Bad Real Estate Market

A Bad Real Estate Market is Good for Real Estate Investors and the Country!

The real estate industry in this country is in for a rude awakening!

The realtors, mortgage brokers, “investors” (really speculators) and Alan Greenspan are whistling past the grave yard, living on borrowed time.

Few people realize how bad the real estate market can become. I remember in the late 70’s when interest rates were above 12%, eventually topping out at over 14% in the 80’s. Prices in many areas fell by 20% or more.

How bad was it? I had a bank in Newport, RI, Give me two houses along with a 115% first mortgage, just to get them off their books. They were choking on their inventory of REO’s (Real Estate Owned), properties they had taken back through foreclosure and could not sell.

The government (read taxpayers!) eventually had to step in a dig out the banks that were buried by bad loans and foreclosed properties brought about by bad government fiscal policy; via the Resolution Trust Corporation, a quasi-government entity.

The fantastic real estate market of today created by bad government fiscal policy; too much easy money; has distorted not only the real estate market but the American economy in general.

Jobs, spending, growth, up to 70% of the GDP, the Gross Domestic Product of the US, were all supported by the reckless, artificial inflation of real estate values. This can’t go on indefinitely and the correction is right around the corner, and it is going to hurt.

The rising inventory of unsold homes, softening, even declining Home Prices, rising interest rates and record mortgage delinquencies, will destroy this bloated, decadent real estate market created by the Federal Reserve Bank over the last 5 or so years.

Billions of dollars of grotesquely overpriced assets will be taken off the books of lenders and out of the hands of those who were foolish enough to think that their gains were real and “re-priced” to reality.

I feel that private investors, as opposed to government agencies, should be key players in taking control of these real estate assets,“ re-pricing” them to provide for the housing needs of regular people on a more realistic, economic basis. In effect, I see the investor as a “re-cycler” of overpriced real estate.

Unfortunately, some innocent people will get hurt in this process. Investors can be of assistance, here too, helping those trapped by their property’s unsustainable financial requirements to escape from their burdens

Let’s take a look at rising interest rates through the Bad=Good prism. After all, it was Mr. Greenspan’s record low interest rates that precipitated the Mega-Boom in real estate and his reversal of that policy, belatedly realizing that it is unsustainable, is bringing it to a screeching halt.

Rising interest rates will also be accompanied by tightened lending rules as bankers slam the doors to the vault shut, long after they have indiscriminately shoveled the money out to anyone with a pulse, of course.

As rates go up and lending rules tighten, fewer people will be able to qualify for bank loans. That means:

· Less demand (mortgage money) for homes, means falling prices
· The return of seller financing; safe, secure private investor loans secured by real estate.
· Payment shock. Many borrowers with exotic adjustable rate mortgages, which can increase monthly payments by 25-100%, will lose their homes, allowing the market to set a more realistic price on them.
· Fewer buyers mean more renters which is good news for investors, who will be able to accommodate them at more reasonable rates.

Falling Home Prices, rising inventory of unsold houses?

· Means downward price pressure on all unsold houses meaning investors will be able to accumulate more properties more reasonably.
· Greater losses to banks that foreclose on properties forcing them to practically give them away, which in a way is their just deserts for their part in creating this mess.
· Homeowners who counted on the growing equity in their homes to allow them to continue living above their means will have to face financial reality.
· More upside down home owners. These people will owe more than their homes are worth. They will have very little reason to keep their homes. They will gladly turn them over to investors.

Rising numbers of foreclosures and bankruptcies? It is ironic that the greedy bankers who rammed the new anti-bankruptcy law through Congress, preventing most middle class families from filing true bankruptcy, will probably lose more on their mortgage loans than they will save on credit card chargeoffs.

Bankrupt debtors who used to be able to wipe out their credit card debt with a Chapter 7 bankruptcy in order to be able to afford to keep their homes, will now be forced to file a Chapter 13 bankruptcy.

This is not really bankruptcy, the debtor pays virtually everything owed, just on a different schedule. Funny thing about those Chapter 13 bankruptcies, history shows that about 70% of the people entering them lost their homes within 18 months!

