There’s a whole slew of ominous terms being bandied about these days when people talk real estate. With some northern US towns hit so hard by the housing downturn that over 30% of their houses are empty, the increase in anxiety is no great wonder. But homeowners need not panic, there are alternatives to foreclosure.

Getting in over your head financially doesn’t have to mean walking away from your home investment. As a first step, you should always try to work things out with your bank. Contact them as soon as you’re having trouble with your payments. Banks don’t like foreclosures and you may be able to make a deal that will make your payments bearable and allow you to keep your home. There are also some programs though HUD that can help you stay put until the market balances out.

Of course working out a deal isn’t always possible but saving your credit rating is. Once you’ve exhausted your options, you may want to try to negotiate a short sale.

WHAT IS A SHORT SALE?

When your home is worth less than its mortgage ti’s known as an upside down mortgage. When a lender agrees to absorb the difference in a sale, it’s called a short sale. Like a last exit before foreclosure, short selling your home won’t make you any money but when your debt is more than you can handle, negotiating a short-sale may rescue your credit rating and let you avoid the embarrassment of foreclosing.

In order to qualify for a short sale:

1. Your loan must be in default at least two months

2. Your house must be worth at least 63 percent of what you owe and sell for at least 82 percent of the “as-is” appraised value.

3. You must sell the house within three to five months

4. You must convince your lender to assume the cost of the short sale:

THE COST OF SELLING = Real estate commissions + Taxes + Closing costs + Title fees + Liens of record + Balance of all loans on the home including interest and late fees

THE COST OF THE SHORT SALE = Cost of selling - Appraised value

Once these figures are delivered to the bank, the lender can take up to 45 days to balance the cost of the short sale against the cost of a foreclosure. Not every lender will agree to a short sale though, which is why hiring a realtor may be the best way to negotiate this kind of deal. Contact a realtor in your area that’s experienced in negotiating this type of arrangement. They may have more leverage with lenders and be able to guide you through the process. They will also be able to help you find a buyer.

Where do most investors turn to when they seek foreclosure opportunities? Sure, they take a look at free foreclosure listings or even sources of foreclosure listings that they pay for. While these sources may lead to productive and profitable deals, investors often shy away from what I think is an untapped market in the world of foreclosures and foreclosure investing. What is this market? What do you need to know in order to tap into these preforeclosure opportunities.

This often overlooked market niche in the world of foreclosure investing is luxury home foreclosures. Many investors shy away from them, even if they represent good short sale opportunities, because of the bigger price tag. Folks, foreclosures are like any other type of real estate in that it comes down to the quality of the deal. If luxury home foreclosures mean getting deals 30-50% below market value, aren’t these foreclosures at least worth considering?

Foreclosure investing is an amazing opportunity but there are many aspects to consider, especially if you are really going to learn real estate short sales or venture into the deep end of the pool with profitable luxury home foreclosures. Good foreclosure training and good short sale training programs cover all the features you need to learn, including marketing, negotiations, raising capital, and even the emotional aspect of the sale, a natural by-product of foreclosures that can often complicate short sale deals.

My efforts here are to assure you that there are indeed unlimited deals to be found within the realm of foreclosures, and that includes properties of all shapes and sizes. Whether you’re just curious how to make money with foreclosures or really dive in and engage in serious short sale training (sometimes called loss mitigation training), then you owe it to yourself to check out my Preforeclosure Cash Flow System and the many short sale training modules within it that cover how to really launch your foreclosure business.

In closing, the entirety of the foreclosure process is ripe with deals that are there for the picking. In today’s market, the short sale process is as much as part of foreclosures as any other part of the business. This is especially true when it comes to luxury home foreclosures. When you are serious about really building your business, take my advice, and commit yourself to real estate short sale training. You will learn how to make money with foreclosures and you will also learn how to master short sales like a business pro. I wish you the very best in success in real estate investing.

To get a Free Online Foreclosures Training Course in Short Sales

I am paying way to much for my home that dropped about $250,000 in value and will consider letting it go if nothing changes. Also, what are the chances that my mortgage company will help me?

Real estate in my area is in a slump and I am trying to sell to relocate. I am on my third realtor and still nothing. I am thinking about offering to sell the house for 10K(my equity) and allow the buyer to take over payments(56K) but my loan was an FHA loan(Countrywide is the lender) Can I do this?

