Archives For Foreclosures

To protect homeowners in financial difficulty from losing their homes to foreclosure rescue scams, the Florida legislature enacted the Foreclosure Rescue Fraud Prevention Act. This law imposes tight restrictions on anyone offering services purporting to help you save your residential property from foreclosure.

(To learn more about foreclosure procedures in Florida, visit our Florida Foreclosure Law Center.)

What Is Foreclosure Rescue?

Foreclosure rescue services include any goods or services related to, or promising to assist you, with:

  • stopping, avoiding, or delaying foreclosure proceedings on residential real property, or
  • curing, or otherwise dealing with a default or failure to timely pay a residential real property mortgage obligation.

A foreclosure rescue transaction includes any transaction:

  • where you transfer your ownership interest in residential real property in foreclosure to a third party while retaining an interest in the property, such as a lease-option, an option to repurchase the property, or an interest as a beneficiary or a trustee under a land trust, and
  • which is designed or intended to stop, avoid or delay foreclosure proceedings.

Not included. A foreclosure rescue transaction does not include transfers resulting from:

  • certificates of title issued after a foreclosure sale
  • sales authorized by state statute
  • judicial sales or court orders
  • transactions between family members, or
  • agreements between you and a foreclosing lender.

In recent years, foreclosure rescue scams have flourished. To learn more about common foreclosure rescue scams, and how to avoid them, visit out Foreclosure Rescue Scams topic area.

People and Businesses That Must Comply With the Law

The law applies to any person or business that solicits, represents, or offers to provide you with foreclosure rescue services or engage in a foreclosure rescue transaction in Florida in exchange for money or other valuable consideration, unless they are specifically excluded under the law.

Not included. The following persons and businesses are excluded from coverage under the Florida Foreclosure Rescue Fraud Prevention Act:

  • anyone acting with written approval or express authority of the U. S. Department of Housing and Urban Development (HUD) or federal or state agencies
  • non-profit organizations offering counseling, provided that they do not contract with a for-profit lender or person engaging in foreclosure rescue transactions
  • lienholders negotiating a resolution of a foreclosure provided they did not obtain their lien as a result of a foreclosure rescue transaction
  • licensed mortgage brokers or lenders providing advice in connection with a mortgage transaction without payment other than a loan origination fee
  • Florida licensed attorneys representing you as a client
  • financial institutions governed by other state laws and their parent and subsidiary corporations
  • licensed real estate professionals engaging in conventional sales, leasing, renting and appraisal transactions, and
  • licensed persons or entities engaged in insurance and banking services regulated by the Florida Department of Financial Services, federal banking authorities, the Florida Financial Services Commission and the Florida Public Service Commission.

Who Is Protected?

The law protects you if you own residential real property from a one family home up to a four-family dwelling. This includes single family homes, townhouses, condominiums, duplexes, triplexes, and fourplexes.

Written Agreement Required

Agreements for foreclosure rescue services must be in writing and signed by both parties. The agreement must include:

  • the name and address of the person providing the service
  • the exact nature and specific detail of the service to be provided
  • the total amount to be paid for the services and the payment terms
  • the date of the agreement (which cannot be prior to the date the agreement is signed)
  • notice of your right to cancel, the prohibition on fee collection prior to full performance of all services, the instructions for cancelling and a recommendation that you contact your lender or mortgage servicer to attempt to negotiate a resolution before you sign the foreclosure rescue contract
  • the name address and telephone number of the purchaser of your property under the foreclosure rescue plan
  • the street address and full legal description of your property
  • clear and conspicuous disclosure of any financial obligations that the purchaser will be assuming
  • the total amount that the purchaser will be paying to acquire the property, including any amounts to be paid to your lender or third parties
  • the terms of the payment by the purchaser and a description of the services that will be provided to you before and after the sale of the property
  • the date and time of the transfer, and
  • a statement in at least 12-point uppercase type above the signature line whereby you acknowledge that you understand that you are selling your home to the other party.

You must be provided with an exact copy of the fully executed (signed by both parties) contract within three hours of the time you signed it.

