The current market comprised of foreclosure properties is an unfortunate situation for all parties involved, and is increasing daily. William E. Wood and
Associates has positioned itself with local and national banking institutions including national REO asset management companies. Our company currently has 20
locations with over 650 agents covering Southeastern Virginia and Northeastern North Carolina. Each of the areas covered by our offices has agents
specializing in HUD, VA, Short Sales as well as bank foreclosures.
What is a foreclosure?
Foreclosure is the legal process by which a bank seeks to recover the amount owed on a mortgage typically due to
default. There are several stages in the foreclosure process:
- Pre-Foreclosure / Short Sale: Basically, when the proceeds of a home "fall short" of what is still owed on a mortgage. During
this time, the owner may possibly have the option to sell to a third party for less than what is owed on the mortgage and the bank may potentially avoid a
costly and lengthy foreclosure process by accepting this lesser amount.
- Auction: If the property is not sold during the pre-foreclosure period (if there is one), a public auction is then typically held to sell
the property to the highest bidder. Foreclosure sales may include a minimum bid amount along with accrued interest, attorney fees and possibly other
foreclosure fees. Typically, the property is purchased "as-is."
- Bank-Owned / REO (Real Estate Owned): If the property fails to sell in the pre-foreclosure stage or at auction, ownership reverts back to
- Mortgage servicers have 10 days to accept or deny a short sale request. After a sale is completed, the borrower could be completely released from debt.
- Borrowers are eligible to receive a $1,500 moving allowance, if they sell their home through a short sale.
- Mortgage servicers will receive $1,000 for each completed short sale.
- Investors who hold first mortgages can get as much as $1,000 for allowing second lienholders to release their liens.
- Second lienholders can get only as much as $3,000 in proceeds from short sale to release their liens.
- The property must be the homeowner's principal residence.
- The homeowner is delinquent on the mortgage or default looks likely.
- The loan was made before Jan. 1 this year and is less than $729,750
- The borrowers' total monthly mortgage payment exceeds 31 percent of their before-tax income.
Source: Keeping Current Matters 3/2010, HAFA Guidelines
Avoid Foreclosure Checklist -- Homeowners' Options
- Bring your loan current and maintain regular payments in a timely manner.
- Work out a repayment plan.
- Refinance your home with better rates and terms.
- Modify your current loan with your lender.
- Rent your home and make the mortgage payments to your lender.
- Sell your home and pay off the loan amount due.
- Borrow money from a relative or friend to bring your payments current.
- Get protection under the Service Members Civil Relief Act (SMCRA).
- Enter into a Deed In Lieu of Foreclosure or "friendly foreclosure."
- File for bankruptcy protection to stall the foreclosure process.
- Sell your home in a "short sale" if the lender will accept a discounted payoff for the outstanding mortgage due.
- For more information about foreclosure laws in your state visit http://www.foreclosurelaw.org
For more information on the legal aspects of the foreclosure process, contact your state attorney general's office.