How to Buy Foreclosure Real Estate
The ugly threat of foreclosure is an unfortunate possibility to many homeowners. Unavoidable financial problems can affect a homeowner's ability to make the mortgage payments such as divorce, losing a job, death in the family or expensive medical bills thus resulting in the lender seeking legal action to repossess your home via foreclosure.
Many people do not realize that if your home is foreclosed on, not only do you lose your home, but you still may have to pay the bank an additional amount. In many cases, the home is worth less than the amount owed to the lender. When this occurs, you will owe and the lender will most certainly pursue a deficiency judgment, which is the difference between the amount owed to the lender and how much the bank sold the home for.
For example, if your house is sold during foreclosure for $179,000 and your loan balance with the lending company is $239,000, a deficiency judgment of $50,000 is still owed to the lender.
The best thing you can do if you find yourself getting into financial problems is to get a your finances under control before you get a notice of foreclosure. It is never too late to reduce spending and get on a budget.
Here are some ways to repair your finances:
If you receive a Notice of Foreclosure, immediately contact your bank and speak with someone in their Loss Mitigation Department. Explain your situation to them and be upfront about the financial problems you are having. If you are meeting with them in person, you may want to bring backup with you. For example, copies of high medical bills and collector's notices will show them the pressure you were up against because of a health emergency.
Contact an approved HUD government housing counseling agency in your state. It will provide free information and a list of organizations ready to bail you out when threatened with foreclosure.
In recent times, many Americans are facing foreclosure. Unfortunately, there are a number of fraudulent foreclosure-related companies ready to take advantage of these homeowners at this vulnerable time.
These fraudulent companies may call themselves "foreclosure consultants" or "foreclosure specialists." If a company claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a real estate professional, HUD-approved housing counselor.
These scammers will find you as soon as the Foreclosure procedure starts. When your lender files your foreclosure notice with the public trustee in your town, an announcement is made in your local newspaper. Soon, you will begin to receive phone calls and mail from foreclosure scam artists.
There are several scams they use to try to swindle you:
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender. Find a HUD-approved housing counselor near you or call (800) 569-4287 or (800) 877-8339.