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Foreclosures Shorts Sale
Condominiums
Brickell Miami
Brickell Condos
Foreclosure and Bank
Owned Opportunities
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As new foreclosures hit the
market, new foreclosure myths
follow close behind. 6 months
ago we busted 10 popular
foreclosure myths, and now we're
back with a whole new set for
buyers, sellers and home owners.
From understanding complex title
issues (robo-signing, anyone?)
to debunking shadow inventory
timelines, check out the truth
behind these foreclosure rumors. |
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Four years into the
housing crisis,
myths about
foreclosure still
litter the minds of
even the smartest of
real estate
consumers. When it
comes to matters as
high stakes as your
home, confusion can
cost you thousands -
or even your home.
Whether you’re a
buyer looking at
foreclosures, a
homeowner struggling
to keep your home or
a seller concerned
making sure your
home can compete
with the foreclosed
homes on your block,
these foreclosure
myths are prime for
the busting, with no
further ado.
Myth #1: Foreclosure
happens fast. With
unemployment and
underemployment
still affecting
nearly 1 in every 4
Americans, no one is
immune from fears
that a pink slip
might quickly turn
into a foreclosure
notice. According to
Neighbor Works
America, nearly 60
percent of families
seeking foreclosure
counseling cited a
lost job or cut
wages as the reason
they were facing
foreclosure.
While the Obama
Administration's
Home Affordable
Programs haven't
been nearly as
effective as
predicted in
actually preventing
foreclosures, they
have had the effect
of extending the
foreclosure process
for many families.
Even though the
legal process of
foreclosure can
happen in as few as
6 months in most
states, it is
currently taking
much longer for the
average foreclosure
to get to
completion.
Recently, JP Morgan
Chase revealed that
their average
borrower who loses a
home to foreclosure
has not made any
payments in 14
months nationwide;
22 months in FLorida
and 26 months in New
York.
To be sure, some see
this as a good,
others view it as
unnecessarily
dragging out the
overall market's
recovery. Many
insiders will point
out that these
delays in
foreclosure may be
calculated to save
the banks the costs
of owning and
maintaining
foreclosed homes,
not to help
homeowners. In any
event, the fact that
foreclosure does not
happen nearly as
fast, in many cases,
as expected does
give families who
are temporarily down
on their luck some
extra time to try to
get back on their
feet and save their
homes.
Myth #2: Buyers
can’t get clear
title or title
insurance on
foreclosed homes.
When the foreclosure
robo-signing scandal
first hit, there was
widespread concern
that buyers would
not be able to get
clear title on
foreclosed homes,
because the former
foreclosed owners
might be able to
come get their homes
back when the
improprieties in the
bank's foreclosure
documentation
processes came fully
to light. At the
same time, several
of the country's
largest title
insurance companies
publicly balked at
issuing policies on
bank-owned homes
until the issue was
resolved. At this
point, the banks
claim they have
revamped their
processes, and all
banks have stated
that they have found
not a single
borrower whose home
was repossessed
without them having
missed the requisite
number of mortgage
payments.
Nevertheless, a
number of
governmental
investigations are
still in progress.
The fact is, buyers
of bank-owned
properties in nearly
every jurisdiction
are protected from
later title attacks
by foreclosed
homeowners by the
bona fide purchaser
rule, under which
courts would prefer
to simply award cash
damages to be paid
by the culpable bank
to a wrongfully
foreclosed-on
homeowner, rather
than reversing the
sale or ownership to
the new, innocent
buyer. Additionally,
the title insurers
have now changed
their tune and
restarted issuing
insurance policies
on bank-owned homes
which protect
buyers' interests,
after working with
the banks for them
to take
responsibility in
the event a former
homeowner prevails
in a wrongful
foreclosure suit.
While there are
still many
intricacies of title
to be resolved for
foreclosure buyers
who purchase homes
at trustee sales and
auctions, or for
cash buyers who
often went without
title insurance in
the past, on the
average,
bank-owned property
purchased with an
average mortgage and
title insurance, the
chances a buyer's
title will later be
successfully
challenged by the
foreclosed homeowner
on the basis of robo-signing?