The result? More foreclosure loses for the banks.

As the Greenspan-created, Frankenstein housing market was the only thing keeping the economy afloat the last 4 years, its demise will probably trigger a recession, which will “reset the clock” on the runaway asset inflation we’ve been subjected to and was the very foundation of this house of cards.

A falling stock market combined with the collapse in consumer spending accompanying such a downturn will produce even more opportunities for astute investors.

The more properties investors can recycle and the more people we can help escape their crushing financial burdens, the more money we will make.

Finally, falling industrial output and the job losses produced by the recession, especially in real estate related fields which had produced over 30% of all new jobs in the past 4 years; will deal the Coup de Grace to the venerable real estate Bubble.

Investors will then have the opportunity to take control of the balance of the over priced properties and help to return sanity to our economy, eliminating the need for the US to borrow $2.6 Billion dollars per day from foreigners!

Looks like the next several years will be the worst of times and the best of times for investors to do what we do best, make lemonade out of lemons!

Copyright, Bill Young, 2005. Bill is a real estate investor and educator. Details on his new program for investors to acquire assets helping people escape their dilemmas and providing housing for them and others at more economic rates in the coming Post-Boom real estate market is available here: http://MotivatedSellersOnline.Com/

Pending Foreclosures

Stop Foreclosure Now

The numbers of filed and pending foreclosures in the United State has risen to staggering numbers. If you're facing foreclosure today, you're not alone. Most of the time, circumstances beyond your control have occurred, and you are left in a financial situation that is less than desirable.

This report will provide you with important information you need to make important decisions about what to do next. We will define terms related to foreclosure, and provide an explanation of each, to enhance your understanding of the foreclosure process. You will also be informed of the various options you have that can prevent your foreclosure from happening, and keep your credit in tact. Finally, we'll talk a little bit about what comes after you've faced foreclosure, and how you can focus on rebuilding your credit.

Let's start with defining some basic terms related to foreclosure.

1. Foreclosure - a legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. The foreclosure procedure brings the rights of all parties to a conclusion and passes the title in the mortgaged property to either the holder of the mortgage or a third party who may purchase the realty at the foreclosure sale, free of all encumbrances affecting the property subsequent to the mortgage.

2. Lis Pendens - this literally means "pending lawsuit." If a foreclosure suit has been filed against you, you have received a lis pendens, or notice of pending lawsuit.

3. Arrears - generally, being overdue in an installment payment.

4. Assignment - the method by which a right or contract is transferred from one person (the assignor) to another (the assignee).

5. Bankruptcy - an action filed in a federal bankruptcy court that allows a creditor to reorganize or discharge credit obligations due to insolvency. A property owner may halt foreclosure action by filing bankruptcy. Bankruptcies remain on a credit record for seven years and can severely limit a person's ability to borrow.

Chapter 7 - "Debtor Wipeout" The court oversees the liquidation of the debtors' non-exempt assets, distributing the cash proceeds proportionally amongst their creditors. Chapter 11 - This is a business reorganization proceeding. Chapter 13 - "Debtor Workout" This is the almost-automatic choice of most trustors seeking to use a bankruptcy filing to delay the in- evitable trustee's sale as long as they can. The purpose of this proceeding is to give a "wage earner" time for rehabilitation . . . a temporary respite free from the collection efforts of creditors. 6. Breach - the breaking or violating of a law, a right, obligation, engagement, or duty, either by commission or omission.

7. Collateral - real estate or personal property which is pledged as security for a debt.

8. Collection - obtain payment or liquidation of a debt or claim, either by personal solicitation or legal proceedings.

9. Complaint - the original or initial pleading by which an action is commenced; a written statement of the essential facts constituting the offense charged.

10. Decree of Foreclosure - a court order to set out the outstanding amount on a delinquent mortgage in order to sell the propA court order to set out the outstanding amount on a delinquent mortgage in order to sell the property to pay the mortgagee.

11. Deed in lieu of foreclosure - a process whereby the owner, with the approval of the lender, deeds the property to the lender to avoid foreclosure. Lenders are generally reluctant to accept a "deed in lieu" unless the title is free and clear of any other encumbrances junior to theirs and the owners execute an estoppel affidavit acknowledging that they are acting volitionally, with informed consent.

