Foreclosure in Columbus>Question Details

Cassandra Sk…, Home Buyer in Canal Winchester, OH

Foreclosure Information

Asked by Cassandra Skipper, Canal Winchester, OH Thu Apr 3, 2008

I think it's great that people are getting help to stop their foreclosure, but what kind of help are people going to get who have already lost their homes. With the number of people who have already lost their homes sky rocking everyday, these people are no longer to purchase homes for years to come, which takes them out the market place. Any for seen help to make them able to purchase homes again? Even if the market turned around, there will still be a problem because of the shortage of people being able to purchase all these homes.

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0 votes Thank Flag Link Sun Mar 15, 2009
I do agree that if something isn't done that the quantity of people that have recently went through foreclosure will begin to have an impact on the demand of homes. Obviously this is why it was so important to slow down or halt the quantity of homes currently going through the foreclosure process. The recent bills that just went through congress should help a lot more than the first round of T.A.R.P. that came out late last year. Hopefully there is more incentive now for lenders to actually participate in these foreclosure prevention programs. Plus Fannie and Freddie put a temporary hold on current foreclosure action which will also help tremendously. With the $8,000 tax break for first time home buyers in the recent stimulus package, this should also help rid the market of some of the distressed supply of homes that are currently dragging down the property values for homeowners that remain in the neigborhoods that have been hit hard with foreclosures or abandoned houses.

OK, but this still doesn't answer your question. One can only hope that underwriting guidelines are relaxed a little for at least those people that completed at least attempted and/or completed a pre-foreclosure sale. At least these people took a proactive approach to letting their lenders know there is a problem that a temporary fix won't help. I do stress that everyone should stay in contact with their lenders. I know they are scary and the last people that you think you would want to speak with, but believe me, they may have an option. If you have to miss a few payments due to an illness or short term financial problem, there will probably be an option for you. If it is more long term, but still less than a year there could be an option for you. If all else fails and you feel that you won't recover from the financial hardship such as a loss of income to death or divorce, then a pre-foreclosure sale is an option. This is much better than blatantly ignoring your lender and not sending them any money until they foreclosure which could take 6 - 12 months or sometimes longer in our state. I'm not sure there will be any future change to an underwriting guideline that will foregive home owners that did that at least in the short term. As it stands now, to be approved for an FHA loan a foreclosure must be at least 3 years old with no others late payments on your credit report in the most recent 12 months. That really isn't a long time to wait for a foreclosure to be put behind you and move on to another home purchase.
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0 votes Thank Flag Link Tue Mar 3, 2009
The folks who've been foreclosed upon all need places to live. If they can't buy, they'll rent. And many of the foreclosed properties are being purchased by investors who plan to "buy and hold"--renting out the properties for a few years before selling. So, the houses are still there. And the people are still there. It's just that they'll be renters for awhile, not owners.

And that may not be all bad. Some of the people who lost their homes should never have bought in the first place. Self-employed, stated income, 100% financing, option ARMs, offering 5%-10% above the listing price...and on and on. Many weren't qualified to buy. Some had no idea what they were agreeing to. Others were banking on continued skyrocketing appreciation. There's plenty of blame to go around. But the point is that some of these people were really not qualified to buy in the first place. And they may still not be qualified to buy. For them, renting is an acceptable option.

And if these people want to buy, there are always ways. Lots of ways. Lease-option. Lease-purchase. Contract for deed. Land contract. Equity sharing. Subject to. In fact, a lot of investors buying the foreclosed properties are willing to sell, or will be soon, using lease-options, lease-purchases, contract for deed, and so on. In fact, right now, I (and many investors) am having a much harder time finding people who want to buy using lease-options than I am finding owners who'd be willing to sell their house via lease-option.

The opportunities are still there, even for people who've lost their homes through foreclosure.
0 votes Thank Flag Link Thu Apr 3, 2008
Don Tepper, Real Estate Pro in Burke, VA
Many times I am finding that people are losing there homes to due loan companies foreclosing on the properties after jacking up fees and interest rates, making the home unaffordable for the owners. Almost a predatory lending scam to get them in the home, but then raise the rate again and again, and add fee after penalty, after fee on to the home to get it to a point where they could NEVER afford to keep it - I see it all the time. I have clients who have actually sent payments in that were not complete, but all they had to send, and the bank sends them back saying that they want all or nothing.

I have investors write offers on those homes, purchase them as short sales, and then rent them back to the current owners, or look fornew tenants.

For the people who are already out, they can rent, and my investors currently have some renting from them - it works out well. Typically they can not get aloan, soi he will land contract or lease option the home to them instead.

We specialize in PRE-forecloures homes, and helping those people find places to go after they sell, our website is below if ou have any questions.
0 votes Thank Flag Link Thu Apr 3, 2008
I speculate that they would become tenants or land contract purchasers. Perhaps that would be good for investors?
0 votes Thank Flag Link Thu Apr 3, 2008
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