In today's economy, many people are facing hard times, losing their jobs, homes, memories and self-confidence. One of the hardest things to do nowadays is to keep the home they've made their family history in. Letting go is a hard to do.
There are many avenues in which a bank, having a security in the property that people own, through their mortgage, is to either foreclose on the property through a trustee's sale, get a property back in lieu of foreclosure or a short-sale.
It is to the best interest of banks to try to keep the loan they have now with their current clients, as it is more expensive for the bank to foreclose or short-sale a property. This is, of course if the mortgagor (property owner) qualifies to get a loan modification and also get a 2nd chance in keeping the home.
What most people fail to realize, is that, a loan modification is geared for those, who are able to make payments on the modified plan, based on the current value of their home. Some restrictions to apply, so the bank holding your mortgage should be consulted before you take drastic measures.
One of the more better options for a home-owner in distress is to talk to a financial counselor in the hopes of deciding what is best for them. A HUD approved housing counselor can do just that. The number is 888-995-HOPE.
The other, better alternative to foreclosure is a short-sale, which allows a borrower to sell the property, despite current market values and loan amounts. A short sale gives the seller an opportunity to eliminate mortgage debt, and get a fresh start. Some restrictions apply, after all, the banks have to evaluate the amount of loss they have to take, and whether a borrower qualifies. A seller/borrower will in most cases, be able to close escrow without any further out-of-pocket expense. Additionally, the bank may give compensation to homeowners for moving expenses.
Fore more information on whether a short-sale is an option for you, call Nelli Derderian at (818)414-0513 for a FREE consultation.
Monday, February 7, 2011
Saturday, February 5, 2011
Buyer's dilemma...
With the current market, buyers are challenged with making decisions on the kind of property to purchase. More important than that is the type of sale the property is being marketed.
Whether it's a short-sale or a bank-owned, buyers need to be aware of short falls of each kind of transaction. While these types of sales usually give buyers a great opportunity to get a "good deal", they both present challenges.
Short-sales, also known as pre-foreclosure, pre-auction, NOD (notice of default), are properties that are being sold short of what they are owed to the bank. In other words, if there is a loan on the property of $500,000, and the property is being sold at $400,000, the bank is going to be paid less that what they are owed (in this case $100,000). When a bank takes a loss such as this one, they usually take their time in analyzing the loss, they order appraisals, broker price opinions, and weigh their pros and cons in making a decision to allow a seller to sell their property as a short-sale. Short-sale properties are somewhat priced competitively due to timing issues (bank may foreclose while property is being marketed for sale.)
With a short sale, since a private entity is selling the property, all aspects of a sale mimic that of a standard sale, i.e. disclosures, seller's history with the property, etc. The buyer usually will get more information on the property, hence make a more sound decision on the condition and potential of the property.
Bank-owned properties, also known as REOs (Real Estate Owned), are properties that the bank obtained through a foreclosure (or a trustee sale in California), and is now marketing the property for sale usually at market value (or sometimes less than market to be more attractive), and also give buyers a good opportunity to get a "good deal", but pose a great issue to buyers. Since the bank is selling the property and since it's never lived on the property, the bank is exempt from most disclosures, failing to give buyers a full picture on the history of the property, which a private seller is legally obligated to disclose.
Disclosures include: neighbor issues, property history, faulty systems, repairs and so on.
To get more information about these and other topics, call Nelli Derderian @ 818-414-0513.
Whether it's a short-sale or a bank-owned, buyers need to be aware of short falls of each kind of transaction. While these types of sales usually give buyers a great opportunity to get a "good deal", they both present challenges.
Short-sales, also known as pre-foreclosure, pre-auction, NOD (notice of default), are properties that are being sold short of what they are owed to the bank. In other words, if there is a loan on the property of $500,000, and the property is being sold at $400,000, the bank is going to be paid less that what they are owed (in this case $100,000). When a bank takes a loss such as this one, they usually take their time in analyzing the loss, they order appraisals, broker price opinions, and weigh their pros and cons in making a decision to allow a seller to sell their property as a short-sale. Short-sale properties are somewhat priced competitively due to timing issues (bank may foreclose while property is being marketed for sale.)
With a short sale, since a private entity is selling the property, all aspects of a sale mimic that of a standard sale, i.e. disclosures, seller's history with the property, etc. The buyer usually will get more information on the property, hence make a more sound decision on the condition and potential of the property.
Bank-owned properties, also known as REOs (Real Estate Owned), are properties that the bank obtained through a foreclosure (or a trustee sale in California), and is now marketing the property for sale usually at market value (or sometimes less than market to be more attractive), and also give buyers a good opportunity to get a "good deal", but pose a great issue to buyers. Since the bank is selling the property and since it's never lived on the property, the bank is exempt from most disclosures, failing to give buyers a full picture on the history of the property, which a private seller is legally obligated to disclose.
Disclosures include: neighbor issues, property history, faulty systems, repairs and so on.
To get more information about these and other topics, call Nelli Derderian @ 818-414-0513.
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