We Buy Houses!

The recession may be winding down in the minds of economists, but tell that to someone who is unemployed or in the throes of foreclosure.  Even tell that to someone scanning the news, and it’s a hard sell?  Why?  The foreclosures keep on coming.  At the end of the third quarter of 2009, one in three homes was in foreclosure or delinquent, often the first step to worse things to come.  Why does the mortgage crisis continue?

New groups of people are affected. The mortgage crisis started when sub-prime mortgages crashed, but now prime borrowers are increasing as unemployment spreads.  Currently, unemployment is at 10% nationwide.

There are regional differences. Nevada, Florida, Arizona, and California, where the real estate boom was the greatest, still have skyrocketing foreclosure rates, and represent 42% of all foreclosures.  Florida alone has a 25% rate.

There is a Shadow Inventory. Large stocks of foreclosed homes – up to six million of them -have yet to be put on the market by banks.  Considering that foreclosures are still adding to the numbers, it will be several years before housing inventories are stable.

Some rescue programs are mis-targeted. Nearly 700,000 borrowers are in trial loan modification programs as a result of the Making Home Affordable program, but many thousands who are unemployed or are in negative situations don’t qualify.  The programs require that you have enough income to pay a modified mortgage and apply only to people whose “under water status “ does not exceed 125% of the loan value.

Some programs fail (and may be doomed to). The rescue programs don’t go far enough.  The payments after modification are still too high for many people, so they default later rather than sooner.  Also, the modification programs often lower interest and lengthen the time but do not decrease the principle.  People are left with the sense they are paying longer for an overpriced house.

Some well-intentioned programs may elongate the problem. Current programs that keep homeowners in their homes as renters once they surrender their deeds may be creative and compassionate, but also may delay the inevitable: the home must be sold at a later date.

Express Homebuyers can buy your home for cash.  Check our list of frequently asked questions to see how this can help you, and then call 877-804-3252 to get started.

Once you have gone through foreclosure, your moving date is inevitable, right?

Not so fast. A growing trend around the country is for the bank to foreclosure but not take possession of the property.  Banks are now walking away from homes they own and taking no steps to evict the former owners.  This means people can keep living there, basically rent free until the bank shows up to claim their property.  When the house is worth less than the cost of foreclosing, banks basically have little or no value to return to their investors.  They may not complete the foreclosure.

Having access to a free house sounds like a great deal, but “free” does not mean “trouble free.” You do not get a formal notice from the bank that says “We give up, the house is yours.”  Rather, they just walk away, leaving you in a state of uncertainly as to if and when they will take over the property.  In the future the lender may restart the foreclosure; unless the homeowners have been squirreling away mortgage payments in the interim, they may have to go through the process again and ultimately be evicted.  If the bank sells the loan to a collection agency, suddenly, you may be harassed for the money.

With a lien on the house, you won’t be able to sell it, so you can’t really move on. With the title still in your name, the city can hold you responsible for the taxes, as well as code violations and upkeep – even if you move out.  The city could take the house or hold you liable for violations.

What should you do if the bank walks away?  You may temporarily not have to pay rent, but your goal is to resolve the situation. These days, even some lawyers are scratching their heads about how to resolve the legal issues that result from bank walkaways. Your options?  Here are a few:

• Stay there, but try to put your mortgage payments in an escrow account.  You can use this as sign of good faith if the bank later tries to foreclose and you want to retain the home.  In the worse case, you will have some money built up to get you settled elsewhere.
• Regardless of whether you want to stay or go, stay in touch with bank of loan servicer to get an inkling of what is happening.
• Keep trying to work with the bank to see if you can get a loan modification or short sale.  Make sure you put communication in writing and note the date and name of anyone you speak to, preferably in the presence of a witness.
• Think about bankruptcy, which will stop the foreclosure.
• Get help from a HUD approved housing counselor or from a lawyer.  Even if you no longer want the property, you need help bringing the situation to a close.

If you find yourself heading for foreclosure, the time to act is now.  There is free help available to help you ponder your options, especially if you would like to stay in the home.  

Express Homebuyers can buy your house for cash.  Check our list of frequently asked questions to see how this can help you, and then call 877-804-3252 to get started.