Canton, MI homeowners discover ways to avoid foreclosure.

July 11th, 2008 Lee Bittinger Posted in Foreclosure and Short Sales 1 Comment »

Plymouth and Canton, Michigan homeowners facing foreclosure usually don’t know they have many options. We help them discover ways to avoid foreclosure they never though of or were told would not work.
 
If you are like most homeowners facing foreclosure, you want to keep your home. Perhaps you raised your family in this home and have fond memories of the good times you’ve had. Maybe you have school-aged children, and you don’t want to move them out of the neighborhood or school district and away from their friends. Or, maybe you just dread the thought of packing up and moving.
 
Unfortunately, for about 90 percent of homeowners facing foreclosure, selling the home and moving to more affordable accommodations is usually the best option. If you were unable to make the monthly mortgage payments before, making the payments in the future while trying to catch up on missed payments can be quite a challenge. Understanding the intricacies of foreclosure is the first step to a solution. We find many couples ignore the possibilities that there may be a way out of the mess. Some spouses don’t even tell their partners there is trouble until it is too late. Open and honest communications and a solid work out plan could help you keep your home.

But can you keep your home?

That depends on several factors, which this article explores.

Is This a Temporary or Permanent Financial Setback?
 
If you are facing foreclosure because of a temporary financial setback, such as a short-term layoff or a large, unexpected medical bill, then you have a much better chance of keeping the home. As long as you can afford the monthly mortgage payments going forward, you should be able to work out a payment plan with the bank to catch up on missed payments.
 
Is Bankruptcy an Option?
 
If you’re behind on your house payments primarily because you’re buried in credit card debt and other debts not secured by your home, you may be able to file for bankruptcy and keep your home. Consult with a reputable bankruptcy attorney in your area to find out whether bankruptcy is a viable option for you and which assets you would get to keep.
 
Don’t dismiss the bankruptcy option before exploring it fully. A bankruptcy attorney may charge you $350 to $400 for the initial consultation, but it is usually worth the cost.
 
Do You Have Mortgage Insurance?
 
If you have been paying mortgage insurance, that insurance could offset what the bank stands to lose from your inability to pay and may make it more appealing to work out a deal with you or negotiate a short sale (accepting less than full payment of the loan), so you can sell the home and at least break even.
 
Is Your Bank Willing to Cut You a Deal?
 
The mortgage crisis has weakened the bank’s ability and willingness to foreclose, because they simply cannot handle the vast number of foreclosures. They may be more inclined to cut you a deal that allows you to keep making payments rather than foreclose on you. Foreclosure sticks them with a property they must rehab and sell, and your property’s value may not be sufficient to cover what you owe on your mortgage. Foreclosure usually costs the bank a lot of money.
 
Contact your bank and see what kind of deal they can offer you. They may forgive part of your debt, modify your mortgage to make your monthly payments more affordable, or work out a payment plan with you to catch up on missed payments over time or add them to the end of your mortgage.
 
Can You Borrow Money to Reinstate?
 
Prior to foreclosure, you can reinstate the mortgage by catching up on missed payments and penalties. If you have family members or friends who are in a position in which they can help you out, consider asking them for a loan to reinstate the mortgage.
 
Caution: Don’t reinstate unless you can start making your regular mortgage payments and have enough money to start paying back the loan from your relatives or friends.
 
Can You Tighten Your Belt?
 
If you are earning sufficient income to pay your bills but simply overspent your way into foreclosure, can you tighten your belt enough to get back on track? Be realistic. If keeping the home is going to place a significant strain on the family finances, moving into something more affordable may be your best option.
 
For information on how to obtain free or low-cost assistance from a HUD-approved credit counselor, call 1.888.995.HOPE or visit HOPE NOW.
 
Don’t Borrow Trouble
 
Freddie Mac’s Don’t Borrow Trouble website advises against borrowing trouble. Under duress, many homeowners panic and seek ways to borrow the money they need to bring their mortgage loan current. This can lead to high-interest loans and the possibility of signing over rights to your home to a con artist who offers what seems to be an easy solution.
 
Work with your lender and reputable professionals (an attorney, credit counselor, mortgage broker, your lender, and/or a Realtor) to determine your best course of action. The person who shows up at your door uninvited and offers to help is usually the wrong choice.
 

