More than 1,300 Kansas homeowners faced foreclosure in the first three months of 2007, according RealtyTrac. Our state ranks 16th in the nation in the percent of all mortgage loans in foreclosure, placing Kansas higher than the national average.
Foreclosure destroys homeowners' equity and ruins their credit. It often can take years for a family to recover from a foreclosure. Each foreclosure that leaves a home vacant can cost in excess of $30,000 in direct municipal cost such as law enforcement services and lost economic development. And contrary to common misperception, banks and mortgage investors lose in foreclosure, too -- at least $35,000 to $50,000 on each foreclosed home.
Easier access to home loans, an increasingly fragile economy, and mortgages that suddenly are beyond the financial abilities of the borrower are causing a climb in foreclosure rates in Kansas and across the nation.
Fortunately, there are steps Wichita homeowners can take to avoid foreclosure. The first step is asking for help. In response to the alarming foreclosure rates, NeighborWorks and the nonprofit Ad Council will launch a national public education campaign later this month. This campaign links homeowners to a toll-free foreclosure counseling hotline, 888-995-HOPE. The hotline provides free counseling 24 hours a day, seven days a week, in both English and Spanish. The goal is to steer homeowners to a trusted source for help.
Answering calls on Kansas' behalf are counselors from NeighborWorks organizations such as Community Housing Services NeighborWorks HomeOwnership Center (CHS).
In 2006, more than 25,000 overextended homeowners across the country called the hotline for help. CHS has seen the demand for help grow at a rapid pace. Our nonprofit organization, which counsels people on buying their first home, used to get two calls a month. Now we are getting two to three calls for help every day.
We are working to create a foreclosure prevention task force to bring together local banks, attorneys, credit counselors and other nonprofits to help stem the rising tide of foreclosures and work toward possible solutions. CHS also is pursuing other funding to create a rescue fund to help people in need.
Buying a home is never risk-free. It is essential that people buy homes they can actually afford, and that they not be lured into inflated mortgages by predatory lenders. The key to making a wise investment, and protecting that investment, is knowledge. CHS helps homeowners gain that knowledge.
Sunday, June 3, 2007
Wednesday, May 23, 2007
The Basics of Real Estate Foreclosure
A foreclosure transpires when a person borrows money from a lender to finance some sort of real property or real estate and lack money to pay the monthly mortgage payment. This outcome happens when a borrower is unable to meet the qualifications set forth by the lending institution. In case a borrower stops paying their mortgage, the lender uses the real property as security for the mortgage loan. Lenders use the mortgage for security and don’t actually give out the mortgage like many people think.
Several unfortunate reasons can cause borrowers to face foreclosure. A borrower may find themselves unable to adjust to high interest rates after getting an adjustable-rate mortgage. Things like job loss, divorce and failed business ventures can cause people to fall behind in their mortgage payments. Usually the lender sends out a reminder notice to the borrower in case they forgot a payment. If they do not respond to this reminder, the lender sends out demanding payment notices.
During Lis Penden, the lender’s attorney goes to the county clerk’s office and files foreclosure papers. A public foreclosure auction is also scheduled for the piece of real property. The initial bid goes to the bank/lender at the same value of the unpaid mortgages. If no one exceeds this bid, the bank/lender becomes new real estate owner. The lender’s main objective is to sell the house off because it is illegal for lender’s to own a certain number of foreclosures.
It is important to always complete due diligence when planning to purchase any real estate investment. This process is one of the most important parts of buying or bidding on foreclosure. There are many ways to find foreclosures in your area including the local newspaper and on internet
Click here to see today's mortgage rates or to find a loan
Several unfortunate reasons can cause borrowers to face foreclosure. A borrower may find themselves unable to adjust to high interest rates after getting an adjustable-rate mortgage. Things like job loss, divorce and failed business ventures can cause people to fall behind in their mortgage payments. Usually the lender sends out a reminder notice to the borrower in case they forgot a payment. If they do not respond to this reminder, the lender sends out demanding payment notices.