12. Default - the failure to make payments in full, on time or at all or to live up to any other obligations placed on the borrower by the loan agreement.

13. Deficiency judgment - a judgment entered in a lawsuit when a property is sold for less than the amount of the loan.

14. Demand Letter - also known as a Breach Letter or Notice of Intent to Foreclose. Notice to the borrower that he/she is in "breach" of the terms of the Note and advising of the right to "cure" the default.

15. Equity Right of Redemption - the right to avoid foreclosure action by paying off the debts, interest, and fees that have accumulated on the property.

16. Involuntary lien - a lien issued against a property without the owners approval.

17. Lender - he from whom a thing or money is borrowed.

18. Loss Mitigation Department - a department which helps homeowners avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan.

19. Notice of Sale - the notice of an impending foreclosure sale required by the state. It recites the legal description of the property being foreclosed upon and gives the time, date and place of the pending sale.

20. Power of Attorney - a written document signed by the owner which authorizes someone else to act in behalf of the owner.

21. Quit Claim Deed - a deed of conveyance that releases any title, interest, or claim, which the grantor may have in the premises.

22. Redemption Period - the time allotted to the mortgagor to reclaim his/her property after it has been sold at an auction. Not all states have a redemption period.

23. Subject To - the transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.

Now, let's turn our focus to your particular situation. Has your financial situation resolved, and you are now able to begin making payments again? Have you experienced a permanent loss of income, but don't want to give up the house? Have you lost income permanently, and know it's best to sell - but don't know how to take the next steps?

As you can see, there are many different issues, and they each depend on your individual situation. Let's take each individual situation, and discuss what the solution would be for you.

We first mentioned your financial situation had resolved itself. This most likely occurs when you experienced a job loss - and are now gainfully employed, once again. It could also be that you were going through a divorce, and now you have been awarded alimony and child support; enough to cover your house payments again. Another scenario is you experienced a death in the family, and perhaps the deceased was the individual who was fully responsible for house payments. At this time, you have received your life insurance benefits, and you can begin making payments or even pay off the house now.

With each of these scenarios, you can begin making payments, once again; however, it may be a stretch for you to come up with the back payments, fees, and additional expenses that were added to your loan. That's where we can help.

We partner with a Loss Mitigation company who can single-handedly negotiate your missed payments, late fees, and additional expenses on your behalf - and make it possible to stop your foreclosure from proceeding further. In many cases, if you tried to accomplish this yourself, you would be given the complete run-around by the banks, mortgage companies, and lenders. Because our Loss Mitigation partner works with lenders across the nation, these financial institutions are grateful to hear from our organization, and eager to iron out the situation, because we represent you. While it is possible for you to attempt to handle negotiating with your financial institution or lender, chances are, they have been trying to collect a payment from you for some time - so there has been a breach of trust. By utilizing Loss Mitigation services through Sterling Property Solutions, you can expect to have your pending foreclosure situation resolved.

Another solution we utilize when your financial situation has improved is to obtain a re-finance. The lenders we work with typically loan money to individuals who have low credit scores. After making your payments on a regular and timely basis, for a reasonable amount of time, you would be able to, again, re-finance with a lender who could provide a more competitive rate of interest.

Now let's move on to the next potential situation. Perhaps you are divorced, or are experiencing a permanent income loss. In many cases, you may have lost a high paying job, and been forced to take something just to put food on the table. Maybe the company you have worked for more than 20 years has just closed it's doors forever. You are still in financial distress, but you aren't ready to give up your home.

In this scenario, Sterling Property Solutions can offer a couple of answers that may work for you. First of all, we offer a lease-back program, in which your property is purchased through our network - and leased back to you for a pre-determined period of time. At any time prior to the end of the designated time period, should your financial situation change, you have the option to re-purchase your property. It seems like of trouble, but it's a very small sacrifice to pay to keep your home. This enables the foreclosure client to get their affairs in order - while maintaining privacy and dignity. In other words, the neighbors and your friends are not going to be discussing the fact that you were foreclosed on and kicked out.

