Foreclosures Help Information

Archive for the ‘Foreclosed Homes’ Category

Mo Foreclosed Homes

Question: Should I let my home foreclose even though I can still afford it?

So here's our situation. We purchased our "starter" home 2 years ago for $170k. We can afford it ($1450/mo) but our home is now worth about $90k. We're thinking about just walking away, not because we can't afford it, but because the homes in our area will most likely never go above $115k (not the greatest neighborhood) and we would have to live (be trapped) in our home for 15 years before we could even think about selling or refinancing. We don't want to short sale because we're not trying to be responsible for the possibility of paying taxes on an $80k, or greater, loss in a sale. We know a foreclosure will effect our credit for 7 years (I think, maybe more or less), but in the same time if we stayed in our home we would still owe way more than it's worth. And in 7 years we could buy another home, we would also be saving about $650/mo by renting for the time being.

Answer: With much respect to the posters above me, most of the information you were given is incorrect because it is outdated. You need to see an attorney before making a decision like this, but here are the facts:

1. If you foreclose, your home will be sold at sheriff's sale, and there is a chance that your lender will sue you for the difference. The chances are small, but it does happen, and you need to be aware of this.
2. Under the HOPE program, you do not qualify for a short sale or a loan modification because you can afford your mortgage as it is. You can learn more about the program by googling it. You will also learn that just a few hundred homeowners in peril have actually been helped by this program. It is a joke. Further, be advised that under the HOPE program you have to qualify by submitting your pay stubs, bank statements, and monthly expenses and assets and liabilities on an FHA form that goes to the bank and the government. Volunteering this kind of information to the government is always a bad idea.
3. Even if you could short sale, you would owe taxes on the deficiency. That was changed in January of 2009. You don't qualify for a short sale anyway.
4. Going into foreclosure is going to lower your credit score, but it will not tank it. The laws on this have changed as well. If a person has an otherwise great credit score with one huge black mark like a foreclosure or repossession, under the new laws their credit score must reflect the whole picture, not just the black mark like was the case before.
5. If you rent a home, you will not have to live there for seven years before you can buy another home. Under the law today, you have to rent for two to three years, paying your rent on time, and then you will qualify under FHA as a first-time home buyer and be able to buy a home. Save your check stubs from the rent to prove you paid it on time. Be advised that this is the law today, and it may change.

In conclusion, this is a major life decision, and you owe it to yourself to consult with an attorney before doing anything. I have given you the most current information, but things are changing all the time. Expect to pay $100 to $500 for a consultation with an attorney, depending on where you live. It will be money well spent. Best of luck to you.

Bank Foreclosed Homes For Sale Nixa MO

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Cleaning Out Foreclosed Homes

Question: Does it seem like Foreclosed Homes are not in the forefront promoted by the Real Estate Industry?

The county I live in has over 6,000 foreclosed homes, yet they seem to try to fetch within 10% of homes for sales by owners (non-distress) and new home communities. Most foreclosed homes I've seen were torn up, ignored, out of date, and simply set aside and not promoted by agents who showed us properties.

Answer: Foreclosures get a really bad reputation due to the fact that they are foreclosures. Not all of them are torn up and a lot of them are, in fact, listed with an agent. I'm an agent in TN and I have been working with a buyer looking at foreclosures. We found a great one, which was listed with another agent and was on the MLS (BTW, we found it on RealtyTrac) and we closed on it last Friday. I don't try to push one property over another because it's not about me. I'm not going to be living there, my client is, and it's my job to advise and negotiate, not to see how much I can pad my pockets. However, there are a lot of foreclosures out there where the previous owners did a number on the home before vacating it, or the home was vandalized by people who saw the house was vacant. But there really are a lot of nice foreclosures out there and if you have a good RE agent negotiating on your behalf, you could come out way ahead of the bank. I actually got the bank to pay my buyers closing costs on top of getting a repair allowance and new appliances. Talk to a reputable RE agent. A good agent ALWAYS puts their clients best interests above their own everyday of the week.

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Foreclosed Homes In Michigan For Sale

Question: Michigan tax tribunal?

I was wondering for the state of Michigan I was told by the city I live in that the state tells them they do not have to recognize foreclosed home sales for the tax assessment. I was wondering if this is true or if their blowing smoke up my rear. I had looked up and down on the internet and I cannot find anything. Thanks in Advance

Answer: They are telling you the truth. Assessed values are at least loosely linked to Fair Market Value. FMV is determined using "arms length" transaction histories. Using figures from a distressed sale can artificially affect true FMV either upwards or downwards. This is a standard practice in real estate appraisals, whether it's for determining values for tax purposes or in delivering an appraisal on a property for commercial purposes such as qualifying for a mortgage loan or establishing an asking price for a property offered for sale.

When a distressed sale takes place it is not a good indicator of what the FMV of the property is. For instance, a home is purchased for $150,000 and is foreclosed upon 2 years later, with a balance outstanding on the mortgage of $140,000. However the value of the home has actually dropped to $120,000 due to the collapse in the real estate market. The foreclosure shows statistically as a "sale" for the $140,000 of the mortgage balance but is NOT an accurate barometer of values in the area. This would skew property values upward artificially.

A foreclosure could skew the numbers the other way as well, say if a property is worth $150,000 with a $100,000 mortgage balance and a $125,000 value. The sale would show as $100,000 and if it was used in establishing FMV for other property values in the area it would tend to bring them down artificially.

If you are attempting to challenge a tax valuation for property tax purposes, your comps must only include sales histories in the area that meet the "arms length" concept, i.e what a willing seller would accept from a willing buyer absent any outside economic influence.

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