I need help with credit repair. I have tried it on my own but have not been able to do it. I have been told these guys are really good. Just wanted to know if there is anyone else who has used them. Thanks.

Credit Repair and the Great Illusion

Credit repair is a discovery process. The vast majority of consumers in the United States are intimidated by the thought of credit repair. The credit bureaus are viewed in the same light as the Internal Revenue Service; a temperamental and potentially ruthless big brother. Oddly enough, this perception could not be farther from the truth. It turns out that the credit bureaus are quite tame and even reasonable, if you know how to manage them.

Protecting the Myth

Like the Wizard of Oz, the credit bureaus live happily behind the curtain of illusion, benefiting from the aura of power. Let’s dispel the myth a bit to spark your credit repair efforts. The credit bureaus are not government entities, nor do they have any government blessing. They are big business, and exist to make money. And they do a great job of it. They are well managed, well focused, and extremely profitable. And in spite of the fact that they have become indispensible intermediaries and guardians of your precious credit score, any communication from you is an unwanted burden on their bottom-line.

Credit Repair and the Truth

So, what went wrong? If the credit bureaus are doing such a great job of running their operations why are there so many errors in consumer credit files? Why is credit repair even needed? There is no contradiction here. Profitability and competence in no way guarantee an accurate product. In fact, by moderating the effort that goes into quality control the credit bureaus demonstrate their business savvy and bolster their bottom line. Does this seem outrageous? After all, your financial life depends on your credit scores. Shouldn’t the credit bureaus be held to the highest level of accuracy when it comes to such important data? Yes and no.

Legislation Cuts Both Ways

Because of the importance of the product they offer, the credit bureaus have been on the business end of countless lawsuits. In fact, a day does not go by when a non-compliance lawsuit is not filed against one of the three major credit bureaus. The importance of credit repair and the groundswell of consumer concern have not escaped the notice of federal lawmakers. The law that governs the credit reporting industry and provides legal leverage used by professional credit repair services is called the Fair Credit Reporting Act (FCRA). There is much in the way of consumer protection built into the FCRA, but there is just as much protection for the credit bureaus.

Credit Repair to the Rescue

The law simply demands of the credit bureaus that reasonable steps be taken to maintain quality. And here is the essential point for all of those interested in credit repair to be aware of; reasonable steps may be determined by the credit bureaus based on the costs associated with implementation. In other words, if it costs too much to fix, it’s going to stay broken. But, not to worry, you are not without a remedy. Credit repair to the rescue.

Credit Repair and the Bureaucracy

As frustrating as it may be to discover that there such a margin of error allowed in an industry that has so much power over your life, there are ways you can make sure that your credit report shines. All the credit repair tools you need are built into the same tome of law, the FCRA. Many people think of the FCRA as the consumer protection law that was designed to force the credit bureaus to provide more accurate data. It’s not so.

Looking More Closely

A close reading will reveal the fact that the overriding focus of the consumer protection built into the FCRA provides consumers with basic legal rights to rectify credit reporting errors. This is a radical difference from forcing the bureaus to be accurate. The true message of the FCRA is, look out for you, because no one else will.

How Bad is it?

If the FCRA puts so much of the burden of accuracy on the consumer, it means, by inference, that in the absence of consumer participation credit reports are likely contain errors and require credit repair. And that is exactly what has occurred. Fully seventy-five percent of consumer credit reports contain errors. Fifty percent contain errors significant enough to cause those afflicted to pay premium interest rates and even get denied for loan requests.

The Law is Your Sword

Credit repair, as a result, is as an essential process in your life as a regular physical examination or tuning up your car. Credit repair is far more than a credit rejuvenation for those with past credit issues, it is a necessity for everyone. If you don’t have the time to manage the credit repair process on your own, hire a professional. It’s important, it’s your credit, take care of it. Good luck!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.

I am checking all my options to try to come up with solution to my 3 months past due mortgage.