Your Right to Cancel

You have the right to cancel an agreement for foreclosure rescue services without penalty or obligation within three business days from the date you signed the agreement. The right to cancel cannot be waived or limited in any way and, if you cancel, any money you paid must be refunded to you within ten business days of the receipt of the cancellation.

Reasonable Repurchase Price and Your Ability to Repurchase

If the agreement gives you the right to repurchase the property, the repurchase price must be reasonable and the purchaser must verify and demonstrate that you have the reasonable ability to make any required payments and pay the repurchase price.

Generally, this means the purchaser will need to show that your monthly payments for housing expenses and other debt do not exceed 60% of your monthly income before taxes, and that the repurchase price is not more than the amount the purchaser paid to acquire and maintain the property plus seventeen percent per year.

Your Right to Reinstate After Default

If you default under the foreclosure rescue agreement, you have thirty days to cure the default and reinstate the agreement, and you can exercise this right up to three times during the term of the agreement.

Purchaser Must Assume or Discharge Liens

At the sale, the purchaser is required by law to assume or satisfy (pay) the lien that is the subject of the foreclosure as well as any other liens that would not be extinguished by the foreclosure.

No Fee Until All Services Are Performed

Under the law, you cannot be charged a fee, nor can the foreclosure rescuer solicit, receive, attempt to collect or secure payment in any way before completing or performing all services set forth in the written agreement.

Penalties

Any violation of the Foreclosure Rescue Fraud Prevention Act is an unfair and deceptive trade practice under Florida law. Violators are subject to penalties and remedies including a monetary penalty of up to $15,000 per violation.

The Reality of Foreclosure Investing

by Rodney Brooks

The reality of foreclosure investing is very different from what people have been led to believe through late night infomercials and the hundreds of books written on the subject. Always remember these two key facts when dealing in foreclosures.

• Every active foreclosure investor works a lot more than people working 9-5 jobs.

• Serious foreclosure investors either have large sums of money of their own or have another investor backing them up.

Finding a solid foreclosure property to purchase is not a matter of choosing what you want, it is a matter of finding something that works economically, keeping track of it, researching it, and then beating out all the other investors who are interested in it.

People treating this business seriously invest a lot of time and energy into finding and following leads.

So, is it possible to make money in this business?

Absolutely, but you must know your strengths and weaknesses.

One of the major problems most beginning investors have, is knowing the market value of a property they are interested in. Experienced investors will have their properties valued to within a 3% variance all the time. All decisions regarding a property are based on the price it will receive. In other words Know The Market Value. Experienced foreclosure investors will use The Multiple Listing Service, Title Companies and their own experience to arrive at that value.

The second problem is the law. You don’t want to run into legal issues because you’ve structured a deal that is illegal in your state. States do have laws regarding what you can and cannot do with owners who are defaulting on their home loans. So again, do your research.

The third problem is the problem of money. If you’ve got a good amount to back your purchases, that’s great. But even if you don’t, it is still possible to do the deals. However, you do need enough to be able to find properties, keep track of them and cover your on going expenses.

The fourth problem is that of knowledge. Federal tax liens, partial interests, leased land, incorrect property information, unpaid property taxes and wrong common descriptions are all things that hurt investors. If you don’t know how to check for these things, you should not be investing in foreclosures.

If you don’t know how to follow up on real property information, you need to spend some time acquiring the knowledge necessary to complete these tasks. Take a course, read, make contacts and talk to people involved in the business. You can easily find them at local Trustee or Sheriff’s sales.

Successful Creative Real Estate Financing, as in life, depends not on what happens, but on what you do. The key to your future is what you do with what you have, because life gets better not by chance but by change. It only gets better for you, when you get better.

Many people are impressed with the many creative ways there are to make money in real estate, but don’t have any money to get started. It really is simpler than you might think. Notice, that I said simpler, not easier. Ideas don’t work unless you do.

Learn one creative financing formula very, very well and keep using it. “Do what you do best.” Find one formula that you understand, are comfortable with and like to work with. Get good at it. Then, get better. Remember this: “perfect practice makes perfect.” When you have one success, reinforce it with another. When you miss, analyze and correct your mistake and do better the next time. Keep refining your formula until no one else can implement it as well as you do. Success is no accident: it takes commitment.