Ralph R. Roberts, GRI, CRS and his team of foreclosure experts regularly assist families facing foreclosure and have authored Foreclosure Self-Defense For Dummies (John Wiley & Sons).

The solutions are many when you have someone to help guide you through the maze.

We can help. Others have found our store of knowledge has gotten them out of their foreclosure mess a lot less damaged than they thought would be the case.

Call us today for a free and confidential consultation.

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Canton, Mi home buyers find bargains in pre foreclosure houses.

June 26th, 2008 Lee Bittinger Posted in Foreclosure and Short Sales, Real Estate Investing No Comments »

Buy that sinking house before it totally submerges into the foreclosure process! That’s our advice to home buyers looking for homes in Canton and Plymouth, Michigan.

Home buyers usually ask us to search specifically for foreclosed houses thinking this is where the best bargains are.

Savvy buyers look for houses that are in danger of foreclosure but have not gone into that process yet

Understanding the stages of the foreclosure process can help you gauge when to buy. Once foreclosed, the price you may get on a house may not be the best. The reasons are varied but usually have to do with rules and regulations concerning each stage of the foreclosure process.

You can find great deals on homes at any stage in the foreclosure process – preforeclosure, the foreclosure auction, or post-auction (from banks and investors) – but it’s often a case of the early bird getting the juiciest worm. By purchasing the property directly from the homeowner in preforeclosure, you reap several benefits, including the following:

•           A lower price, because you’re not competing against other investors in open bidding.

•           An opportunity to inspect the home, because you can make your offer conditional upon the home passing inspection. (When you buy at auction, the homeowners may not let you inside prior to the auction to inspect the home.)

•           Assurance that you are buying the home and not just a mortgage. When you bid at a foreclosure auction, you are buying a mortgage, not a home. If you bid on a second mortgage by mistake and do not also buy the first mortgage, you could lose your stake in the home and any money you paid for that mortgage. Buying directly from the homeowner assures you that you are buying the home.

•           Security that you won’t lose the home in redemption. In Michigan homeowners have the right to redeem their home (buy it back) after the sale. You could lose it to the homeowners or to another investor (working with the homeowners) even if you win the auction. If the homeowners sell to you, they have no right to redeem.

You can find homes in preforeclosure by reading the foreclosure notices every week they are published. By law, foreclosure notices must be published for a number of consecutive weeks prior to the sale in a local newspaper or county legal news publication. Check with your county’s register of deeds to find out in which publication(s) the foreclosure notices appear, and then subscribe to at least one of those publications.

To reduce the competition even more, you may want to consider learning about preforeclosures even earlier in the process – before the foreclosure notice or notice of default is published and becomes public knowledge. To obtain early notice, try the following techniques:

•           Network with attorneys who work with distressed homeowners in bankruptcy, foreclosure, divorce, and probate. These attorneys often have to help their clients liquidate assets.

•           Network with other real estate and mortgage professionals.

•           Tell everyone you know that you are an investor who purchases homes for cash. Better yet, create your own business card and give it to everyone you meet. People will know they can turn to you if they ever need to sell in a hurry.

•           Treat distressed homeowners with compassion and a sense of fairness and do a good job rehabbing the home. By treating people right and doing good work, you earn a reputation that speaks well of you. People who need to sell their home in a hurry will come to you rather than another investor who has a less stellar reputation.

•           Advertise that you buy houses for cash. You can post an ad in the local newspaper and hang fliers and signs around town (assuming this is acceptable in the area where you want to buy homes). Before you advertise, however, make sure you have the financing and resources in place to handle several properties at once.

Remember to choose your investments wisely. You won’t get every house you see, nor should you want every house you see. You can afford to be picky and patient – wait for the right opportunity to come your way. And do your homework to make sure it is the right opportunity for you.

For more information ask Ralph R. Roberts, GRI, CRS. An experienced real estate investor and consultant and the author of Foreclosure Investing For Dummies (John Wiley & Sons).

