Florida Home and Mortgage

Archive for December, 2009

With rise in foreclosure rate especially in Florida, one that stands second according to data released in month of November 2009. In this aspect one who has availed mortgage loans and one who is trying to buy home must know the possible ways of stopping foreclosure in Florida.

The actual foreclosure process starts as soon as you started to miss mortgage payments and lender issues the default notice. In order to prevent this one must be aware of the fact that early intervention is key to stop things to happen. It means if you find yourself difficult in paying mortgage payments then immediately contact your lender.

It is important to take action immediately because if at all you home is foreclosed then you are not only going to lose the home but also you lose the money that you had paid to lender for all these years and at the same time foreclosure in you credit records will affect the future credit granting capacity.

So to avoid such circumstances act now. In a process of saving your home never ignore letters or phone call from your lender. But in fact contact your lender and explain your difficulty and make a note of your conversation details like what was the result, the date you have contacted and to whom you have spoken to.

At the time you contact your lender, be prepared to show or explain your financial situation with proofs like credit card statements, expenses vouchers etc. to your lender.

If the lender gets convinced with you financial situation then he may guide you through alternatives for stopping foreclosure and those include:

Mortgage modification: if the lender agrees to modify loan which you can afford according to your financial position. It could help you stay current possibly with reduced a payment that is affordable by you. Many people think that reduced payments means reduction in loan but it is not the case actually it is due to reduced interest rate or increase in loan term could possibly reduce your monthly payments.

Pre foreclosure sale: in this case you will be allowed to sell your property and pay off your loan with proceedings. With this you will not be able to keep or save your home but you probably save your credit score and mange to get credit in future to buy another home.

Mortgage forbearance: in this case you lender gives you special repayment plan according to your financial situation or even provide a facility to suspend payments for a pre determined time, which is normally for 6 months to one year. One will qualify for this alternative if you’ve recently experienced any reduction in income or loss of job or increase in expenses like medical expenses.

Deed in lieu of foreclosure: in this case, borrower will be able to save the home where he voluntary give back home to lender but manages to save the credit score and get credit in future.
Taking action early and choosing any of the alternatives will possibly save you from facing foreclosure and damage credit score.

Florida recorded second highest foreclosure rate in November 2009, increased unemployment or decreased earning capacity forced the home owner to default mortgage monthly payments forcing the home owners to face foreclosures. As high number of homes coming for sale, increased supply than demand forced the home prices to decline.

The increased supply of home for sale is because home owners are left with no option to save their home as there is no equity left in home with the price declines and therefore forced to foreclosure. With decrease in home prices in Florida, homes available for sale is soaring for quarter ending in September 2009. This is fifth straight quarter that has recorded higher sales.

With high number of defaults in mortgage payments due to housing recession prompted the credit crisis making harder for borrowers to qualify for home loans. At the same time the tumbling prices across the nation had made the home owners to neither refinance nor to sell had given rise to record level foreclosure rates.

The median home prices declining to $145,400 for the quarter, which was $40,200 below compared to price existing a year ago. With declining prices many people are showing interest in buying homes ever before therefore sales jumped 33 percent with total homes sold were 44,345 this quarter.

Condos, whose median price recording this quarter is $106,100 with drop of $54,000 compared to year before which caused the sales to soar with 14,797 condos sold in quarter ending September 2009, a 56 percent leap from previous year.

As the unemployment rate continue to rise in Florida, which is 11 percent this fall, housing industry analysts says that median prices continue to come down as the more amount of home are forced to foreclosure.

The reduced consumer confidence which resulted from rise in unemployment creates problem for every sector of the economy. Economist says that recession seems to over but with rising unemployment rate, people are afraid to spend money which affected the housing industry and the contributing factors include reduced home prices and increase in home coming for sale for 13 straight consecutive months.

With decrease in home price, home owners are left with no equity in homes and have no option to refinance their home for newer terms and conditions leaving them helpless and having no reason to struggle for making mortgage payments and let their homes drift into foreclosure.

Florida is one among the top states in which home prices continue to tumble even in 2010, reported by fortune magazine. The reason for this home price tumble will be increased foreclosure rate.

Miami is one that topping the list with nearly 33 percent drop in home prices is predicted with west palm beach takes the 5th place, 23.8 percent drop in prices. And further more the decline in home price will not stop there as the downward pressure on continue to 2011, until the reversion in interest rate in 2011 even though the unemployment rate is expected to decrease in 2010.