During Lis Penden, the lender’s attorney goes to the county clerk’s office and files foreclosure papers. A public foreclosure auction is also scheduled for the piece of real property. The initial bid goes to the bank/lender at the same value of the unpaid mortgages. If no one exceeds this bid, the bank/lender becomes new real estate owner. The lender’s main objective is to sell the house off because it is illegal for lender’s to own a certain number of foreclosures.
It is important to always complete due diligence when planning to purchase any real estate investment. This process is one of the most important parts of buying or bidding on foreclosure. There are many ways to find foreclosures in your area including the local newspaper and on internet
Click here to see today's mortgage rates or to find a loan
Myths and Facts About Property Foreclosure
Property foreclosures is a phrase that many of us do not even like to say out loud. Even the most stable individuals can hit hard times that results in them not being able to make mortgage payments on time, so the idea of foreclosure can be quite scary. The fact is that there are a lot of myths out there about foreclosure that just aren’t true. The facts about property foreclosure can put many people at ease and also allow some to profit because of foreclosure.
The first myth about foreclosure that everyone should know is that banks do not like to take houses back from the people that could not pay for them. In fact, most banks will do everything to help a homeowner get back on track or sell property before they have to foreclose on the property. Banks are not in the business of selling homes, so they will do everything they can to keep from doing that. Banks are in the business of loaning money, and they will go above and beyond loaning money to keep from owning your property. Homeowners can benefit from knowing that their bank doesn’t want to foreclose on them, which should encourage them to work with their bank on a payment plan to get back on track.
If you want to buy property you might want to look for foreclosed properties. Many times these properties are very nice, the owners simply couldn’t afford to keep making their mortgage payments so the bank took it back. Because banks are not in the business of owning and selling homes they want to get rid of them as quickly as possible, so they will often sell the home for the amount that is due on the mortgage. Even if you buy houses that have been foreclosed on that are not in the best shape because you bought it at a savings you can fix it up the way you like and still come out ahead.
Many individuals look for foreclosed properties and they buy them to fix them up and then sell them again. This is known as flipping and can be a very lucrative business. Think about it, if you buy a house for $30,000 and you put another $30,000 into the house and when you are done you can sell it for $100,000 you have made $40,000 in just a short period of time! Banks will often list the homes for very reasonable prices, so why not look for yourself or for a business investment?
The first myth about foreclosure that everyone should know is that banks do not like to take houses back from the people that could not pay for them. In fact, most banks will do everything to help a homeowner get back on track or sell property before they have to foreclose on the property. Banks are not in the business of selling homes, so they will do everything they can to keep from doing that. Banks are in the business of loaning money, and they will go above and beyond loaning money to keep from owning your property. Homeowners can benefit from knowing that their bank doesn’t want to foreclose on them, which should encourage them to work with their bank on a payment plan to get back on track.
If you want to buy property you might want to look for foreclosed properties. Many times these properties are very nice, the owners simply couldn’t afford to keep making their mortgage payments so the bank took it back. Because banks are not in the business of owning and selling homes they want to get rid of them as quickly as possible, so they will often sell the home for the amount that is due on the mortgage. Even if you buy houses that have been foreclosed on that are not in the best shape because you bought it at a savings you can fix it up the way you like and still come out ahead.
Many individuals look for foreclosed properties and they buy them to fix them up and then sell them again. This is known as flipping and can be a very lucrative business. Think about it, if you buy a house for $30,000 and you put another $30,000 into the house and when you are done you can sell it for $100,000 you have made $40,000 in just a short period of time! Banks will often list the homes for very reasonable prices, so why not look for yourself or for a business investment?
Taking An Interest In Foreclosure
While just about everywhere in the United States the real estate market has come back robust and healthy and most people can count on their house selling after a short period on the market, there are some states whose residents are facing foreclosure in record numbers.
Ohio, Georgia, Texas and Florida are reeling from recent economic havoc created by their areas industrial demise and the subsequent concentration on the service industry with its less plentiful and poorer-paying jobs. Benefits for these service industry jobs are not nearly as good as those in the prior industrial industry, and in some cases they dont exist at all.
The mid-Atlantic states have been suffering from this loss of manufacturing jobs and firms for decades now and foreclosure and devaluation of homes has become commonplace.