Because of our marketing and longevity in the Detroit western suburbs many homeowners contact us us for advice when they reach the early stages of foreclosure. Our goal is to help people faced with foreclosure by strategizing how to get their home sold with as little damage to their finances as possible. This usually requires a short sale or some other avenue that involves bank refinance or work out. We maintain a database of these houses and with seller permission we have sold several homes before they even reached the market. If you are interested in obtaining a list of these homes call us at 734-459-2600 and ask for the "PreForeclosed Hot List".

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Having a hard time facing foreclosure?

May 12th, 2008 Lee Bittinger Posted in Foreclosure and Short Sales, Home Financing, Real Estate News No Comments »

Canton Homeowners hide from foreclosure Losing your home to foreclosure is a reality many people have a hard time facing. The growing number of foreclosures in Canton, Plymouth, and the surrounding communities are accompanied by homeowners unwilling to face the facts. Instead of hiding, the best advice is to talk to your lender as soon as you can.

 When the bill collectors are calling and you begin receiving increasingly nasty letters from your creditors, the naturally human impulse is to hide in your home, bar the doors, and screen the phone calls. After all, you don’t have the money to pay your bills, so what’s the point in talking to these people?

First, realize that you have the power to make the calls and letters stop. According to the Federal Trade Commission’s Fair Debt Collection Practices Act, you can stop the harassing phone calls and letters by writing a letter to the debt collection agency asking them to stop. Once they receive the letter, they can contact you only once more to notify you that they will no longer contact you and to inform you of any actions they intend to take to collect the debt. This puts a stop only to the phone calls and letters – it doesn’t erase the debt.

Another way to put an end to the calls and letters, at least temporarily, is to file for bankruptcy. This is not to say you should file for bankruptcy, but if you have a lot of unsecured debt (such as credit card debt as opposed to a mortgage, which is secured by your home), filing for bankruptcy could be the best option. Upon filing for bankruptcy, the courts declare an automatic stay. This means that your creditors can no longer contact you regarding your debt. If they do call you, simply tell them that you filed for bankruptcy. They then have to work through the courts to collect their debt, rather than collecting directly from you.

Knowing that you have the power to make the phone calls and letters stop can give you some breathing room, but often the best option is to simply come clean with your creditors and find out from them what your options are. The longer you wait, the less time you have to negotiate a reasonable solution and payment plan.

Call any lenders who have a lien against your home (a first mortgage, second mortgage, home equity loan, construction loan, etc.). Let them know your situation and how much you can afford to pay per month. Don’t exaggerate how much you can pay. Give a realistic estimate, and see what they have to say. Ask the lender’s representative to explain all of your options:

 

•   How long would they give you to sell the home and pay off the debt?

•   Would they be willing to negotiate a short sale – accepting less than you currently owe as “payment in full?”

•   How much would it cost to reinstate the loan – catch up on missed payments (plus any penalties and interest)?

•   Would the bank be willing to negotiate a forbearance, in which you could catch up on back payments in installments?

•   Is the bank willing to modify the mortgage – perhaps by increasing the term (stretching payments over a longer period of time), decreasing the interest, forgiving a portion of the debt, or adding missed payments on to the end of the mortgage?

•   Would the bank be willing to accept a deed in lieu of foreclosure, whereby you would provide the deed and keys for the home in exchange for having any remaining debt forgiven?

Once you have all of your options on the table, you can make a much better decision of how to proceed.

When discussing your options with the bank’s representative, remain calm, rational, and respectful, but firm. Advocate for yourself without becoming abusive. Otherwise, the person you’re dealing with may choose not to cooperate with you. Keep detailed notes of who you talked to, when, and what was said, so you can refer back to these notes if needed.

Ralph R. Roberts, GRI, CRS and his team of foreclosure experts regularly assist families facing foreclosure and have authored Foreclosure Self-Defense For Dummies (John Wiley & Sons).

During the last few years Noel and I have helped dozens of families through their foreclosure woes. Additionally we have closed over 50 short sale transactions. To successfully close these kind of transactions we have had to develop an expertise in dealing with banks and lending institutions.

If you are having foreclosure problems call us for free advice on how to handle your communications.

