Foreclosure Overview & Foreclosure Process

Foreclosure Overview & Foreclosure Process What is Foreclosure? Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files a public default notice, called a Notice of Default or Lis Pendens. The foreclosure process can end one of four ways: The borrower/owner reinstates the loan by paying off the default amount during a grace period determined by state law. This grace period is also known as pre-foreclosure. The borrower/owner sells the property to a third party during the pre-foreclosure period. The sale allows the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history. A third party buys the property at a public auction at the end of the pre-foreclosure period. The lender takes ownership of the property, usually with the intent to re-sell it on the open market. The lender can take ownership either through an agreement with the borrower/owner during pre-foreclosure, via a short sale foreclosure or by buying back the property at the public auction. Properties repossessed by the lender are also known as bank-owned or REO properties (Real Estate Owned by the lender). This foreclosure process allows for three opportunities for finding bargains on foreclosure homes. Pre-Foreclosure (NOD, LIS): Buying a property in pre-foreclosure involves approaching the borrower/owner and offering to buy the property outright. The borrower/owner can walk away with something to show for any equity in the property and avoid a bad mark on his or her credit history. The buyer has time to research the title and condition of the property and can realize discounts of 20-40 percent below market value. More about pre-foreclosures Wondering what happens after foreclosure? Then please read on. Remember that understanding foreclosures is the first step for homeowners to stop foreclosure. It is also the first step for investors to buy foreclosure properties. Auction (NTS, NFS): If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction. Buyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction often offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner. More about Foreclosure auctions Bank-owned (REO): If the lender takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender will usually want to re-sell the property to recover the unpaid loan amount. The lender will then typically clear the title and perform needed maintenance and repair; however, the potential bargain for these REO homes is typically less than a pre-foreclosure or auction property. Bank foreclosures can become government foreclosures if the loan is backed by a government agency such as the Department of Housing and Urban Development (HUD) or the Department of Veterans Affairs (VA). In that case the government agency would be responsible for selling the property. More about HUD foreclosures and VA foreclosures Before you buy You’ll need to make sure you’re armed with the foreclosure data you’ll need to find and buy foreclosed homes. You can start by searching free on RealtyTrac’s foreclosure listings database, which includes pre-foreclosure and auction properties across the country and a nationwide bank foreclosures list. Find out more about buying resources Timeline for Foreclosure Additional Information: Foreclosure Laws by State Foreclosure Buying Library Frequently Asked Questions Foreclosure loans and financing FAQ Preventing and Stopping Foreclosure Real Estate & Foreclosure Glossaries Taken from RealtyTrac.com

“Enough with the doom and gloom about homeownership.”

Welcome to Lowcountryrealestate Blog page. This is my first blog on this page.  I would like to start off by asking the question “Who says it’s a good time to buy a house?’  Well more and more of the talking heads out thre aresaying that now is tha time to buy.  You should believe them.  Tak a look at the quote for the headlines of the WSJ 09-16-2010 “Enough with the doom and gloom about homeownership.”
The Following take from KCM

WOW! If that quote was attributed to the National Association of Realtors or the National Association of Home Builders, it would have been quickly dismissed. However, it was the Wall Street Journal that was calling for the end of the ‘doom and gloom’ talk surrounding real estate.

We are finally seeing a powerful backlash to all the recent claims that homeownership should never have been part of the American Dream. It is about time!

We have been posting on the financial advantages and the other non-financial benefits of homeownership for over a year. We must admit that, at times, we felt very lonely. It now seems that we are part of an ever growing army of believers preaching the advantages and opportunities available in today’s real estate market. Who have joined this cause? Let’s name a few.

The Wall Street Journal

In an article last week, 10 Reasons To Buy a Home, Brett Arends reported:

Sure, maybe there’s more pain to come in the housing market. But when Time magazine starts running covers that declare “Owning a home may no longer make economic sense,” it’s time to say: Enough is enough.

He then posted 10 reasons to buy a home today:

1. You can get a good deal.
2. Mortgages are cheap.
3. You can save on taxes.
4. It will be yours.
5. You’ll get a better home.
6. It offers some inflation protection.
7. It’s risk capital.
8. It’s forced savings.
9. There is a lot to choose from.
10. Sooner or later, the market will clear.

The Nation’s Real Estate Pricing Expert

Karl E. Case is a professor emeritus of economics at Wellesley. Professor Case is also co-creator of Standard & Poor’s Case-Shiller House Price Index and is recognized as the one of the foremost authorities on real estate today. In a New York Times op-ed piece earlier this month titled, A Dream House After All, he said:

I have never quite understood what the American dream really means when it comes to housing. For some people, it means having a solid and fairly safe long-term investment that is coupled with the satisfaction of owning the house they live in. That dream is still alive.

Others, however, think the American dream is owning property that appreciates by 30 percent a year, making a house into a vehicle for paying bills. But those kinds of dreams have become nightmares for the millions of foreclosed property owners who have found themselves sliding toward bankruptcy.

But for people with a more realistic version of the American dream, buying a house now can make a lot of sense.

The Wealthy

The only segments of the housing market that are showing sales growth are the price points over $1 million. That market is up 6.1 % in the second quarter of this year vs. the second quarter last year. A recent survey showed that over 30% affluent buyers are planning to either build/buy a new primary residence or a second/vacation home in the next twelve months. It appears the wealthy believe now is the time to buy!

Everybody Else

Fannie Mae just released their National Housing Survey. The survey reported:

• 82% of respondents consider homeownership important to the economy, up two points from January.
• 70% of respondents think it is a good time to buy a house (of which 36% think it is a very good time to buy), up six points from January. This is also four points higher than the 2003 survey – well before home prices peaked – when 66 % said it was a good time.

Bottom Line

Our iconic financial newspaper, our nation’s real estate pricing expert, the wealthiest people in the country and 70% of everyone else think now is the time to buy a home. It probably makes sense to listen to them.