Florida is one among the states that recorded highest foreclosure rates. The reason behind this is increased homeowners defaulting on their mortgage payments. With spike in unemployment rate and increased inflation rates made the home owner unable to meet their monthly payments regularly. On the other hand, foreclosure homes provide a terrific investment opportunity to investors than traditional properties after long time of escalating prices.

But before you jump in and buy a foreclosed home, one must remember that not every foreclosed home is best buy. One must asses its potential risks and benefits to make a best decision before investing. Remember that investing in foreclosed home is not a get rich quick scheme. Before you invest you need to know enough stuff when it comes to moving through a process and making sure that you are getting best out of it.

For people who are willing to do such home work, there are many web services that provide valuable information to home buyers which were previously hidden. For ex: Realtytrac a leading online foreclosure marketplace.

One thing that a home buyer must know when thinking about buying foreclosed homes is foreclosed process. It is because law is different in different states. Therefore if you one trying to buy foreclosed homes in Florida then you must be aware of the Florida foreclosure process.

The foreclosure process begins as soon as the borrower defaults his payments continuously for two to three months and lender issues default notice that payments must be brought current. Borrower who receives default notice typically has 15 days grace period within which he has to make the missed payments if not lender takes the home to foreclosure.

When the home is brought to foreclosure, it can be settled in four ways. They are:

Pre foreclosure sale: this is an instance where the home is sold to third party with permission for lender before it goes to auction at sheriff sale. It is often the best option available to home owner to sell the home and pay the proceedings to the lender without damaging the credit score that could happen in instance of foreclosure. It also benefits the potential buyer as it gives him the sufficient time to inspect the home about the title and condition of the property.

Public auction: this is an end stage of the foreclosure process where the property in question is put for sale at public auction. Bidding procedure may vary from one state to other and it is advisable to attend different auctions before you actually bid.

Short sale: it is process under which the lender permits the home owner to sell the property before it reaches the foreclosure process and get relived form the mortgage. It is best option for the lender because if he had to go to foreclosure process it will cost him. To save time and money, lender allows the home owner to unload the home quickly instead of putting it ideal and not getting principal nor interest.

Real estate owned properties: it is best way to invest if you are looking for safest investment because one would get enough time to inspect the home and title but this way can be little costlier than other way of foreclosed investment options.

According to risk taking attitude of the home buyer, one can take any of the four ways mentioned above to invest in foreclosed properties.

Since the financial crisis started in late 2006, from than many people are losing their job or had reduced their earning capacity as a result the growth of the economy had stumbled.

Previously, since 2001-02 to 2005-06 the housing industry was in boom and home prices accelerated like a rocket but from then the home prices started to decline as there were no buyers due to higher unemployment rate. At the same time due to loss of job the individuals could not manage to keep themselves current with mortgage payments.

Home owners are trying to keep up their home with every means like mortgage refinancing, home equity loans, debt mitigation or debt consolidation, and through short sale. But due to decline in home prices home owner could not manage to work out with the previously mentioned options, and with over supply compared to demand and ultimately arrive at foreclosure process by the banks.

According to realtytrac, Florida stands second highest position in foreclosure rate for November, beating California for which housing market researchers worry that the problem could even deteriorate more over the coming two years.

It reported that one in every 165 home in Florida is facing foreclosure in November 2009. Previously only Nevada was worse with one in every 119 home facing foreclosure.

It also reported that counties like Miami-Dade, Palm Beach and Broward are in nation’s 13th highest foreclosure rate among metro with one in every 136 home facing foreclosure in November 2009.

The housing market crisis actually began in 2006 when the risky mortgage were taken during the boom of the housing industry began to reset the prices, forcing home owners to pay higher monthly payments over which they can afford to pay. In addition, job losses are also a reason that forces the home owners to loose their home to lender.

The exotic home loans are also reason for this disaster. Home owners are lured with adjustable rate mortgage to avail them at lower rate but they are unaware of the situation when the interest rate rises. This is a condition were lender lure the borrowers with low interest rate at the beginning only.

Many analysts worried about the foreclosure rate because during the present situation even if the employment rate improves next year it is not going to improve the present condition because the ARM rate called adjustable rate mortgage are scheduled to reset in 2011 only until than more thousands of home owners are pushed into foreclosure.

In Florida, nearly 53,000 home owners had received foreclosure notice in November with 2 percent increase over last month and 8 percent over last year, where nationally around 306,000 home owners faced the process of foreclosure.