“If you think you can win, you can win.” – William Hazlitt

If you’re serious about becoming financially independent using Creative Real Estate Financing techniques, Check out some of my personal product endorsements and recommendations.

Explore posts in the same categories: real estate, Foreclosures, Real Estate News, buying houses, Real Estate Investing, buying property, foreclosure investing, foreclosure loans, real estate financing, creative real estate financing, no money down, buyingproperty with no money down, no money down financing, buying property with no money down, buying foreclosures

Foreclosures up dramatically in SD, Riverside counties By: PATRICK WRIGHT and ANN PERRY – Staff writers Foreclosure activity has shown a dramatic increase in San Diego and Riverside counties, far outpacing most of California and the rest of the nation, according to a foreclosure tracking firm, RealtyTrac.

The large disparity is probably because of the cooling real estate market in what is one of the most expensive regions of the country, according to one local economist. San Diego County had 4,069 properties in some stage of foreclosure for the quarter that ended in September, compared with 970 properties for the same quarter in 2005, an increase of 319 percent. Riverside had 4,403 such properties for the most recent quarter, versus 1,297 for the same quarter in 2005, an increase of 239 percent. RealtyTrac, an online real estate site (www.realtytrac.com) records the number of homes that have entered some stage of foreclosure: defaults, auctions and real estate owned properties (those that have been foreclosed upon and repurchased by a bank).

A property is in default when the owner has failed to make mortgage payments, a step leading to foreclosure. Both San Diego and Riverside counties showed much higher rates of increase of properties in a stage of foreclosure than both the state and the nation. From the third quarter of 2005 to the third quarter of 2006, the rate of increase was 104 percent in California and 25 percent for the entire country. Alan Gin, professor of economics at the University of San Diego, said Thursday he was not surprised by the sharp increase in foreclosure activity in the county. He blamed the trend on the region’s high cost of housing. “The housing prices are so much higher here that people got stretched getting into a home,” Gin said. “If you got into a $600,000 home in San Diego, you’re much more likely to default than someone in a $200,000 home in Dallas.”

While regional home prices are among the country’s highest, wages have not kept pace, Gin said. “People here had to devote a larger percentage of income to housing payments,” he said. “Therefore, they are more stressed and more likely to default.” Gin, who is affiliated with USD’s Burnham-Moores Center for Real Estate, said the slowing real estate market is likely to generate foreclosure activity because homeowners can’t sell or refinance as easily as they could in the early 2000s.

“In the past, when people ran into trouble, they just sold their homes in a hot market,” Gin said. “Now it is much more difficult to do that.” He cautioned, however, that the rate of increase in troubled properties could appear dramatic because foreclosure activity has probably been low in recent years. For the month of September, the ratio of troubled properties in San Diego County was one in 401 households, while in Riverside County it was one in 133 households —- the most dire rate in California, according to RealtyTrac. The increases come during a cooling housing market in both counties, after a significant run-up in prices in recent years. In North San Diego County, prices for single-family homes failed to increase in August and September of this year, while home sales fell 34 percent last month compared with September 2005, according to the North San Diego County Association of Realtors. Mark Fabela, a local Realtor and director-elect for the board of the North San Diego County Association of Realtors, said the foreclosure increases were because of dropping housing prices.

When housing prices decline, some people can’t refinance their way out of high mortgages. “People actually overextended themselves,” Fabela said. “They get to the point where they can’t make the payments.”

Contact staff writer Patrick Wright at (760) 739-6675 or pwright@nctimes.com.

Forbearance –  A postponement of loan payments, granted by a lender or creditor, for a temporary period of time. This is done to give the borrower time to make up for overdue payments.

 Notes:

Basically, forbearance allows the borrower to put a temporary hold on his or her monthly payments, usually for up to one year. Forbearance is common for unemployed people with outstanding student loans.See also: Bankruptcy, Credit, Creditor, Credit Rating, Credit Risk, Impaired Credit Sources=Sources | 131072
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Foreclosure

Brian’s note:

This is a story of someone who did some fradulent mortgage applications, and is publicizing his sorrows to the world.

