A friend of my made me following offer: He has a lot in a good area, but does not have money to build on it. He offers me to finance the construction (legaly I will be purchasing the land and paying for the construction), he will take care of everything, I just need to put my name on the loan. I also sign an “Option to Buy” agreement, so he has an option to buy a house (at predetermened price) once construction is complete.
There is a risk, if Real Estate market will crash, I might end up with a house that it cost more to build then it can be sold for.
For the risk I will be paid $15K when house construction is complete (in 12 month).
State: Colorado
I need to finance $750K
A friend has already invested ~$200K into the house (land, architect, approval, demolishion of an old house, etc.)

Does this appear to be a sound deal? Where can I get more information and advise?
I’d say that risk is really small. Something really bad has to happen to affect the prices on real estate to drop below non-profit point. I also don’t do it because he is my friend. How hard is it to get me screwed on this?

A newspaper in Lee County, Florida recently reported that the number of property foreclosures for the month of July 2007 had topped out at over 1000. Adding to that dismal statistic is the fact that homes sold there during the same time period barely topped 500. This is just one average county of the almost 4000 counties in the United States, yet it is a sad picture that is repeating itself across the country.

For the many homeowners looking for help to stop foreclosure there are many options available. One such option is the “short sale”. This literally means selling a home for less then the loan balance with the lenders agreement in advance to accept the lesser amount. Short sales offer some positives as they tend to cause less damage to credit scores.

With the ever-increasing number of homes going into foreclosure some lenders are more then willing to enter into short sale negotiations. The fortunate homeowner already having an investor in the wings ready to buy the home will find they have greatly improved their chances of getting the lender to agree to new terms.

Look at it from the lenders perspective. They can take a loss or even a slight gain in some cases by agreeing to the short sale, or take the home back and try to sell it in an already stagnant real estate market. Liken it to the old adage of “A bird in the hand beats two in the bush”. Lenders are in the cash flow business so an investor standing by to purchase the house may prove to tempting a proposal for them to pass up.

Locating The Right Investor

Obviously before contacting the lender the homeowner should locate a qualified investor to look at your situation. The question is where do you find investors willing to do a short sale? You may see investors who advertise in your local newspaper. Start contacting realtors. Most realtors have a list of investors they have worked with on real estate deals and possibly have done short sales before. Have the realtor contact the investor on your behalf or call the investors directly and ask if they would be interested in working with you.

Do not be discouraged if at first you cannot find an investor locally willing to do a short sale deal. Expand your search. Look in neighboring counties for possibilities. If you still find it rough going look in other large cities in your state. It’s a numbers game and the more contacts you make the greater the chance of finding help. Once you have the money to back the deal the greater your chances of selling the home to prevent foreclosure.

Conclusion

Real estate foreclosures continue to trend upwards with no foreseeable relief on the horizon. Though short sales can be one answer to homeowners looking to avoid foreclosure, as they cause less damage to the credit score as a foreclosure, costing less money as well, they should still be treated as a final option before foreclosure. It is always in the best interest of the homeowner and the lender to work out a solution between them.

What r the pros and cons of debt consolidation? Who should do it?

I am planning on purchasing a second home and renting out my primary. I have live there for about 3 years (after 2, becomes primary). If I can not rent my home, I am planning to do a short sale or at worst, let it go into foreclosure. From what I have read, the IRS will forgive a home if it is your primary resident. Does anyone no if there is a way around a 1099 claim?

Foreclosure Houses

Foreclosure houses present an opportunity of a lifetime. Foreclosure houses are due to loans that have been defaulted by the current homeowner. Since the homeowner has not been making their payments, the lender has evicted them and taken possession of the property. Lenders hate to do this, their business is to make loans, however, with every loan comes risk. Sometimes the risk does not pay off, which causes these properties to become foreclosure houses. Since the lender makes no money on these vacant foreclosure houses, they want to sell them fast, and at deeply discounted prices. Foreclosure houses are often sold at 20% - 50% less than their current market value!!!

What Is the Advantage to Investing In Foreclosure Houses?

Foreclosure Houses offer any type of investor numerous ways to make and/or save money! First, say you are a first time homebuyer with little to no money down, foreclosure houses can get you more house for the money; or, if you prequalify for a no money down loan, it can get you into homeownership. Remember, the lender does not want their foreclosure houses to sit; they want them to bring in revenue. This means money saved for you! If you are looking for a vacation home, or for a secondary home to rent to others, foreclosure houses again offer an incredible opportunity. Why pay market costs when you can get foreclosure houses for pennies on the dollar? Besides saving money on the purchase, you will realize the built in equity that the former owner left behind. This means if you want to resell or “flip” your recent purchase, you can instantly and make a healthy profit. With that extra $$, you can repeat the process!!! The possibilities and opportunities are endless when investing in foreclosure houses.

• Any Property, particularly foreclosure houses is a sure bet in today’s real estate market.

• Browse our listing of foreclosure houses; these homes all have the potential to be your next wise investment.

• Foreclosure houses and other foreclosure properties offer you the opportunity to make and/or save money.

• When searching for houses for sale, a savvy home buyer will be sure to first search our listings for availability for foreclosure houses.

