Buying Back Your Repossessed Homes

It is very common for people to buy back their repossessed homes after they have gone to auction. This actually makes a lot more sense for some people than coming up with the money to save their home. There are many reasons for this.

Houses that are about to be repossessed homes are almost impossible to save financially. A bank will have attached hundreds of dollars in fees and many months of mortgage payments. When a homeowner wants to save their home they have to come up with all of the money in full if they want to keep it but sometimes banks still won’t work with you. This can be a waste of money trying if the bank takes your money and still forecloses. Also, if you have an extremely high payment then your payments and the balance of the loan are still going to remain the same.

Repossessed homes never sell for the cost of the previous homeowner’s debt. Most banks are willing to take less than 80% for the home. Some banks have so many houses and if the home is totally upside down they may even be willing to take as low as 50%. What you can do is purchase your home back from the bank at the negotiated rate of another buyer. This will allow you to own your home for the low price of what you negotiate in the new loan.

When your home is under foreclosure you have plenty of time to save up a very large chunk of money for a down payment on a house. Some borrowers have up to a year of free rent on their repossessed homes before the house even goes to the auction. All you need is 5% - 10% of a down payment on a home to get a loan. This is more than enough time to get a down payment together to buy back your home.

One thing to keep in mind is that some lenders are capable of attaching the difference of your foreclosure onto your home as a lien. When you buy back your home it is usually best to do it in your spouse’s name. Never buy a home in both of your names. Purchase the home in your name and if you foreclose then you can buy the home back in your spouse’s name for half the price. This really works and can save you a lot of money on a home and give you instant equity.

By :  Julie Thompson

Bank Owned Homes Sale Still a Hot Market in Bay Area

Luxury homes are starting to sell in San Francisco Bay Area, California. The area’s real estate market, which was once dominated by bank owned homes sales, is seeing its median price increased by 12.3 percent last month from the previous month.

Industry experts believed that the slow pace of property sales on a year-to-date basis was a reflection that sales in May included luxury homes.

However, real estate specialists pointed out that the struggling housing market devastated by large volume of bank owned homes sales is in the worst condition this year compared with the previous year. This means that there is no guarantee that median prices of homes will continue to rise.

Real estate specialists also believed that while bank owned homes sales accounted for only a small portion of the current real estate market, the expected second wave of foreclosures in the coming months due to resetting of mortgages and rising unemployment, will place repossessed homes again in the forefront of the market.

Market data showed that last month’s median price rose to $341,500 from $304,000 the previous month. However, the median price was 33.9 percent lower from the May 2008 price of $517,000.

Also in May, foreclosure properties accounted for 42.1 percent of the total existing homes sales, representing a 46.4 percent decline in April. The decline was the lowest since the September 2008 drop of 41.6 percent.

The April to May median price increase was partly attributed to the availability of jumbo mortgage loans that were more than $417,000.

The increase availability of jumbo financing has benefited some areas in the region, particularly in Contra Costa County where the median home price rose to $234,500 in May from $225,000 in April. The positive impact of jumbo financing was felt in the housing market of Walnut Creek, Orinda, San Ramon and Alamo.

On the other hand, the median home price in Alameda County varies among communities, with some rising to $330,000 from $289,000 while prices in the Alameda city decline from $581,000 in April to $550,000 in May.

The April to May median home price increase in the Bay Area marked the second consecutive month that prices increased in the housing market once dominated by bank owned homes sales.

By :  John Cutts

Four Ways to Avoid Foreclosure

Along with the economy and the financial sectors, the housing market is in a free fall and home mortgage lenders are tightening the purse strings. In the foreseeable future and recent past, experts estimate nearly three to four million people (1) will be unable to avoid foreclosure and will lose or have lost their homes due to the current recession. These are alarming numbers, especially when coupled with the fact that this statistic is projected to pass the number of homeowners who lost their properties during the Great Depression.

But is foreclosure always necessary? Could today's homeowners, if prepared with the right kind of knowledge, avoid foreclosure? The answer is a resounding yes - in many cases, homeowners with a little foresight can work with their home mortgage lenders and often avoid foreclosure or stop it from occurring in the first place.

Work with Your Home Mortgage Lenders

Whether you're struggling or you know someone who is, there are alternate means to avoid foreclosure. Begin by speaking with your lender to see what he can do for your particular situation. In most cases, home mortgage lenders and/or lending institutions can work with you to get better rates or help you make your payments in a timely fashion.

Below are four services that home mortgage lenders and institutions routinely offer to their clients. And with a little anticipation, you can avoid foreclosure and prevent it from happening in the future by being more informed and armed with some tricks of the trade!

1. Refinance - This is one of the most common activities to avoid foreclosure in the mortgage industry in which the homeowner tries to decrease his interest rate by paying off the actual balance on the mortgage. This is possible by creating a new mortgage with a different lender for a lower interest rate, with the possibility of paying off the actual mortgage and consolidating other debt such as credit cards, auto loans, student loans, or home equity loans) in order to make just one monthly payment.

2. Loan Modification - Generally offered by home mortgage lenders or even the homeowner's financial institution, loan modification is made to either the rate or the balance of the mortgage. This happens when home mortgage lenders change the interest rate or the balance on the mortgage in order to decrease the amount of the monthly payment. This is one of the simplest processes to reduce monthly payments and avoid foreclosure because it's done by the current lender, meaning the paperwork is minimal and there are no closing costs, which is ideal in those situations.

3. Repayment Plan - This service is only offered by home mortgage lenders to homeowners who are delinquent on their monthly payments. With this process, home mortgage lenders will add a portion of the past due balance on the mortgage to the monthly payment in order to pay off that late balance in a shorter period of time without paying extra interest. This option is generally offered to borrowing homeowners who have experienced a significant loss of income (or an increase in living expenses), but still have enough monthly income to correct the delinquency and re-instate the loan. Repayment of the loan must occur within the duration of a scheduled monthly plan, which can be achieved either through gradual repayment of the delinquent amount or through both repayment and loan modification.

4. Short Sale - With this process, home mortgage lenders and homeowners agree on selling the house for less than the balance on the mortgage in order to pay off the debt and avoid foreclosure. These circumstances are usually related to the current real estate market and the borrower's financial situation. A short sale is typically executed to avoid foreclosure and prevent subsequent damage from appearing on the customer's credit score for years into the future.

Have a Plan in Place

Take your future into your own hands! Oftentimes, simply knowing the steps of how to avoid foreclosure can be successful in preventing a problematic state of affairs from escalating by making efforts well in advance to remit or resume payments. This is a sticky situation you want to avoid at all costs - a foreclosure remains on your credit report years down the road and can significantly harm your credit score to the point where it may be difficult to purchase a house ever again.

Your lending institution wants to help you avoid foreclosure, keep your home, and for you to stay in it. Be proactive and, above all, be armed with the necessary knowledge to save your home and property!

By : Neil Terc