Help for Homeowners
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Key Terms to KNOW:
Sheriff Sale:
The sheriff may or may not show himself at your doorstep to deliver a notice from your lender(s) stating they are buying their property back. This date is usually 6 months from date of foreclosure proceedings. BE AWARE OF THIS DATE.
Equitable Redemption Period:
This redemption period is the first 6 month period in which the homeowner may redeem the property by paying all derogatory late fees and re-instating the loan to it's current balance of principle and interest. After this 6-month period the Sheriff Sale occurs. See above.
Statutory Redemption Period:
This redemption period is the period in which the bank/lender attempts to redeem the property throught due process of foreclosing on the property and redeeming the property and changing the title to their name. This is a legal process which involves attorneys, courts, and legal fees. This process is also 6-months and 1 day. After this period a Sheriffs Deed is issued to the lender(s) and they now will own title to the property. It will now be a Bank Owned Property (Bank Owned) or Real Estate Owned Property (REOP). At this point in time you can still work with the lender and attorneys to redeem the property by paying all legal fees, late fees, re-instatement fees, real estate costs and closing fees. You can still short sale the property and modify your loan during this time. After this time, you will not own the property anymore. The bank will own it.
*****As always please seek legal advise from a qualified real estate attorney should you have any further questions.******
1. SHORT SALES
- A short sale prevents the Foreclosure from targeting your current credit report and credit history. It will allow you to quickly rebuild your credit and purchase a home in the future without destroying your credit.
- Banks/lenders accept a short payoff on the amount owed to them. This loss is deferred from taxable income for principal residences under the Mortgage Forgiveness Act of 2007 H.R. 3648. It is extended to December 31 2012. It allows a Federal Income Tax Free cancellation of debt income from qualified principal residences indebtedness, which is the debt that was used to acquire, build, or improve the tax payer’s principal residence and that is secured by that residence.
2. LOAN RESTRUCTURING & GOVERNMENT MODIFICATIONS
- There are 3 types of Loan Modifications/Restructuring options available to homeowners.
A. Conversion to fixed rate loan (if you are on an Adjustable Rate Mortgage ARM or Negative Amortization loan NEG AM or an Interest Only loan I/O it is converted to a 30 year fixed rate loan).
B. Resolution of past due payments (payment plan is made for derogatory payments to your lender) and current payment status is re-instated.
C. Interest rate reduction (rates can be reduced down to nearly 1%). Government options are also available for specialized needs of homeowners. These plans are called H.A.M.P (home affordable modification plans) and M.H.A (making homes affordable).
- The loan modification process can take up to 90 days to be completed, during which time the lender issues a Forbearance plan on the property. Forbearance issuance can stop the foreclosure proceedings on your property, which will allow us to work with your bank/lender to find a workable solution to keep you in your property. This process can also take you out of foreclosure and put you into the forbearance period, during which time, the bank/lender will halt any foreclosure proceedings or sheriff sale dates.
3. HARP Plans Through CITI & WELLS FARGO
- If your current residential mortgage is through Citi Mortgage or Wells Fargo you can qualify for their HARP programs.
Citi Mortage: Citi Mortgage can refinance your home no matter what the value of the property is at
their most current rates. If your home is $50K under value they will refinance at
whatever the appraised value comes in at.
Wells Fargo: Wells Fargo can refinance your home up to 105% of the appraised value. If your
home is too far under value this plan will not work. This is not as good of a plan as
Citi but Citi can only refinance your home is your currently with them. Wells Fargo
will take on any new customers who meet their guidelines. Income and Credit are a
criteria for review.
Call or email for complete details on these plans as rates and guidelines may change daily.
4. Bankruptcy VS. Foreclosure
- While I am not an Attorney, I can tell you the difference in times frames from a mortgage lending background. A bankruptcy stays on your credit report forever and so too does a foreclosure. This information is always with you but there are different time constraints to look at when considering each of these items. Below is a brief outline/synopsis of how these items can affect your credit from a lending perspective.
1st.
A foreclosure stays on your credit report for 3 years, meaning any lender or lending agency can consider this for 3 years. After 3 years, a lender or lending agency can dismiss the charge and based on your new credit score they may begin lending you money at "normal" rates again.
2nd.
A bankruptcy stays on your credit report for 7 years, meaning any lender or lending agency can consider this for 7 years (depending on which type of BK you choose to pursue can affect the overall outcome). After the 7 year period and depending on your credit score and credit ability, they will/might consider lending money or credit back to you.
When considering any of these options it is best to seek the qualified advise of a legal representative or attorney.
5. Credit Repair
In our ever changing economy we understand many Americans are facing difficult times. It is our goal to help each individual person and family on understanding the negative effects bad credit can cause you and the positive affects that good credit can bring to you throughout your lifetime. Peace of mind, better rates, extended credit lines, job increases and most of all, satisfaction of knowing you are better then everyone else. Please click on our CREDIT REPAIR button on our home page to contact LEGACY CONSULTING. A proud partner of Offsite Realty Inc. www.LCGroupInc.com
If you or anyone you know is interested in speaking with me directly please feel free to contact me directly via phone or email. I am here to help you through this difficult time and give guidance accordingly.
Email: Ken@OffsiteRealty.com
Direct: 612.749.4141
Fax: 1.800.450.1094