Foreclosure might have been staved off in many of these situations, however, had the homeowners not been the victims of some less than reputable lending plans and firms, with ill advised financing options such as interest only loans that left these borrowers with little home equity when they needed to refinance or secure a second loan to save their home from foreclosure.
The interest only loans left them with little or no equity which meant no collateral for the loan. Their homes fell into foreclosure as a result.
An interest only mortgage loan is one in which the monthly payment is exactly the amount of the interest accrued so far on the loan and doesnt touch the principal.
This interest only feature only lasts for about the first five to ten years of that loan, and while borrowers have the right to overpay at any point their overpayment only goes to future interest payments - again, not the principal.
What this means is that for the years of the interest only option the borrower isnt paying off her or his loan. A 100,000 mortgage in 2000, with an interest only option for 10 years, will still have a balance of 100,000 in the year 2010.
Were the borrower to run into difficult making these payments and find the threat of foreclosure hanging over their head, they could be in serious risk of foreclosure. Lets assume, for example, that the houses market value in 2010 was 120,000.
Since literally none of the borrowed 100,000 had been paid off the equity in the home would be at a mere 20,000. If, however, the mortgage payment made each month to the borrower included 200 towards the principal at the end of that 10 year period the borrower would have another 24,000.
Actually the equity would be much greater because as the principal was paid down the interest on the balance would decrease and the same payment would pay more of the principal and less of the interest. This additional equity might save a home from foreclosure if the borrower were to get sick, lose a spouse, lose a job or otherwise get into financial trouble that made payments late or missed.
The general rule of thumb is that interest only loans should not be considered unless you know for a fact that your earning power five to ten months down the road will greatly increase and your outstanding bills will decrease.
Then the risk of paying a little bit now and a lot later isnt as great. You wont be risking foreclosure.
Mortgage Foreclosure
Find Homes At Affordable Prices. Search For Mortgage Foreclosure.
www.ForeclosuresListings.net
Ohio, Georgia, Texas and Florida are reeling from recent economic havoc created by their areas industrial demise and the subsequent concentration on the service industry with its less plentiful and poorer-paying jobs. Benefits for these service industry jobs are not nearly as good as those in the prior industrial industry, and in some cases they dont exist at all.
The mid-Atlantic states have been suffering from this loss of manufacturing jobs and firms for decades now and foreclosure and devaluation of homes has become commonplace.
Foreclosure might have been staved off in many of these situations, however, had the homeowners not been the victims of some less than reputable lending plans and firms, with ill advised financing options such as interest only loans that left these borrowers with little home equity when they needed to refinance or secure a second loan to save their home from foreclosure.
The interest only loans left them with little or no equity which meant no collateral for the loan. Their homes fell into foreclosure as a result.
An interest only mortgage loan is one in which the monthly payment is exactly the amount of the interest accrued so far on the loan and doesnt touch the principal.
This interest only feature only lasts for about the first five to ten years of that loan, and while borrowers have the right to overpay at any point their overpayment only goes to future interest payments - again, not the principal.
What this means is that for the years of the interest only option the borrower isnt paying off her or his loan. A 100,000 mortgage in 2000, with an interest only option for 10 years, will still have a balance of 100,000 in the year 2010.
Were the borrower to run into difficult making these payments and find the threat of foreclosure hanging over their head, they could be in serious risk of foreclosure. Lets assume, for example, that the houses market value in 2010 was 120,000.
Since literally none of the borrowed 100,000 had been paid off the equity in the home would be at a mere 20,000. If, however, the mortgage payment made each month to the borrower included 200 towards the principal at the end of that 10 year period the borrower would have another 24,000.
Actually the equity would be much greater because as the principal was paid down the interest on the balance would decrease and the same payment would pay more of the principal and less of the interest. This additional equity might save a home from foreclosure if the borrower were to get sick, lose a spouse, lose a job or otherwise get into financial trouble that made payments late or missed.
The general rule of thumb is that interest only loans should not be considered unless you know for a fact that your earning power five to ten months down the road will greatly increase and your outstanding bills will decrease.
Then the risk of paying a little bit now and a lot later isnt as great. You wont be risking foreclosure.
Mortgage Foreclosure
Find Homes At Affordable Prices. Search For Mortgage Foreclosure.
www.ForeclosuresListings.net
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