Tips to Avoid Foreclosure

May 1, 2009, 4:12 pm

Behind on your mortgage? Frightened of foreclosure? Embarrassed? Well, before you do anything irrevocable like drowning yourself you should consider a “short sale”. There is hope! Keep reading.

The most important first step is to find a realtor/agent that has expertise in short sales. Less than 1% of realtors are trained and experienced in this field of Loss Mitigation.

Ask any prospective agent if they are qualified to do short sales and how many short sales they have successfully completed.

Then hire the expert realtor to work with your lender. You pay him nothing. He earns his commission from the lender at closing. (just like a regular home sale closing) He will lead you through an application process to be submitted to the lender to determine if you qualify. And guess what? To qualify you must be behind on your mortgage payment for 2 or more months. And, there are additional qualifications that must be met. The process can take a few months prior to an agreed upon listing price.

Understand that banks do not want or like to do foreclosures. In today’s market most lenders would prefer to do short sales than foreclosures because foreclosure hurt them financially. So, the fundamental motivation for the lender and the homeowner are the same. Minimize losses and avoid foreclosure. And, you can move out without destroying your credit rating once the short sale is closed and make a clean start.

For several different reasons less than 50% of short sales succeed. However, on the ones that do succeed, the lender pays your closing costs and forgives the unpaid mortgage balance.( verses a foreclosure which still holds you responsible for the balance )

PROSPER STATS FOR OCTOBER

Another slow month for home sales ( 22 ). YTD sales are 298 up about 12% over 2007.

Average home prices YTD are up 7.5% at $316,307 vs. $294,104 for 2007. (entirely due to new more expensive homes going on the market.

Days on market (DOM ) for October sales were better at 129 vs. 166 YTD.

There are 233 homes for sale in October vs. 346 last October.

MORTGAGE RATES

Good news!

As of November 11, the rate 30 year fixed with no point origination is 5.875% and 5.625% with a one point origination fee.

A 15 year fixed rate with no point origination is 5.5% and 5.25% with a one point origination fee.

THINKING OF LISTING YOUR HOME FOR SALE?

With all the bad economic news on Wall St. and Main St. coupled with the upcoming holidays, I am telling my clients to wait until January or February to list. Why add to DOM (days on market ) during the next 6 weeks when home buying activity will be slow. Remember, home listings get their surge of lookers soon after the listing. Usually the first or second offer is the best( I have no clue as to why).

Lastly, for homes to sell quickly in these very competitive market conditions, do not make the all too often fatal mistake of starting out with a high listing price and then dropping it later because of no offers. List it at a competitive price or a little below if you are serious about getting it sold. Almost all buyers today are savvy and know they can pretty much get great bargain.

Have a wonderful Thanksgiving!

Bill Remington is a seasoned realtor in the North Dallas suburbs. Presently, President of Prosper Chamber of Commerce. Key markets are Plano,Frisco,McKinney and Prosper. Espert in short sales, REOs and foreclosures. www.billremington.com
Magnetic Door Locks