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Foreclosures with Equity Post Forbearance
Dated: August 17 2022
Views: 59
Pre-foreclosure Homes with Equity
One of the most untold stories of the post-COVID housing market - the majority of homes in pre-foreclosure have equity!
However, homeowners are stuck in a Catch-22. They can't refinance or do a HELOC due to forbearance restrictions. It's like "golden handcuffs" as the equity isn't liquidity available for them to be able to come current on the loan.
- Related article; Foreclosure Tragedy of 2022 - 2008 Equity Crisis vs 2022 Economic Crisis
- The Truth about Short Sales
"What Can I do?"
Homeowners facing foreclosure are getting a lot of bad information and aggressive sales proposals. I have a network of professionals who are dedicated to helping homeowners at risk of foreclosure find the best outcome possible!
- First priority - save your home! If you want to stay in your home, we will connect you with our licensed HUD counselor who can expedite your loan modification at no charge. Many attorneys, and service providers will ask for a fee to do this. It should be free to you!
- Liens - we'll need to pull title right away, as well as have the payoff quote requested by your HUD counselor. The last statement you've received won't be the payoff. We need to find out if there is enough equity to arrange a private sale salvaging your equity before auction if the modification isn't approved.
- Short Sale - if there isn't enough equity, and the loan modification isn't approved, a short sale can be your best solution. We have a strong team, with proven success records going back to 2007. Short sales do work! We want you to avoid foreclosure - it has a long term devastating impact.
We understand that you don't want to sell your home! We want you to stay there if at all possible as well. Many of the real estate professionals in my network have personally faced similar situations, or have family members who've been through a devastating fight with the banks. Our passion is to find the best possible outcome for you and your family.
Although we understand you don't want to sell your home, in reality it is already for sale by the lien holder. You're just not in control of the process, but you can be! There are a variety of options for you and we'll customize a strategy to meet your needs. Related articles;
Dangers for homeowners at risk of foreclosure
There are a lot of aggressive sales efforts targeting home owners who have received a foreclosure filing;
- Subject 2 Proposals - there are people selling books and coaching on how to approach homeowners in default with the following proposal. In basic terms they offer a lump sum to bring the loan current, put cash in your hands along with transferring the deed to their name.
Yes, it can sound attractive in that you get to "walk away" from the situation. But do you? As long as the note is in your name, you can face foreclosure again if the new "owners" stop paying your mortgage payments. You'll face another foreclosure, but with no property! That leaves bankruptcy as your only option.
In addition, Freddie Mac and Fannie Mae are already proposing legislation to make this illegal. Once that passes, you could be exposed to liabilities and fines because you received money for the Subject 2 offer.
- Wholesaling - many "I'll buy your house for cash" proposals are actually wholesalers. Currently, there are no licenses required for wholesaling. Anyone can do this, which is what makes it attractive to people looking to get into real estate profits who don't have any professional training. A wholesale offer is basically what we used to call an A-B-C transaction. The homeowner "A" agrees to a contract with the wholesaler "B" who includes assignment language and turns around selling it to buyer "C" prior to closing. The actual sales it really A to C, with the wholesaler being the middle man.
Why do you need to know? Wholesaling short sales is a Federal crime. Yes, Federal! It's considered mortgage fraud and many people have ended up with jail time in addition to hefty fines. Wholesaling short sales was a hot trend during the mortgage crisis. The Federal cases were pursued later. Just because you CAN do something, or someone you know IS DOING something, doesn't mean you aren't exposed to potential jail time and fines.
If you've received a foreclosure notice and there's enough equity to pay it off prior to auction, a wholesale agreement is not mortgage fraud. It's when there's a short sale involved. Meaning the market doesn't support a sale price sufficient to pay off the mortgage in full (short the balance due). By law, any available funds must go towards the lien obligations filed against the property first, not the wholesaler. A seller in a short sale doesn't have to pay anything to sell their home, and they aren't allowed to receive any funds either. Some unscrupulous buyers try to offer funds "under the table" which is again, mortgage fraud.
In short sale negotiations, we attempt to secure some "cash for keys" as a concession if possible. Although the "cash in hand" proposals from Subject 2 and Wholesaling offers may feel attractive, they put you at legal risk. Working with homeowners at risk of foreclosure, we always are focused on the best solution for your unique situation, protecting you both in the short term and long term from further financial or legal damages.
Homeowner and Landlord Options
- FightTheBank.org - Options to stop foreclosure, save your equity and your credit
- The Foreclosure Process and Laws in Pennsylvania- Nolo
- Legal Issues When Your Rental Property is in Foreclosure - Nolo
Short Sale Success Stories
“Susanna is one in a million in her field! In addition to her knowledge, her professionalism and ethics are of the highest caliber. I have been a real estate developer for over 35 years and found my self in a short sale situation. I have never been in this situation before but Susanna was able to get the lender to forgive a part of this loan. She is cool, calm, confident and very thorough. I would highly recommend her for any real estate transaction.”
– R.K, Seller, Queen Village Luxury Short Sale
Positive solutions for a difficult situation
"Susanna was very compassionate and understanding of my situation. I couldn't imagine getting through this without her! Her knowledge of short sales is unsurpassable and anyone who uses Susanna for this type of sale would be very lucky!"
- Bryn Mawr Senior Citizen
Reverse Mortgage Short Sale Success
For information about options to avoid foreclosure, anywhere in the country, click here for a confidential consultation. We're here to help!
Susanna Kunkel, Realtor
Certified Distressed Property Expert (CDPE)
eXp Realty, LLC
(484) 416-0567
#fightthebank #asksusanna
Susanna Kunkel
Susanna provides executive level service to all her clients based on her years in corporate CEO offices. Creative marketing, global networking and local expertise. Her unique mix of business savvy and....
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