Browse our Comprehensive Listing of Foreclosure Houses.

Get online access to our database of foreclosure houses that we update TWICE daily with the most recent information available. Foreclosure houses are available all over the country. At ForeclosureDataBank.com, our 7-day trial membership will give you the information you need at your fingertips, 24 hours a day, seven days a week. Finding foreclosure houses or bank foreclosures couldn’t be easier. Click here now!

How does one deal with a foreclosure? Is the buyer allowed to look inside the house and should one go to bank if interested in buying a foreclosure home.

 

In years past, the credit repair industry was tainted by fly by night credit repair clinics and other credit fixing scams. Despite the need that many people had to get help with repairing their credit, it was hard to find a credit repair company they could trust.

Today, the credit repair industry has matured thanks to increased awareness and federal regulation. The keystone of this regulation is the Credit Repair Organizations Act, also known as CROA. Recognizing the value of professional credit repair services, Congress enacted CROA in order to define appropriate actions of a credit repair organization and to outlaw many of the practices typical of a fraudulent credit repair clinic.

While there are still some fraudulent credit repair organizations trying to take your money, by understanding the basic ideas of CROA, you can easily identify these scams and make sure you avoid them. Knowing what things credit repair companies are and are not able to do, will keep you from becoming a victim.

Below are three key points of CROA and what they mean to you as you are shopping for a credit repair company.

1) Credit repair organizations cannot charge fees for services before they are rendered

Most credit repair scams start off the same way. You are required to pay a large upfront fee, often times in the range of hundreds or even thousands of dollars. Then, after you have made the payment, the credit repair company does little or nothing to repair your credit and in some cases, simply disappears with your money.

To keep you from becoming a victim of this type of scam, CROA prevents credit repair companies from charging for services before they have been provided. If a credit repair company charges a set up fee, they cannot collect that fee until after the task of setting up your case has been completed. If a credit repair company charges monthly fees, those fees cannot be collected until after a month’s worth of services have been provided.

Keeping this requirement in mind is probably the most important thing you can do to avoid becoming a victim of a credit repair scam. Even today there are companies like Champion Credit Consulting and Credit Clean who will try to charge you $795 and $1223 before they have done anything to repair your credit.

2) Credit repair organizations cannot make incorrect or misleading statements

Preying on the naivety and lack of knowledge of people looking to improve their credit, many credit repair companies entice people with claims of improving their credit score 100 points in 60 days or removing bankruptcies from their credit reports. The truth is that while it is possible for each of these things to happen, no credit repair company can promise that they will.

In fact, no credit repair company can promise to remove anything from your credit reports because ultimately, it is up to the credit bureaus what items are listed on your reports. Disputing credit is not failsafe. There are cases where no matter what you do, a particular negative item will not be removed from your credit reports.

Any company that promises to increase your credit score or remove any negative items from your credit reports is violating the law. According to CROA, and the nature of the credit system, the best any credit repair company can do is promise to put forth a best effort. Just like in a court of law, a lawyer can promise to work as hard as they can, but they cannot promise that you will win over the jury.

3) Credit repair companies must inform you of your rights

The credit system is not easy and many people do not adequately understand their rights within the system. This lack of education makes it easy for con-artists to prey on the unaware.

So you do not get caught off-guard, credit repair organizations are required to inform all prospective customers of their right to order their own credit reports and their right to dispute the questionable information they contain. They are also required to inform you of your right to cancel your credit repair service within 3 days of signing up for no reason and with no penalty.

When signing up with a credit repair organization, CROA dictates that you should be presented with a disclosure statement titled “Consumer Credit File Rights Under State and Federal Law”. This statement describes the rights mentioned above.

CROA has changed the landscape in the credit repair industry and has been very effective in helping the FTC identify and prosecute shady credit repair organizations. Because of CROA, you can feel confident that your money will be well spent when you enlist the services of a legally compliant credit repair company.

I am not sure about anybody else but I hate these idiots that buy houses they cant affored and the government forces me to bail them out. I am a father and I made good decisions and now I am stuck using my hard earned money to bail these idiots out that dont feel like paying there mortgages. I would like to hear another opinion on this.

We want to buy a foreclosure that is very damaged cosmetically (no appliances, pee all over the hardwood floors and walls, smelly, ugly, etc.). Is it true that I need a construction loan for this type of purchase? If I have my down payment plus the money I need to make it livable, why would I have to get a construction loan at a higher rate. I just want a conventional mortgage on this.
Also should I get the loan from my lender or from the bank that owns the home? Thanks,

The Federal Deposit Insurance Corporation (FDIC) has compiled information from different sources on the rate of foreclosures in America and the outlook is not promising. According to the report, the Mortgage Bankers Association (MBA) reported that every three months 250,000 families enter into foreclosure in the U.S. That translates into one out of every 200 American homes. Mortgage default has reached epidemic proportions in our country and an ever-increasing number of families are facing homelessness or at least the loss of their homes and financial uncertainty.