Another option is to get your home re-financed through a hard-money lender. Hard-money lenders offer loans when no other lender will do so. The rate of interest is high, and is generally a temporary fix to your situation. You goal, should you go with a hard-money lender, is to pay on a timely basis for a period of 6 straight months to a year, and then re-finance with a lender who offers more competitive rates and terms.

Sometimes you are facing foreclosure, and the situations is such, that you know it is time to sell your home. Perhaps you are now medically disabled and have experienced permanent income loss. You could have lost a spouse to long-term illness, and you will never be able to replace that missing income.

If this is your situation, we can help. We have a network of individuals and groups of private investors who seek properties like yours. Generally, they can close within 7 business days after you accept the purchase offer. Remember, if you are about to lose your home, wouldn't it be a better scenario to sell the property and move on with your life?

The key to dealing with foreclosure is to access your situation immediately, and accept the fact that you cannot put off dealing with it. So many foreclosure clients come to us 24 hours before their foreclosure is finalized, and it's not always possible for us to save their home or credit at that time. The sooner you can determine whether your financial situation has improved, will get better, or will not get better, will enable you to get the help you need.

Remember, when you need to Stop Foreclosure, go to:

http://www.stop-foreclosure-hotline.com

Now, let's assume you have worked with Sterling Property Solutions, and your foreclosure is a thing of the past. We have thwarted having a foreclosure on your credit file, but there's still a lot of work to do to get your credit back to where it needs to be. Afterall, if you don't have decent credit in today's world, you absolutely pay more for everything.

So how does one accomplish getting their credit score higher. First of all, if you are behind on any bills, especially those that report to the credit bureau, you should bring those up to date ASAP. Order a copy of your credit report and look at all of the unpaid collections and judgements. Contact these creditors, and attempt to make payment arrangements, or even negotiate down the debt. Oftentimes, creditors will accept up to 50% or more of the balance - and mark the file paid in full or settled. When you have a debt that is reported incorrectly, you can dispute that entry, and the credit bureau must verify the debt and contact you within 30 days. If they are unable to verify the disputed debt within the reasonable time period, that debt will be legally removed from your credit report.

The next step to rebuilding your credit is to open one secured Visa or Mastercard account. Many companies offer secured cards, but the trick here is to charge a small amount each month - and pay it off before the due date each month.

All in all, facing foreclosure may seem like the end of the world, but it doesn't have to be. There are options available to homeowners, depending on their individual situation, that can enable them to keep the home, lease-back the home, or sell the home and move on.

Sterling Property Solutions wants to assist you during this situation. To determine the best solution to your particular foreclosure situation NOW, go to http://www.stop-foreclosure-hotline.com, and complete the form on the Stop Foreclosure page of the website. Upon receipt of your information, a consultant will contact you to discuss the matter further.

2006 © Chris Archer Inc. - All rights reserved

Author, Chris Archer has been operating home-based businesses for nearly 15 years, and now donates her time to mentor others. She can be contacted at chris@chrisarcherinc.com. Her website is http://www.chrisarcherinc.com, where entrepreneurs and home-based business owners can subscribe to her newsletter, for weekly advice and innovative ideas that can be incorporated into any business.

2006 © Chris Archer Inc. - All rights reserved

Foreclosure

– What is The Foreclosure Process in California?

The California home-buying process usually involves the use of the deed of trust, which by its legal definition involves three parties; the trustor (borrower), the beneficiary (lender), and the trustee (neutral third party receiving the right to foreclose). The deed of trust usually includes a "power of sale" clause that gives the trustee the legal right to enforce collection of the debt. Collection of the debt is ultimately enforced by beneficiary's right to sell the house when the borrower fails to make their mortgage payments.

Defaulting on one's loan causes the start of foreclosure, the process by which the lender takes over the home in order to recover their principal investment. Once the house is either sold at auction or "repossessed" by the lender, it is sold and the former owner must vacate at the discretion of the new owner. When there is a power of sale clause in the deed of trust the non-judicial process of foreclosure is used.

