Imminent Foreclosure?
February 26th, 2010 - ByPosted in Avoid Foreclosure
Our house payment has increased by $900 and one of the family members has lost job, so most likely we’ll have to go with a foreclosure (no equity for refinance). Anyways we have been talking to some loan officers/realtors and they said that “short-sale” is one of the options to can take to save our credit and avoid foreclosure. Taking their advice, I called several companies who had “We Buy Houses” ad on the road sides and their offers seemed too good to be true, saying that they will offer 5 months rent for free if we agree to let them buy our house in short sale. This obviously seems like a scam. So I just wanted to know what is the “correct” procedure to go with a short -sale and what things should be avoided ?
( 2nd Option)
Moreover, we are also thinking about doing a “quit-claim” and transfering the property title to only one family member. However, our loan had several co-borrowers so we were wondering if doing a quit-claim save the rest of the families credit ?
9 Responses to “Imminent Foreclosure?”
February 26th, 2010 at 2:47 pm
Hi Josh,
I use to work in the Short Sale Dept for citi financial mortgage for about 5 years and I worked for investors to help them with short sales.
I can not stand investors. there is NEVER a reason that a person should deed their property over to an investor. the investor wants to pick up your home for under market value, rent it back to you and when your back on your feet, he will sell it back for the fair market value.
Buy something in your price range or start looking at some rentals. Search for a realtor who has done a lot of short sales and list your home on the market.
DO NOT QUICK CLAIM!!!! Lets say you do the quick claim and the investor cant work the short sale out. do you think he will just quick claim it back to you? now you have a mortgage payment and no house. No good!
shoot me an email if you need any more help.
trap_fis@yahoodotcom
February 26th, 2010 at 4:43 pm
If you want a company who would buy your house quick,checkout this website.
http://www.homevestors.com
It is a legitimate company and not a scam. They will come and talk to you,make an offer and do a real quick transaction. The company is a franchise but they all operate on the principal of helping people out whether those people are just going through a tough time or in foreclosure. I’mnot sure where you live but like I said they are a real company and are legitimate.
I checked them out as well and the website informs you of the whole process.
February 26th, 2010 at 4:53 pm
DO NOT, I repeat DO NOT use one of those companies. That is the first piece of advice I have for you. They sound too good to be true because they are scam artists.
Second, a quit-claim to another family member will NOT stop a foreclosure, because it doesn’t erase the lien. Names on the title and on the mortgage are 100% unrelated.
Third, your failure to make timely payments will affect EVERYONE that co-signed for you on their credit.
Fourth, a short-sale is the same as a foreclosure, and it will show up on your credit. This is the biggest myth in the mortgage industry that they are not the same, and when you go and purchase your next home, you will have to meet seasoning requirements for a foreclosure.
The ONLY people that need to give you advice right now is not a Realtor or a Loan Officer, but someone who wants to help you keep your home and minimize your losses…which is the loss litagation department of your lender.
February 26th, 2010 at 11:50 pm
Best thing to do is talk with an accountant who is a CPA. Present all your problems, concerns, options and see how he/she can guide you through what is best for you.
All the banks, mortgage companies, credit card companies, etc all have self interests. A CPA is like hiring your own attorney to help you through finances. CPAs doesn’t have to be expensive and you would likely only need to meet with one for an hour or less.
February 27th, 2010 at 2:30 am
Normally you approach your lender with a short sale, not one of those “we buy houses” people–they are bottom feeders preying on desperate people. Talk to your lender, see if you can negotiate something with them and leave out the middle man. Good luck.
Also– try http://www.naca.com
They are a non-profit housing advocacy group and they might be able to help you refinance. They do fixed rate loans. They got their money from a huge financial win against Fleet Bank for predatory lending practices. Now they use their money to help people buy houses and keep their houses.
OTHER POSTER: Um, my comment was not “ignorant”. If you are thanking the people who ripped you off blind, then I think you are the ignorant one. You answered a sign on the side of the road and took pennies on the dollar and you are seriously recommending that to someone else? That is just crazy.
February 27th, 2010 at 3:43 am
Talk to your lender first to establish what choices you have. Every person’s situation is different. If your only choice is to do a short sale, there are several companies that can help you depending on where you live.
Another company that is legit that may be able to help you is HouseBuyerNetwork.com.
I agree with the other posts, do not use a quit claim deed!
Also, always consult your tax advisor or CPA before you make any final decisions.
Good Luck!
February 27th, 2010 at 4:46 am
Well, the “we buy houses” people may or may not be a good option. Read the contract carefully, and have your lawyer look it over before you sign it.
Remember, the devil is often in the details. If the “we buy houses” folks object to giving you a copy of the contract for your lawyer to look over, then run, do not walk, to the nearest exit.
However, there may well be some economies that the “we buy” folks can use that are not available otherwise, and if they already have an ongoing relationship with the lender, they may be able to negotiate a better deal than you can.
(Essentially, some of these folks are legit, but many are somewhat shady. Be careful. It is possible to lose your home AND ruin your credit.)
The “quit claim” won’t do anything to help the credit of the other borrowers, as it does not affect the mortgage, only the title to the property. Bottom line, they signed the loan, they’re still on the hook.
It’s worth paying for a half hour of your lawyer’s time, or talking to the local legal aid folks if you don’t have a family lawyer, just to keep your and your family’s credit intact.
If the “we buy” folks don’t turn out to be legit, then you should talk to an agent and your lender about a short sale.
February 27th, 2010 at 11:45 am
Regarding the Quit Claim–no it will not save the other folk’s credit. What matters is who is on the loan, not who is on the title.
Regarding the “we buy houses” people, most of these people are not bottom feeders, they are business people. They will be trying to get the best deal they can and you can negotiate with them to get the best deal YOU can. In a GOOD deal you both get some of what you want and it is a WIN-WIN situation. The investor gets some of your equity and you get some of it. You get out of a bad situation with your credit not totally sunk by a foreclosure and the investor makes some money from your house.
Sometimes you can negotiate with the lender but this is MUCH harder than it sounds. It is difficult to find the right dept to negotiate with because the only people calling you are the bill collectors which often aren’t even part of the lender’s company. Call and ask for the “Loss Mitigation” department. Sometimes you can do a Deed in Lieu which means that you just give the deed back to the bank, saving them the cost of legal fees to foreclose.
Be careful of a short sale (which means the house is sold for less than you owe) because you can end up paying taxes sometimes on the difference between the short sale price and what you owed.
February 27th, 2010 at 5:29 pm
If you are facing foreclosure, it is best to deal with whoever you can to help you out of the situation. The ” bottom feeders” that the other poster so ignorantly commented on saved my credit when I called their sign on the side of the road. I know they got a good deal but I would have lost my house anyway and my credit would have been ruined.
Basically every situation is different but if someone is willing to help you out of it so they can profit then good for them.
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