HUD Suggestions to Avoid Foreclosure

U.S. Department of Housing and Urban Development (HUD) offers some tips to try to avoid foreclosure, they include:

Do not ignore the problem - The further behind a borrower gets in their mortgage payments, the harder it will be to reinstate the loan and the more likely the borrower will lose his/her home. Contact the lender as soon as possible - When a borrower realizes he/she will have a problem making the mortgage payments he/she should let the lender know immediately. Lenders can offer options to help borrowers through difficult financial times. They do not want to repossess a home. Open and respond to all correspondence from the lender - Lenders usually include information that may help a borrower keep his/her home in the first notices they send out. This information could help the borrower avoid foreclosure and it usually includes default prevention options. Know the rights afforded to a borrower - A borrower should review the loan documents so he/she may have a clear understanding of the lender’s options if he/she cannot make the mortgage payments. Learn the local foreclosure laws and action timeframes of the jurisdiction where the residence is located. Understand the foreclosure prevention options - A borrower can contact his/her lender to find out what loss mitigation or foreclosure prevention options are available to help them avoid foreclosure.

HUD suggests that a borrower prioritize his/her spending if they are having trouble keeping up with their mortgage payments. They recommend that the borrower’s first order of priority should be healthcare and after that, it should be to keep his/her home. They should review their finances to see where they can cut spending in order to make the mortgage payments. The individual should make a budget and sacrifice nonessential spending until he/she can catch up with the mortgage payments. HUD also recommends sacrificing assets in order to keep the home. The liquidation of assets such as a second car, jewelry, or a whole life Insurance Policy can help reinstate the loan.

Steps to Foreclosure

If a borrower defaults on his/her mortgage, the mortgage holder can typically initiate foreclosure according to the timeframe specified in the mortgage agreement. That period of time can vary but it will be specified in the mortgage agreement. There are two basic types of foreclosures recognized across the country but there are also regional foreclosures that are used in some jurisdictions. Most foreclosures are conducted in state or local courts but a few are conducted in Federal courts. A foreclosure is a legal action and all parties involved must be notified, even though requirements for notification vary from one jurisdiction to another.

Any profits from the sale of the property are used first to satisfy any outstanding taxes then to pay the outstanding mortgage and any legal costs of the lender. After that any funds that are left are use to compensate other liens against the property. The borrower is allowed the remaining proceeds if there is any money left after all debts are satisfied.

Types of Foreclosures

The different types of foreclosures include: Judicial Foreclosure - This type is available in all fifty states and it requires a court-supervised sale of the mortgaged property. A Judicial Foreclosure allows the borrower a one-year “right of redemption” where he/she can buy the property back from the bidder. This type of foreclosure allows the lender to file a deficiency judgment against the borrower for the balance of the money owed if the proceeds from the sale fail to cover the mortgage. Foreclosure by power of sale - This type is allowed in twenty-nine states if a power of sale clause is included in the mortgage agreement. Foreclosure by power of sale involves the sale of the mortgaged property by the mortgage holder without court supervision. Typically, this is a more expedient way of foreclosing on a property. This type of foreclosure does not allow the mortgage holder to seek a deficiency judgment against the borrower. Strict Foreclosure - This type is handed down through a decree and is only available in a few states. In this type foreclosure, the property is not sold but the borrower is ordered by the court to pay the amount owed within a specified period. If the conditions are not met, the lender has the right to take possession of the property. Once the lender has the title, the property can be sold to satisfy the loan. If the profits from the sale do not satisfy the amount owed, the lender can file a deficiency judgment against the former borrower. A Trustee’s Sale - This is an easy form of Foreclosure and a trustee under the stipulations of a Deed of Trust performs the sale. In this process, the borrower grants a trustee the power to sell the property through a trustee’s sale if the borrower defaults on the mortgage. Any proceeds from the sale are dispersed according to the priorities outlined in the deed of trust. This is a quick and economical way of foreclosing on a property but it does not allow for a deficiency judgment against the borrower. Reasons for Foreclosure

Hundreds of thousands of U.S. families are losing their homes to foreclosure every fiscal quarter making this a foreclosure and financial plague on our society that will be reeling for years to come. The FDIC published information from a study conducted by the Homeownership Preservation Foundation (HPF) on some of the reasons for the high rate of foreclosures in America. The study suggests that many U.S. households are at a financial tipping point and many families are on the verge of losing their homes.

The economic tipping points for American families in danger of losing their homes outlined by the HPF include:

Thirty-two percent are because of the loss of employment. Twenty-five percent are because of a healthcare emergency in the family. Eighty-five percent of households are behind one mortgage payment. Fifty percent of households are behind two payments. Most Americans households do not have any savings, do not have any credit available, and their extended families are in a similar situation. Most U.S. homeowners are first-time mortgagors, and most home mortgages are less than three-years old. Many American households have refinanced their homes two or three times.

The HPF estimates that forty-three percent of U.S. households live beyond their means and that almost half of all homeowners in this country spend more than they earn. The foundation calculates that approximately fifty-two percent of American employees live paycheck-to-paycheck and that roughly forty-two percent of Americans do not have enough liquid assets to support themselves for the recommended three months should they have a financial crisis.

Read this foreclosure article and other articles at LawFirms.com