In a non-judicial foreclosure, the trustee must meet a few requirements before he or she sells the property. In comparison to a judicial foreclosure, Non-judicial foreclosure is quick because the trustee does not have to obtain a court order to foreclose, nor is court supervision required in order to sell the house, as is required in the judicial foreclosure process. The judicial process of foreclosure is used when a power of sale clause is not in the deed of trust.

In California, the timeline of non-judicial foreclosure begins when the trustee files a notice of default. This is a letter which is sent to the owner/trustor notifying him or her of their default of the loan. This notifies the owner of the intent of the lender to follow through on their right to collect on the debt. The copy of the notice, which is recorded at the County Recorders Office of the appropriate county, is mailed to the address of notice as per the deed of trust. Recording of the notice of default can vary greatly depending on the beneficiary.

It can occur anywhere between a week to many months after one misses their first mortgage payment. The step that follows next is the stage of the foreclosure process in which there is a filing of the Notice of Trustee's Sale. No sooner than ninety (90) days after the trustee records the Notice of Default, the Trustee must publish a notice of trustee's sale in the local paper and simultaneously file that notice with the county recorder's office. No sooner than twenty days (20) after the notice of trustee sale is filed, the home may be sold at public auction for the amount of the debt plus foreclosure costs. If no one bids at the auction, the lender assumes ownership of the property, and may dispose of that property to recover their cash investment.

A homeowner should keep in mind that with each succeeding legal action, that these filings are formally recorded and become part of the legal record. Very often these filings can and do have damaging effects to a homeowner’s credit for a period of seven years. The earlier a homeowner can address the situation, the better the overall result will be regardless of the outcome.

Nef Cortez has been a licensed real estate broker and has held various positions in the real estate and mortgage industry for over 25 years. If you would like to read more of Nef's pithy and timely advice (with the latest info on local foreclosures), visit his website at Chino Hills, CA Real Estate or read his blog at Southern California Real Estate Blog

Real Estate Investing Foreclosures

First thing I would suggest regarding foreclosures learn as much as you can on this subject. Foreclosures are considered to be very complex type of real estate investing. Second important thing for the real estate investor is - study the local market. Be sure and follow up to see what the properties sold for and how quickly. You need to be an expert on local property values if you want to be a successful real estate investor, in my opinion.

Where do I find foreclosure or pre-foreclosure deals? The best way is go to the court house and search the Notices of Default/NOD and the Trustee’s Sale/Foreclosure listings. Other things you might consider find an experienced agent that will show you foreclosure listings. They know which web sites offer up to date foreclosure listings. Start interviewing agents to find one that is an experienced investor as well, who has done what you plan to do. When you buy these properties the agent’s commission is paid by the clearing house. The advantage of going to the court house is you have a good chance to make a deal before anybody else knows about it. When it is on the internet, thousands know about it. If the foreclosure sale is an auction in your area, start your bid small and see what happens. Know how far you will go prior to starting the bidding as the biddings go fast. You might want to start the bid at $2,000, watch the bidding, keep bidding when needed, and stop your bidding when it goes over where you are OK at the amount.

Get a foreclosure attorney should you need a help (most likely you will if you are beginner). Another thing you want to take into account is the redemption period (if you are doing business in a redemption state). Some redemption states for example have 6 month right of redemption. Which means the original owner has 6 months to buy back his/her property. It can be even longer if the house was bought in a year when the redemption period was 12 months before they changed the law and made it 6months. Now the new buyer (you in our case) will be stuck with 12 month redemption. Which means you cannot sell during that period.

This in turn can make a huge difference in holding costs for you. To make it clearer, let’s say you bought a house at a foreclosure auction for $60K on the 2nd of January 200X, the amount owed to the bank was $30K which they received after the sale and the owner got his/her check for $30K (minus all expenses in most states the amount above what is owed goes to the owner). The former owner comes on the 29th of May year 200X and he/she can legally buy back the property for $60K (plus all other transaction costs). If the house was in bad shape and you put money to fix it, you might consider it gone as well. The important thing to keep in mind in redemption states is the redemption date and holding costs (buying right is always a rule number one in any real estate deal).

