What is a Foreclosure?A foreclousre is a lawsuit in which a bank, mortgage company, or other creditor seeks to take your property to satisfy what you owe (the debt). The bank might take the property, or sell the property to pay off the debt. In a foreclousre, the owner loses all rights in the property.
Forclosure proceedings can be lengthy and the timeframes in which a lender may start the process varies from state to state. Factors such as foreclosure avoidance loans present homeowners with options. We connect individual borrowers and homeowners to individual lenders to bypass banks while meeting payment obligations for mortgage providers. We help you save your home.
What is equity?The equity in your property is what you actually own. It is the difference between what the property is worth, and how much you owe on the property. Equity is an important factor in deciding how to handle your foreclosure
Should I file Bankruptcy?Under some circumstances, foreclosure may be prevented by filing bankruptcy. This is a very complex area of law, and should be considered only with the advice of an attorney.
What is a Foreclosure auction?When a bank auctions a repossessed property, they will typically set the starting price as the remaining balance on the mortgage loan. This may vary from state to state.
In the case where the remaining mortgage balance is higher than the actual home value, known as an Upside-down mortgage, the bank is unlikely to attract auction bids at this price level. A house that went through foreclosure auction and failed to attract any bids becomes property of the bank. It is called "REO" (real estate owned). The bank will typically try to sell it at a loss later through standard channels.
What is a Foreclosure Investment?Some individuals and companies are engaged in the business of purchasing properties at foreclosure sales. Distressed assets (such as foreclosed property or equipment) are considered by some to be worthwhile investments because the bank or mortgage company is not motivated to sell the property for more than is pledged against it.
Foreclosure by Sale, Or Strict Foreclosure?In a foreclosure by sale, the court auctions off the property. If the amount that comes in from the auction is more than the total debt, then you get the difference (Remember, your total debt may include more than just the balance on the mortgage.)
Strict foreclosure is more appropriate if you have little or no equity. In strict foreclosure there is no sale. Therefore, in strict foreclosure you have no chance to collect your equity, if you have any. However, if you have no equity, then you would get nothing from a sale. Remember that in a foreclosure by sale, the cost of the auction, additional attorneys fees and appraisal costs will come out of the sale. Therefore, if you have little or no equity in your property, you should not seek foreclosure by sale.
Common Credit Questions
Will requesting a review hurt my credit score?No! This myth is certainly not true. Checking your report and score is called a ?soft inquiry? and will not hurt your credit. Lenders do however count what are known as ?hard inquiries?. If you are shopping around for a loan you can rest easy, multiple inquiries for the same loan request are common so are less harmful.
Should I close old inactive credit accounts before I apply for a new loan?You must weigh several factors before making this decision. First, if you have too many lines of credit open, consider closing newer accounts first. Having older accounts in good standing reflects better in your score. You may also consider the amount of available credit in your less active accounts. Reducing your credit limit may improve your credit score.
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