I think he should stop blogging about it and get a paying job.

What do you think?

Brian Gibbons, www.REISkills.com

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A would-be real estate mogul follows boom tips straight to bust

By Carol Lloyd, Special to SF Gate
Friday, October 6, 2006
In politics, journalism and other image-conscious businesses, insiders know full well how to “craft a deal” in Congress or “frame a story” for the front page, but an uninitiated public often can’t tell where the truth ends and the spin begins. Real estate, also a world where appearances often trump content, operates according to a similar couching of reality. “Putting together” a loan package, for instance, or “writing up” an offer or “leveraging” your investment — all these practices have their customary manipulations that many insiders give the nod to — even when the practices are illegal, unethical or sometimes just stupid. So when some loudmouth neophyte comes along with the sordid blow-by-blow of his real estate dealings — from the “get real estate quick” seminars to the credit card-funded down payments, the stated income loans (a.k.a. “liar loans”) to the over-leveraged portfolio, all collapsing in multiple foreclosures — it’s a confession worth listening to.

Welcome to the world according to Casey Serin, a 24-year-old real estate investor and author of the self-flagellating blog Iamfacingforeclosure.com. If Robert Kiyosaki was the pin-up patriarch for the real estate boom, Casey must be the poster child for its fall. “I’ve always been entrepreneurial,” he said. “I’ve had a business ever since we moved to the U.S.” Serin, whose family emigrated from Uzbekistan to Sacramento when he was 12, exhibits the untarnished faith in American capitalism characteristic of some immigrants. When still a teenager he marketed his abilities as a Web designer, but over the years he chose real estate as his path to higher income.

After spending a year and upward of $15,000 (borrowed on credit cards) going to real estate seminars and buying home education courses from everyone from Russ Whitney to Bruce Norris and, of course, the aforementioned Robert “Rich Dad, Poor Dad” Kiyosaki, Serin embarked on his brilliant career as a real estate flopper, er, flipper. “I wanted to move toward financial independence,” he told me by phone from his home in Sacramento, referring to “passive income,” a key tenet of the “Rich Dad, Poor Dad” scriptures (“Don’t work for money, allow money to work for you”).

Taking a page from the no-money-down gurus he had already ruined his credit scores learning from, he didn’t let the fact that he was under-employed with no financial assets slow him down. He bought one house at a discount and sold it for a profit of $30,000, which he used to wipe out his credit card debt and bring up his credit scores.

The next house purchase wasn’t quite so lucrative — it had a negative cash flow, but this didn’t dissuade him. In fact, the negative cash flow only convinced Serin to think he needed more investments “to keep me busy with profit in the pipeline.” In January 2005, he took a three-week leave from his job to get “enough deals in contract” so that he could give his employer two weeks’ notice. All proceeded according to plan. He quit his job and in the next four months he acquired six more properties. All in all, his portfolio included eight single-family homes, including two houses in Sacramento and one in Modesto, a seven-bedroom fixer-upper in Highland, Utah, a model home in Rio Rancho, N.M. and five-bedroom, four-bathroom ranch house in Dallas, Texas.

But (surprise, surprise) the profit didn’t appear in the pipeline as planned. “I didn’t manage my cash flow and the market changed on me,” he told me. “I guess I didn’t have enough exit strategies. ” He managed to fix up two of the properties and sell them before the market slammed to a halt, but he found himself holding six houses with over $2.2 million in debt in a fast-declining market. Young, computer savvy, with the sense of full-disclosure masochism typical of our age, Serin didn’t cut his losses, file for bankruptcy and get a job.

He started a blog. What does Serin tell us about his situation? Basically everything. The ins and outs of his deals, how much he paid, what went wrong and how he is now going begging to the banks for approval to do a short sale (to avoid foreclosure by selling the houses at less than the amount of the debt). He expresses worry about whether he will go to jail for mortgage fraud and posts the distress letters he’s written to his lenders.