The efforts made by the home owners to avoid foreclosure process are working out through the options like loan modification, mortgage refinance temporarily because the home owners who availed this options ended in defaulting again are facing foreclosure process which is why the foreclosure rate is increasing.

Due to financial crisis across the globe, unemployment rate is at its peak as many individuals are losing their jobs. As the earning capacity of individuals had a setback, they are falling behind on mortgage payments. If this is happening with you also do not hide instead approach your lender for help. You lender, the bank would in fact work with you for loan modification rather than forcing you for foreclosure which would cost heavily for them.

The lender would come forward to work with you because if they force you for foreclosure they know that they would unable to recover the amount until they sell your home. In present situation there are millions of homes which are abandoned by the banks because there are no buyers. To avoid this situation mortgage companies will come forward to work loan modification with you to keep mortgage loan current.

Before you apply for loan modification with you mortgage company first check out if you are eligible for loan modification or not. If your loan modification application got rejected it would simply cost you dollars. To avoid this you must first know yourself whether you are eligible or not.

If loan modification negotiation is done correctly or in your best interest, then you will be able to reduce your loan rate of interest, extend your loan term, change the interest type, or reduce the monthly payments to the amount that you are affordable.

To make sure your loan modification application get approved you must successfully demonstrate to your lender that you have a hardship like you lost your job, reduction of income, illness etc.

While explaining your hardship one must make sure to submit supporting documents that prove your hardship to your lender like the bank statements, expenditure vouchers, credit card statements etc.

Once you found yourself eligible for loan modification you must submit the loan modification package to loan modification department of your lender. One must be careful in calculating this package because submitting the wrong package will hinder your chances of approval. One must have enough knowledge in doing such calculations otherwise take help of loan modification companies, which will help you in calculation and negotiation in right way and increase chances of getting approved.

If you have not submitted right package then you will find hard to negotiate with your lender which will only gives you temporary solution to your problem not permanent solution that is in your best interest.

During negotiation with lender you must convince the lender that having modified the mortgage loan like adjustable rate mortgage to fixed rate mortgage. Explain them how you will manage to pay the modified mortgage comfortably and you are more likely to get approved for loan modification.

This process of loan modification is toughest task that one needs to have enough patience, negotiation skill and knowledge. If you have any doubt take help of loan modification companies, who will assist you in negotiating behalf of you.

Undergoing financial hardship? If yes, don’t ignore your lenders warnings about your missed mortgage payments. This is because how sever the situation is, there are ways to save your home from foreclosure. Here this article will give you an advice on how to deal with foreclosures.

It is said that never too late to take right action to turn the situations around you. To face this unsure situation one needs to have enough knowledge and information on how to face this situation. Good advice can get you out of this situation and make you confidence. But many people often loss their home with lack of this advice and information. There are many ways through which you can find out the needful. Some of them include approach an attorney. It is great source to find out legal guidance and advice. He will advice what can you do and what not when coming to preventing foreclosure. But hiring a reputable attorney will cost you some extra dollars as most attorneys won’t be giving you foreclosure preventing advice for free. So hiring an attorney will cost you few hundred dollars. But, one who is undergoing financial hardship may not afford this extra burden, so it is better to look for other options available if one can not afford to this.

If you are looking for help that is completely free than only option available is to go online. One can find loads of valuable information online. There are many sites available disclosing valuable information regarding foreclosure. The downside of this source is it could be outdated information. So be careful to find out up to date information.

An expert dealing with foreclosure can answer your few questions like
• How much time do you have to stop foreclosure? This time include from the date of first missed payments.
• How it will affect your credit score?
• How can you negotiate with lender regarding loan modification?
• Is there a way to save your home after the foreclosure process as begun?

Sometimes we may come into situations that lead to loss of job or income, some illness or emergencies that leads to unexpected expenses which make you unable to pay mortgage on time and this could continue until few months. To help the homeowners who are under this situation who is having good credit score government has come up with certain programs that stop the foreclosure process as soon as possible. They include:
• FHA
• Fannie Mae
• VA

These programs help the homeowners to refinance their mortgage with maintaining good credit score. They are introduced by the government to help the homeowners who are facing foreclosures only because they are unable to refinance their mortgage.

The other option available to stop foreclosure are loan modification or loan mitigation, short sale, bankruptcy etc. this options also help you in preventing foreclosures modifying the loan terms there by reducing the burden every month you have to deal with.