Buying Foreclosure Homes You Win By Offering The Homeowner Options

Buying Foreclosure Homes You Win By Offering The Homeowner Options



Buying Foreclosure Homes - You Win by Offering the Homeowner Options
In teaching workshops on how to​ buy foreclosure homes (often listed on a​ foreclosure auctions report), I​ often write on the markerboard in​ big bold letters, Gain They're Trust to​ Close More Deals.
The principle of​ gaining the trust of​ the homeowner threatened with foreclosure is​ a​ deal-maker .​
If they trust you, they are more likely to​ accept your offer .​
Besides that, if​ you have earned their trust by explaining their options to​ them, then if​ they choose to​ let the home go to​ auction where it​ will likely end up on a​ foreclosure auctions report (and you win it) they are much more likely to​ vacate the property without a​ fight.
1 .​
Work with their Current Lender
Forbearance: An agreement between the lender and the borrower that reinstates the delinquent loan because the homeowner will put up an​ initial lump sum of​ the total delinquency and pay the rest over a​ period of​ time.
Loan Modification: a​ change in​ any of​ the terms of​ the original note .​
This includes decreasing the interest rate, re-amortizing the remaining balance, extending the term of​ the note.
2 .​
Work with a​ New Lender
Refinance: Where a​ new lender loan the borrower monies to​ pay off existing debt .​
This option is​ generally open to​ borrowers that face a​ temporary setback in​ their financial situation and can prove that they can afford the new mortgage payment .​
Most financial institutions will not loan to​ people unless they have the above mentioned criteria and at​ least 20% equity in​ the residence.
Junior Mortgage: Where a​ new lender will offer a​ second loan or​ junior lien in​ order to​ make up any back payments, late fees and other charges necessary to​ reinstate the loan .​
Rates are typically 12%-18% and terms are 5 to​ 10 years.
3 .​
File Bankruptcy
Bankruptcy is​ a​ way for people who owe more money than they can pay right now, to​ either work out a​ plan to​ repay the secure creditors over time in​ Chapter 13 filings, or​ wipe out (discharge) most of​ their bill in​ a​ Chapter 7 filing .​
While the debtor is​ working out a​ plan, or​ the trustee is​ gathering the available assets to​ sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor .​
What happens to​ your bills, debts and house will be controlled by the Bankruptcy Code and the Federal Rules of​ Bankruptcy(the owner will NO longer have control over any of​ their assets) .​
Bankruptcy will have a​ serious impact on the credit lives for the next 10 years.
4 .​
Sell Their Home
List with a​ Realtor on the MLS (Multiple Listing Service)- Due to​ the short foreclosure period in​ Texas, listing their home with an​ real estate broker and being able to​ close within 21 days is​ a​ very unrealistic task due to​ the new buyers financing .​
The process of​ lenders approving the buyers credit, appraising the house, completing underwriting, reviewing title, getting a​ new survey, getting payoff demands and drawing documents--can take 3-4 weeks to​ complete (assuming no problems pop up) .​
Just because the property is​ under contract and scheduled to​ close will NOT stop the auction.
Sell to​ an​ Investor- Selling their house to​ an​ investor who offers cash at​ closing; no new loan contingencies; no repairs to​ be made (AS IS); fast escrow; a​ for sure sale providing a​ fresh start with reputation and integrity intact would be their best option .​
Although the investor's price is​ less, the investor can salvage the seller's credit, bring loans current, rebuild seller's credit by paying the sellers debt on time every month .​
This is​ a​ much BETTER solution than doing nothing and losing everything at​ the foreclosure auction.
5.Giving Up and Letting it​ Go:
Deed-in-Lieu: Borrower voluntary conveys the title (property) back to​ lender in​ lieu of​ the lender foreclosing .​
Most lenders would rather go through with the auction and clean title by extinguishing inferior liens.
Let it​ Go to​ Auction: Obviously, nothing good can come from this, the owner loses their home with no money, credit problems, hard to​ find new housing due to​ past history and the lender can sue for any deficiency.




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