Subprime Predatory Lending Crisis that’s hitting alot of hardworking people buying their first home and then the lenders accelerate your income without your knowledge and in six or seven months you need to refinance because you have an AMR mortgage. Has anyone experenced this? If so, my family has been included in a documentary that was done in NOrth Carolina by the Center for Responsible Lending and the North Carolina Realtors Commsion and also the Banking Commisoner. Tell me your story? Let me also know where we can go live after bankruptcy.
Yes, and your realtor’s husband didn’t do the inspection and this was our first home after nearly twenty-five years of marriage and, maybe it was my fault since I had did all of our business after working for our local police dept for nineteen years I was just diagnoised with MS and I already had Lupus with siezures and mini-strokes. So, I do take responsibility for this and believe me I had no idea that our realtor would do what she did. I guess we were taken but you have a child that was misdiagnoised at the age of two and had forty-two brain surgeries before she was fourteen. But, God is great and she’s in nursing school now we will be okay. We have done a documentary for the Center for Responsible Lending and the Attorney General of NC. It will be on u-tube in another week or two!!! So you can keep you jugments to yourselves because God deals with everybody in the end! Doesn’t he!!! God Bless and I hope your holidays are great!!!

The number one mistake, hands down, that most people make when building their home is not allowing enough time to get through the process, especially for those people who are acting as an owner-builder and building without a general contractor.

Building a new home, and obtaining a loan to do so, is not as simple as going out and obtaining a mortgage to buy an existing home. You CANNOT do it all in 30 days. Period. Do not expect to do so. This pre-building and planning stage is often cited as the most stressful period of most people’s building experience.

If you are buying a piece of land and wrapping its purchase into your construction loan, then you must be sure you allow enough time to get to closing on your construction loan before your land purchase contract expires. Do not let the seller or the seller’s real estate agent pressure you into a 30 day contract. This can be tricky, as most sellers and agents have no idea of the construction planning process you will be going through.

They only know that the last time they bought or sold a house it took about 30 days. Therefore, you will need to negotiate more time to get to closing unless you already have finalized blueprints, budgets, and permits. Realistically, sixty to ninety days should be the minimum contract period for the land, depending on how well prepared you are.

As mentioned, this is tricky. The complicated part is that often you will not finalize your home plan until you decide on the land. Usually, this is due to the uncertainty of the foundation plan - does the land slope or is it flat. You will need to decide quickly if you do not already know this answer.

Now that you have decided on the land, you have a ton of work to do as quickly as possible. Getting your bids (properly) to complete your budget is the single most important thing you need to do in the whole construction planning process, especially for owner builders. And, it can rarely be done in just a couple weeks.

And to make matters worse, when the clock is ticking towards your contract’s closing date, you will often be pressured to skip a step or let some of the budgeting and bids slide. This is construction project suicide. Proper budgeting is vital to building a new home. Even if you are hiring a licensed general contractor to do the work for you, you will need to take the time to flush out the exact budget and sign a proper contract for all of the work to be done.

You need as much time as possible to complete your budget, understand the county building and permit requirements, perform any soil or percolation tests, and complete your loan documentation. Sixty days will seem to fly by.

If you cannot get more than 60 days on your land contract, you will need to have much of your budget already in place. This means committing to a home plan as early as possible and getting as many of the bids that are not dependent on the lot ahead of time. Then, you can focus on just the remaining items to complete the budget.

The best course of action is to get pre-approved for your loan once you have decided to build a home so that you know your maximum budget you can qualify for. This way, you can properly set a maximum price for the lot (based on what you have seen in the area) and then choose an appropriate home plan that can be built for the remaining budget or less.

You will now be able to complete much of the planning while you are shopping for land. You can even decide to only shop for land that is flat or sloped or that meets whatever other requirements you may have.

The important thing to understand is that these decisions, which may be some of the biggest of your life, must be made quickly if you have not planned correctly or if you are under the pressure of a closing date. Do everything possible to organize your project before the clock starts counting down towards the seller’s closing date.

Once you have a lot, a home plan and a budget, you will still need to complete the rest of the loan process. You will work with your loan officer and loan processor to provide the required documentation to complete the loan.

The appraisal and title work will have been ordered by the processor. You will need to schedule an appointment with the appraiser to review your plans and deliver the appraisal fee. You may also need to contact the closing agent to be sure they have all of your contact information.

While the appraiser and closing agent are doing their jobs, you will need to submit any remaining income documentation, asset statements, or other requested information. You will also need to arrange your insurance and permit applications during this time. As you can see, you will be busy. This is the trade-off for the chance to build the exact home that you want.

Once the appraisal, title work, budget, and all other required documents are in the hands of the lender, the file can be submitted to final underwriting. To be safe, expect that you will close in approximately ten days to two weeks from this point, barring unforeseen complications.

Please don’t tell me your opinions on the real estate market i really don’t care what your thoughts in market bubbles are.