mortgage can be paid after the home is sold. However, property owners are still required to pay second mortgages back to the lender if they’re not paid off in full after a foreclosure sale. When homes depreciate or there’s a significant drop in the real estate market, the foreclosure will be sold for less than what is owed. A court could decide to enter a deficiency judgment against the homeowner. The judgment holds the owner accountable for paying the difference and allows the lender to seize any other assets the property owner may have.

Another major consequence deals with the borrower’s credit. Mortgage foreclosure is considered almost as damaging as filing for bankruptcy to most tax experts. A foreclosure, no matter the type, will remain on the credit report for seven years. This seriously limits a homeowner’s ability to borrow in the future and may have a significant impact on your credit score.

How to Stop a Foreclosure

using bankruptcy to avoid foreclosure can lead to problems

There are several stages within the FL foreclosure process in which to bring your loan current and halt the bank from seizing your home.

The easiest way to stop a foreclosure is to catch up on the missed mortgage payments. Sometimes there are extenuating circumstances keeping a homeowner from repaying. But if you can afford it, pay them off; you’ll avoid a foreclosure on your credit and be able to continue living at your current residence.

Another way to exit the foreclosure process is by getting a loan modification to lower payments. A borrower can achieve this by either requesting their loan to be paid over a longer period or at increased interest rates. Many lenders are willing to work with homeowners to make reasonable payment options.

Homeowners can also avoid foreclosures altogether. Lenders are willing to work with cooperative borrowers, so communicate. If a mortgage company sends a NOD, don’t ignore it! Responding to the notice and staying in contact with the lender will slow the foreclosure process.

You can also prevent foreclosures by knowing how much you owe each month and save accordingly. Although this is an obvious step, many homeowners will prioritize other expenses over paying their monthly mortgage. Create a budget and save the payment due date in your calendar. Responsible homeowners keep up with what they owe.

The threat of a foreclosure can be scary to a homeowner with an existing mortgage. But knowing how foreclosures work will help you avoid the consequences of a defaulted loan. By utilizing these preventative measures, you’ll be able to skip a financially debilitating foreclosure completely, and continue to live in your dream house!

An Option to Avoid the Foreclosure Process

doing your reasearch

If you are facing foreclosure and have run out of options, you might consider getting a cash offer from a home buyer. PHP Houses pays cash for houses so that you can sell before and close before the foreclosure. This usually allows you to keep the foreclosure off your credit and keep some of your equity.

Give us a call at 407-641-1531 to learn more about how we can help you avoid foreclosure in Orange Seminole Volusia Lake Osceola Counties.

The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.