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When to buy foreclosures in Detroit Michigan Suburbs

April 16th, 2008 Lee Bittinger Posted in Foreclosure and Short Sales, Real Estate Investing 1 Comment »

The number of houses going to foreclosure each week in Wayne County is staggering. About 90 % of them are in Detroit and may not be the best bargains. Many however are in the suburbs and could present good buying opportunities.

 Canton, Plymouth, Northville, Livonia, and all the surrounding cities are experiencing an increase in the number of homes that foreclose. Buying them can be a risky business so it is wise to know the process. See Foreclosure 101 for a complete analysis of the foreclosure process in Michigan. It varies from state to state so taking advice from a national resource could be risky.
 
 Noel and I attend the Sheriff’s sale downtown when we have a listing that is about to be auctioned so we can get first hand knowledge of the auction details. There are typically 300 to 400 sales when we go and this occurs twice a week. That means a lot of homes are coming on the market at what appears to be rock bottom prices. Or are they?
 
There are many stages of foreclosure. Many of our clients ask us when they should consider buying. The discussion below should shed some light on the subject.
 

Foreclosure is a long, drawn-out process that usually begins as soon as the homeowner stops making monthly mortgage payments on time and ends when the homeowner negotiates a solution with the lender, sells the home and pays off the mortgage, or has the home sold at auction and eventually leaves voluntarily or is evicted. As an investor, you can jump in at any stage of the foreclosure process:

•           Preforeclosure: Purchasing the home directly from the homeowners prior to the auction often results in the best deal for both you and the homeowners. Because the foreclosure notice hasn’t been published yet, other investors may not be aware of the situation, reducing the competition. To discover pre-foreclosure opportunities, however, you need to network with people in your neighborhood and let them know that you buy foreclosures, so homeowners who are having trouble making their payments will know how to contact you. It also helps to network with bankruptcy attorneys, divorce attorneys, mortgage brokers, real estate agents, and others who may hear about foreclosures very early in the process.

•           Foreclosure auction: The foreclosure auction is the next stage in the foreclosure process in which you can acquire a property. Foreclosure notices are typically posted in newspapers and county news publications, complete with the date, time, and location of the sale along with details about the property, its owners, and the attorney representing the bank. To successfully bid at a foreclosure auction, you really need to do your homework and know what you are bidding on and how much it’s worth. Otherwise, you can get stuck paying tens of thousands of dollars for a worthless piece of paper. Don’t let this scare you off. You can find great deals at foreclosure auctions as long as you know what you are bidding on and you set your bid limit before the bidding commences.

•           Post auction: Just because the auction is over does not mean that you lost the property for good. If an investor purchased the property at auction, you may be able to purchase it from the investor. If nobody bid on the property, the bank takes possession (after any redemption period), transfers the property to its REO (Real Estate Owned) department, and then hires a real estate agent to list the property for sale. By establishing a relationship with the REO manager, you may be able to get an early lead on the property. In areas that have a redemption period, you may also be able to work with the homeowner to buy back the property from the investor who purchased it at the auction and give the homeowner a little extra cash for helping you do this. (During a redemption period, the homeowner has the right to buy back the property from the investor.)

If you decide to invest in foreclosures, the best strategy is to choose an entry point and focus on it. Specialize in preforeclosures, foreclosure auctions, or post-auction purchases until you become an expert on that entry point. You can then expand your operation to other entry points as you gain experience.
 
Ralph R. Roberts, GRI, CRS is an experienced real estate investor and consultant and the author of Foreclosure Investing For Dummies (John Wiley & Sons).
 
Since we deal with all aspects of the foreclosure market we can help you in any stage of the process.
 
Have you ever bought a foreclosed house before? Do you want to learn more about the process or have a list of local foreclosures sent to you daily? Call us or post a comment for answers on how our services can help you find a real steal.
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New MSHDA Legislation to Help Michigan Citizens Threatened With Mortgage Foreclosure

April 3rd, 2008 Lee Bittinger Posted in Foreclosure and Short Sales, Home Financing, Real Estate Investing 1 Comment »

Homeowners in Canton, Plymouth and all Michigan cities may be able to breath a little sigh of relief. The state housing authority and lenders have joined forces to offer new tools to help some families save homes from the ravages of foreclosure.