He even explains his strategies for avoiding creditors’ nagging phone calls. What Serin reveals about himself is that he’s a sucker for every real estate myth that the industry has been feeding us for the past 10 years: that the market will always go up, that if you buy at a discount you’re safe from financial risk, that gurus are doling out useful advice for the beginning real estate investor — and that if you make enough deals, you’re sure to come out ahead.

But he also exemplifies the way in which real estate has become a spin factory of hedging and hype. Serin bought eight houses in eight months in four states with no money down. How, pray tell, did he do this? By his own admission, he applied for and got no-money-down, stated-income loans by inflating his income, sometimes getting primary residence loan rates by claiming he would live in the houses himself.

The offers, he said, often had “cash back” clauses, in which he would get money back from the seller after closing, which the bank didn’t know about. (This means that a bank, thinking that the sale price was higher, was actually financing not 100 percent of the loan but, say, 110 percent.) Is it illegal, wrong and dunderheaded? You bet. Is it anomalous? Far from it.

His experience as a 23-year-old novice with no assets going out and getting not one but eight home loans in four different states shows just how eager the insiders have become to look the other way when things look fishy. Mortgage brokers are happily packaging applications filled with bogus information. Bank officers are allowing lending guidelines to become as flaccid as wet noodles.

Too many real estate agents are willing to do anything to close a deal, and too many appraisers will pony up the numbers expected of them. Most pressingly, the use of liar loans — once a tool for seasoned investors with high credit scores and low loan-to-value ratios — has become epidemic. In 2005, Dominion Bond Rating Service reported that mortgages underwritten with minimal documentation sometimes account for as much as 50 percent of subprime (high-risk) mortgages.

According to a new report by the Mortgage Asset Research Institute, almost 60 percent of the stated-income amounts are exaggerated by more than 50 percent. A 2004 MARI study maintained that a majority of FBI fraud-related cases on mortgage applications involved buyers lying on their loan applications about their income, their assets or their residency status. That’s a whole lot of lying going on.

Of course, the pundits of the blogosphere seized upon Serin like hyenas on fresh meat. Many of them are infuriated by the fact that he was unabashedly attempting to make big money in real estate by flipping properties. Others find it irritating that he keeps blogging instead of getting a job. But by offering himself up as a penitent whipping boy of real estate, Serin has unwittingly offered us a glimpse into the fast-approaching future in which those high-flying real estate trade secrets come home to roost.

Still, he doesn’t seem to see those birds crashing to the ground. Serin estimates that even if he can sell all of his properties with short sales, he’ll still be $200,000 to $400,000 in debt. “It’s pretty scary,” he concedes, sounding not at all scared. How will he escape? “I could go back and get a job and just work for a living, but even if I get a Web designer position that pays $50,000 to $70,000 a year, my payments on my debt are still going to be $3,000 to $3,700 bucks a month. I could file for bankruptcy,” he pauses.

“Or I could see if I can do a few more real estate deals.” Suddenly his voice has the buoyancy of a true believer. “To succeed in real estate you have to have the right knowledge and the ability to take action. I fell down this year. But I’m not going to go out without a fight.”

 


Carol Lloyd is currently at work on a book about Bay Area real estate. She teaches a class on buying your first home in the Bay Area, and another class based on her best-selling career counseling book for creative people, “Creating a Life Worth Living.” For more information, email her at surreal@sfgate.com.
URL: http://sfgate.com/cgi-bin/article.cgi?file=/g/a/2006/10/06/carollloyd.DTL
©2006 SF Gate

Seller Financing and Lease Options It is all about the TERMS of the Deal – If you can not get the PRICE low, get great TERMS – Good with little equity or sellers who can wait for their cash – Exit Strategy is either Sell It or Keep It – Create No Qualifying Financing for YOURSELF or YOUR NEW BUYER.