Now let me show you a general pre-foreclosure real life case scenario you most likely will encounter numbers may vary, but the concept is the same. A note holder (private party or a lender) wants out since the owners quit paying their mortgage. The balance on the note is $25,000 and the house is worth about $60,000. (We assume this is a properly executed and recorded first mortgage.) Offer the note holder $17,000 to $19,000 for the mortgage (cash, or paper if the circumstances allow). After you have purchased the mortgage you will have to get them (the original buyers) to deed to you in lieu of a foreclosure by offering them some money (offer them $15,000 or more in our case) to move and deed out or foreclose on them. Don't forget to get TITLE INSURANCE. (To make sure you are not getting into some sort of mess, which could be quite troubling and costly if not noticed on time). Let’s say you paid $19,000 to the bank and $20,000 to the owner that makes $39,000 + $3,000 closing cost (at the most) = $42,000. You got $18,000 in equity. You can either keep it as a rental or sell it and make a nice profit.

Sometimes the owners won’t move out. Here is very well working trick if you foreclose and the occupants (works with tenants too if you hold rentals and have the same issue) do not want to leave. Offer them moving allowance of $1,000 if they move within 10 days, $800 if they move within 14 days, $600 in 20 days. It won’t be long till they leave. The amount varies based on whatever the deal allows. When you find a property way below market never take more than 50% of its market value. Instead share it with the owner. There are some consumer protection laws and you cannot “unjustly” gain because of someone else’s misfortune. Some states (California for example) have tough rules, so if you want to play the foreclosure game, you have to learn and play by the rules. If foreclosures are too complex for you, there are other ways you can make money in Real Estate, but if you happen to come across a good pre-foreclosure or foreclosure deal consult a local attorney who does foreclosures to guide you through the process. If you want to invest in foreclosures learning your state's foreclosure law backwards and forwards is very important.

Here are a couple of links to websites with articles on Real Estate Investing where you can learn different techniques from other investors: http://www.buying-investment-property.info/ and http://www.realestate-investinginfo.com/

One good thing to remember which will save you time, money and efforts try to always work with motivated sellers. Oftentimes the owners in pre-foreclosure are in denial with their situation and need to be brought back to reality. You have to know how and what to talk to them in order to get them sell you the property at your price. You have to motivate them. There are tricks to the trade. Learning is a never ending journey.

Use the right Real Estate Forms when you buy and sell. If you don’t have any forms here is a website you can print forms for free: http://www.realestate-agentsinfo.com/

Good luck!

Copyright © D. S. Peter is a successful real estate investor for over 14 years. This article can be published by anyone as long as the reference box remains intact and all links are kept live.

Real Estate Foreclosure

It's Time to Stop Foreclosure and Refinance

Foreclosure and bankruptcy are two of the most traumatic events you may face in life. This unfortunate situation can change your life if you find yourself behind on payments and unable to get ahead. This article will look at some immediate steps you can take to Stop Foreclosure and refinance your home.

You must first asses your ability to make payments on your loan before you consider the steps that need to be made to Stop Foreclosure and the refinance options available to you. If you are buried in debt then you may not b able to carry the burden of even a lower payment. You must ask yourself if the lower payment is better for your budget than getting in a lower rent situation.

If saving your home from foreclosure is a viable option to consider then you must make contact with the lender who is trying to foreclose on your property. It is likely that they are already in contact with you so this may be easy to do. If you are several months over due you might need to make up a payment or two to negotiate with them to Stop Foreclosure. You can also show proof of your progress to refinance your home and Stop Foreclosure.

The loan company or lender you are dealing with may have private investors that can help you out. Many foreclosure investors are in constant contact with lending institutions seeking loan opportunities for foreclosure properties.

The benefits to you are that you keep your home and hopefully end up with a much lower payment. The main reason for refinancing a foreclosure property would be to save the equity that you have gained. If you have none you may want to reconsider your reasons for saving the home and trying to Stop Foreclosure.

If you need more Goverment Homes then quickly head over to http://foreclosure-help-now.com where you will find helpful Foreclosure Guides, advice and resources including information on foreclosure plans, negotiating and more Stop Foreclosure Refinance.