Yesterday, April 2, 2008 Governor Jennifer M. Granholm signed legislation aimed at preserving the American dream of home-ownership for Michigan families in jeopardy of losing their homes to foreclosure.  The governor was joined by lenders from the Michigan Credit Union League, the Michigan Bankers Association, and sponsoring legislators from across the state for bill signings in Grand Rapids, Jackson, and Detroit.
 
"These new tools will help protect families from losing their homes and work to stabilize Michigan’s housing market," Granholm said.  "I applaud the leadership of our legislators and our many partners in the lending community, including bankers, credit union lenders, and mortgage lenders, for making these tools a reality." 
 
The bills signed today create two new refinancing options to protect home ownership - an adjustable rate mortgage (ARM) refinancing option that will help citizens get into fixed-rate mortgages and a "rescue" program that helps those who have been behind in their payments in the past, but are current now.  The new tools are part of the "Save the Dream" initiative that makes housing counselors available to homeowners and raises awareness about avoiding foreclosure.  The Save the Dream products and programs are operated and funded entirely by the Michigan State Housing Development Authority (MSHDA).
 
"We believe our Save the Dream program will help curtail the foreclosures happening throughout our Michigan communities," MSHDA Director of Homeownership Mary Townley said. "This new legislation gives us an important tool to add to our existing home-ownership counseling and foreclosure prevention activity.  Putting the counseling together with the ability to refinance home loans for safer, more secure long-term, fixed-rate mortgages offers a sense of real hope to some very desperate homeowners."

 
The new Save the Dream tools are:
 
-  The Adjustable Rate Mortgage (ARM) Refinance Program that will assist homeowners who have an ARM in refinancing to a 30-year,  lower-interest, fixed-rate conventional loan; 
 
-  The Rescue Refinance Program that will assist individuals who have a delinquency on their mortgage and who are at risk of losing their home will have a chance to get into a more affordable 30-year, fixed rate, conventional loan.
 
Both initiatives are targeted at existing homeowners.  To qualify for one of the new loan programs, homeowners must meet the same income and sales price limits that other MSHDA loan products require.  Household income must be under $108,000, and the purchase price of the home cannot exceed $224,500.  The initiatives will be funded by taxable bonds, and homeowners will be responsible for the full value of their refinanced mortgages.  The original mortgage does not have to be a MSHDA loan; however, the homeowner must meet MSHDA requirements for the refinance product.  This qualifying information is available from approved lenders and directly from MSHDA.
 
For more details on the Save the Dream refinance programs and other services, a visit to www.michigan.gov/mshda will take seekers to MSHDA’s home page and the Save the Dream icon where up-to-date information about the loans, services, and MSHDA-approved lenders and certified counselors is available.  There is also a consumer hotline that helps callers find a counselor locally. That toll-free number is 1-866-946-7432.
 
MSHDA is a quasi-state agency that provides financial and technical assistance through public and private partnerships to create and preserve safe and decent affordable housing, engage in community economic development activities, and address homeless issues.  MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues. 
 
 

MSHDA is not a new department of the Michigan government. In fact we have been putting families into homes under MSDA financing for the last few decades. Not all homes will qualify. As an example, if you owe more on your present mortgage than the home can appraise for you may not be able to qualify for this program. Yet there are many ways to work an application package to MSHDA to help the home qualify. This new legislation will also add more flexibility to adjustable rate financing.

Call us at 734-459-2600 or email at leebittinger@remax.net to get a free Bittinger Team report that will help you understand this valuable program.

Have you had experiences with MSHDA? Any other government financing? Your comments below may help someone in need.

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Canton couples keep foreclosure a secret!

March 19th, 2008 Lee Bittinger Posted in Foreclosure and Short Sales, Home Financing 7 Comments »

We kbnow nothing about a foreclosure

 

Facing Foreclosure? Canton and Plymouth homeowners are not telling their partners until it is too late!
Noel and I have access to a special list of all the homes that are about to go into foreclosure in the Detroit, Michigan suburbs. We have contacted hundreds of these pre-foreclosure homeowners in Canton, Plymouth, Northville, Novi and many other surrounding cities and have discovered a disturbing phenomenon.
 
Over 50% of the homeowners we come in contact with either don’t realize they are in foreclosure or are aware of it and their spouse is not, or are aware of it and they don’t realize the severity of their situation.
 