Exceedingly slim.
Myth #3: Buyers
should wait for the
shadow inventory to
be released. Many a
buyer, discouraged
with the homes they
see on the the form
in their price
range, has decided
to sit still and
wait for the banks
to release for sale
what is called their
"shadow inventory" -
rumored to be
anywhere from 4 to
nearly 6 million
homes that have
already been
foreclosed, but not
listed for sale, or
will be foreclosed
in the near future.
The fact is, to the
extent that the
banks have
acknowledged the
existence of a pool
of homes they own
but are not selling,
they have expressed
that their reasoning
for holding the
homes off the market
is to avoid flooding
the market and
driving home values
down any further.
For that reason,
buyers should not
expect to see a
massive influx of
these shadow homes
onto the market
anytime soon - if
ever.
Myth #4: If you’re
looking for a deal,
you’re looking for a
foreclosure. Despite
what they may say,
no buyer’s heart's
fondest desire is to
buy a foreclosure.
But almost every
buyer dreams of
buying a great home
- and getting a
great deal on it.
Many people think
that to get a great
value on their home
on today's market,
it means they must
buy a foreclosure.
As a result, the
value and other
advantages of buying
an
individually-owned
home on today's
market are
frequently
overlooked.
Individual sellers
with homes on the
market right now are
generally quite
motivated, and
understand that
their homes are
competing with
discounted short
sales and foreclosed
homes. Many of these
sellers are slashing
prices in an effort
to get them sold -
the most recent
Trulia Price
Reduction Report
revealed that 27
percent of homes on
the market across
the country have had
at least one price
reduction. Now
that's what I call a
sale!
Further, individual
owners are often
much more negotiable
on a wide range of
contract terms than
a bank which owns a
foreclosed home. You
can work with
non-bank owners on
things like repairs,
closing dates,
choice of escrow
provider, closing
costs and even
included personal
property much more
flexibly than you
can when the bank is
on the other side of
the bargaining
table. On top of
that, many
individually-owned
homes are in
pristine, move-in
condition; that is
much rarer with
foreclosures. So,
don't underestimate
the value of the
deal you might be
able to get on a
non-foreclosed home.
Just get clear on
what you can afford
and look at all the
homes that are
available in that
price range, without
discriminating
against
non-foreclosures.
Myth #5: Having a
foreclosure on your
credit history means
it'll take years and
years before you can
buy again. One of
the most Frequently
Asked Questions by
homeowners who are
facing or have just
lost a home through
foreclosure is how
long it will take
before they'll be
able to buy again.
Until recently, the
standard wisdom was
that 5 years,
minimum, would have
to have elapsed
between the
foreclosure and the
new home purchase.
Now, though,
borrowers can obtain
an FHA loan with the
low, 3.5 minimum
down payment
requirement as soon
as 3 years following
a foreclosure. To do
so, though, all your
other ducks must be
in a row.
Post-foreclosure
buyers need a credit
score of 620-640 to
qualify for an FHA
loan; higher for a
non-FHA loan - given
that the foreclosure
itself usually dings
anywhere from
100-150 points off
the credit score
(not necessarily
counting a full year
or more of
pre-foreclosure
missed payments),
former homeowners
who want to buy
again need to ensure
they have no other
late payments or
credit dings after
they lose thier
home. You must have
clean credit with no
derogatory marks
like late credit
card payments
following the
foreclosure, and you
may also be required
to document 12 to 24
months straight of
on-time rent
payments after the
foreclosure.
Further, the bank
may impose a lower
debt-to-income ratio
on post-foreclosure
borrowers than on
borrowers who have
not had a
foreclosure, in an
effort to keep your
mortgage payments
low, keep you from
overextending
yourself and boost
the chances you'll
be a successful
homeowner over the
long-term this time
around. The bank
will also need to
see 2 years of
continuous
employment history
in the same field,
and documentation
that you meet other
loan qualification
requirements.
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Brickell Avenue
Condos By name Sales
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Brickell
Foreclosures Shorts Sale
Condominiums
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