Foreclosure Facts & Options

What Causes Foreclosure?

There are multiple causes for foreclosure. Typically, foreclosure begins when a homeowner is not able to make monthly payments on their house, regardless of what type of hardships initially caused the financial problems. Foreclosure can be devastating to the homeowner.

Resulting in:

-Loss of residence (at the very least a loss of equity in the home)

-Delinquency on credit and/or default on credit (significantly effecting the credit score)

-Lawsuits (by collection agencies or the IRS)

-Potential loss of employment

-Increase in stress and rash decision making (which could result in relationship hardships)

-Bankruptcy

Facing foreclosure? What Next?

One of the best ways to stop a foreclosure is to talk with your lending company.Talking with a qualified realtor can help you with all negotiations if you decided to sell your home to prevent a foreclosure. This is known as a short sale. If you wish to stay in your home, you should talk with your lender to possibly modify your existing loan or negotiate a refinance of your loan. There are many ways you can avoid foreclosure but you cannot sit back and hope for a miracle to land in your lap.

Is a short sale right for you?

Homeowners faced with foreclosure may chose a short sale because they will not need to worry about credit ratings, debt obligations and more to the point, they will avoid foreclosure and bankruptcy to name a few. This could be a plausible option to avoid foreclosure proceedings and allow them to start with a fresh perspective. This can be a tough option for most due to sentimental value. Losing a home is never a good situation.

Pros & Cons of foreclosure purchase

Real estate investors from across the country have been figuring out ways to capitalize on this depressed housing market. The market for purchasing foreclosed homes, fixing them up and converting them into rental properties has been a boom as of late. Though the current foreclosure situation presents plenty of opportunity to buy properties for pennies on the dollar, it's very important for consumers to research as much information about buying foreclosed homes as possible, because purchasing foreclosed properties is not always an easy process.

Listed below are a few pros and cons of buying a foreclosed home.

Pros:
Foreclosed homes can often be purchased at super-low prices because lenders and homeowners are typically motivated to minimize loss. Most will end up losing money in the process, but, in most cases, taking a small loss is better than losing everything. This means homes sell at prices that are far below their appraised market value. So, the number one pro is cheap housing.
Due to the current housing market decline, buyers have a much larger list of homes to choose from. If one opportunity doesn't pan out, there will be 10 more to take it's place.

Cons:
Due to the mass market of foreclosed properties, the purchase of such properties isn't necessarily as easy as first come, first served. When a house is sold by owner, the buyer can bid/outbid on the house in hopes of purchasing it. With a basic foreclosure, the property is put to auction, which can result in several purchasers bidding/out biding for the property on the auction block. This has the potential to increase the purchase price, but also holds the potential for a lower price.
In some cases, the current/previous owner of the foreclosed property have lost interest in the property due to financial hardships. Unfortunately, some people stop caring about maintenance and even become spiteful and damage the property upon finding out they are being foreclosed on. This makes repair costs much harder to asses once the property become available on the auction block.
Research is the key to finding the perfect property or saving your home. Be diligent and you will be successful.

Tom R Hall

In8 Solutions, LLC has a blog at foreclosure-facts-options.blogspot.com foreclosure-facts-options.blogspot.com/ if you want to find out more about foreclosure and your options.