In a majority of the cases one of the foreclosing homeowners hides it from the spouse. Usually, the partner keeping the secret is the person responsible for paying the bills and is (or feels) responsible for causing the problem and fixing it. This partner may feel like a failure for not properly managing the finances or for overspending, or the person may be using the family finances to support an embarrassing and costly habit.
Attempting to sweep the foreclosure under the rug can compound the problem in any or all of the following ways:
·         Makes you more susceptible to becoming a victim of foreclosure rescue scams. One of the con artist’s most powerful strategies is divide and conquer. They will offer ways to avoid foreclosure so your partner “never has to know about it.” They are afraid that the more people “know about it,” the more likely they will get caught.
·         Removes one of your pillars of support. As a couple, you have a much better chance of improving the outcome than by acting alone. Your partner may have some excellent ideas and resources to help save your home.
·         Wastes time. The longer you try to keep the secret without taking positive steps to resolve the problem with your lender, the less time you have to save your home, sell it, or pursue other options.
·         Leads to distrust with your partner, who will eventually find out anyway.
Remember, your partner is going to eventually find out about the foreclosure. It’s always better if your partner finds out earlier from you rather than later from a stranger… like when the sheriff shows up to evict you and your family from your home or the person who purchased the home at auction shows up at the front door.
Communication Is Key
If you and your partner can’t have an honest discussion about household finances and troublesome behaviors, then your entire relationship is already at risk. Look at the foreclosure as an opportunity to become open and honest and build intimacy. Either your relationship will not survive, meaning it was not worth trying to save in the first place, or it will deepen and become more rewarding over time.
Financial Setback + Communication Breakdown = Loss of Home and Equity
What is equity? Equity is the amount of money that you get to keep after you sell your home and pay back the debt you owe on it.
Adding communication back into the equation gives you and your partner a much better chance of addressing the underlying financial shortfall and ultimately saving your home or selling it to cash out enough equity to make a graceful exit.
Whether you’re currently facing foreclosure or have just missed one or two mortgage payments, tell your partner immediately. Losing your home in a vain attempt to avoid an uncomfortable discussion with your partner is the wrong approach.
Avoid the Worst Options
The worst option in foreclosure is to try to sweep the problem under the rug. Well, actually there are three “worst” options:
·         The absolute worst option is to deal with a con artist who’s out to steal your home through some foreclosure scam or strip you of the equity in it.
·         The next worst option is to do nothing. When you do nothing, the lender forecloses, the property is sold, and you’re evicted. You can say “so long” to both the property and any equity you built up in it.
·         Another bad option is choose a solution that puts you right back on the path to future foreclosure. Some people, for example, borrow money to reinstate the loan – that is, bring the payments current with the bank. This is a viable solution if the financial setback was temporary and you will have sufficient income to start making payments on your mortgage and on the money you borrowed to reinstate. However, if you are unable to make the monthly payments, you will probably be better off selling the home and finding more affordable accommodations.
Overcoming Your Fears
If you are afraid of telling your partner, then ask another family member, a close friend, a financial counselor, a marriage counselor, or someone else that you and your partner both feel comfortable talking with and that you both trust to help you break the bad news.
An unbiased third party can act as an intermediary, laying out the facts more rationally, so arguments do not get in the way of a full disclosure. You want to come clean and lay all the facts and figures on the table so you and your partner know what you are dealing with.
Remember, what has happened is in the past. You and your partner can do nothing to fix what has already happened. You can only make things better now and for your future together.
About the Author: Ralph R. Roberts, GRI, CRS and his team of foreclosure experts regularly assist families facing foreclosure and have authored Foreclosure Self-Defense For Dummies (John Wiley & Sons).
 
 
If you find yourself in financial trouble and may be facing foreclosure keep in mind you are not alone. Nor are you in as bad a situation as you may think. You have more options than you think.
Most banks don’t want to take a home back and are willing to work out many arrangements for homeowners in trouble.
 
Keep looking for our series of blogs on short sales coming soon. In the meantime if you have any questions or concerns call us at 734-459-2600.
Remember all your information will be held strictly confidential.
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