Foreclosures Feb 2006

October 1, 2006 — Leave a comment

Thursday, February 02, 2006
Home Foreclosures From Consumer Debt is Annoyance to Avoid

Debt is More than Annoying; It Could Cost You Your Home

MINNEAPOLIS–(BUSINESS WIRE)–Feb. 2, 2006–
First-Ever National Public Service Announcement Campaign Addresses Growing Home Foreclosure Problem; Promotes 888-995-HOPE Help Hotline

It’s a national epidemic: Within the last five years alone, nearly 2.9 million households in the United States have experienced foreclosure.

To combat the nation’s rising foreclosure problem, the Homeownership Preservation Foundation, a 501(c)(3) nonprofit organization is launching what may be the first-ever nationwide public service campaign to specifically address the nation’s growing foreclosure problem. The campaign encourages homeowners to call the Foundation at 888-995-HOPE to receive free, confidential advice from HUD-certified counseling agencies. Based in Minneapolis, the Homeownership Preservation Foundation is dedicated to reducing foreclosures and preserving homeownership for American homeowners.

According to the Homeownership Preservation Foundation’s president and executive director, Walt Fricke, there’s plenty of blame to share for the nation’s rising foreclosure problem, from homeowners who have not educated and informed themselves about the obligations of taking on a mortgage, to the availability of easy credit. Regardless, says Fricke, no one wins when a foreclosure touches a neighborhood.

“Besides the obvious loss to a homeowner and his or her family, the values of homes near foreclosed properties drop dramatically when a home is boarded up. A typical city may lose up to $33,000 per foreclosed home, and a typical mortgage company may lose $50,000 or more per home,” says Fricke. “One way or another, all consumers suffer and end up paying more.”

To drive awareness of the Foundation’s toll-free hotline, the campaign will leverage two 30-second TV spots, two 15-second TV spots, three 60-second-radio spots and one 30-second radio spot, as well as two print executions. One of the radio spots specifically addresses the needs of homeowners affected by Hurricane Katrina; another radio spot is available in Spanish to reach Latino homeowners. The broadcast spots are being distributed to TV and radio stations throughout the United States beginning in January.

The theme of the campaign focuses on moving homeowners who are facing financial difficulties from a state of “denial” to taking action before it costs them their homes. In each television spot, an actor personifies the nagging, annoying thoughts that weigh on a homeowner who is experiencing financial difficulty. In one spot, an actor appearing as a blue-collar worker is screamed at incessantly as he goes through his daily motions at work. In the other PSA, a woman experiences her annoyance from the moment she wakes up, and it continues as she prepares to leave home for work.

“We’ve counseled more than 50,000 homeowners and we’ve learned that the earlier a homeowner acknowledges their financial difficulties and calls us, the more options we have in helping that homeowner,” says Walt Fricke, president and executive director of the Homeownership Preservation Foundation. “By the time a homeowner actually has been served a foreclosure notice, there is sometimes little we can do.”

Unfortunately, notes Fricke, based on industry data and a recent Harris Interactive survey of homeowners, slightly more than 50 percent of homeowners avoid contacting their mortgage company for help.

“Our campaign is designed to reach out to this 50 percent — those who are uncomfortable calling their mortgage company,” Fricke says.

Colle + McVoy Advertising and Exponent Public Relations, both of Minneapolis, developed the campaign. The creative team included Dave Keepper, creative director; Glenn Gray, art director; and Brian Ritchie, copywriter. The TV public service announcements were directed by New York director Brendan Gibbons, whose other commercial credits include campaigns for CNN, Verizon, ESPN and M&Ms candies.

About the Homeownership Preservation Foundation

The Homeownership Preservation Foundation (HPF) is a Minneapolis-based 501(c)(3) nonprofit dedicated to reducing foreclosures and preserving homeownership for American homeowners. The Foundation was founded in September 2004 with a $20 million seed contribution from GMAC-RFC, a subsidiary of Residential Capital Corporation, one of the nation’s largest real estate finance companies. The Foundation partners with city, county and state governments; federal government agencies; community-based non-profit organizations; and mortgage companies to offer creative solutions to preserve home ownership. For more information about the Homeownership Preservation Foundation, please visit www.hpfonline.org.

Contacts
Homeownership Preservation Foundation
Stephen Dupont, 952-857-6643
stephen.dupont@hpfonline.org

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