Charlotte Real Estate

Foreclosure Prevention

Start today by learning more about the options available to you. Below are a few resources, please feel free to contact Peters & Associates, Inc. and we will direct you to additional sources and organizations that may be able assist.

Avoid Foreclosure

  1. Selling Your Home - Selling at a Loss[+]

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    Can a home seller sell a home for less than its mortgage?
    Yes, in some case you can sell your home for less than what you still owe on the mortgage, but this is complicated and depends on the lender. This situation is known as a "short sale." Sometimes a lender will be willing to split the difference between the sale price and loan amount, which still must be paid. A short sale may be more complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Freddie Mac, the two major secondary-market players. If the loan was a low down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.

    When does foreclosure begin?
    Lenders will initiate foreclosure proceedings when borrowers become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the borrower in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction. A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale. Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them. Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.
  2. Selling Your Home - Short Sales[+]

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    When does foreclosure begin?
    Lenders will initiate foreclosure proceedings when borrowers become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the borrower in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction. A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale. Some sales allow the successful bidder to take possession of the property immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them. Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.

    How long do bankruptcies and foreclosures stay on a credit report?
    Bankruptcies and foreclosures can remain on a credit report for seven to ten years. Some lenders will consider a borrower earlier if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through a bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.

    Can a home seller sell a home for less than its mortgage?
    Yes, in some case you can sell your home for less than what you still owe on the mortgage, but this is complicated and depends on the lender. This situation is known as a "short sale." Sometimes a lender will be willing to split the difference between the sale price and loan amount, which must still be paid. A short sale may be more complicated if the loan has been sold to the secondary market, because then the lender will have to get permission from Freddie Mac, the two major secondary-market players. If the loan was a low-down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.

    How does a home go into foreclosure?
    Foreclosure proceedings usually begin after a borrower has skipped three mortgage payments. The lender will record a notice of default against the property. Unless the debt is satisfied, the lender will foreclose on the mortgage and proceed to set up a trustee sale.

    How does someone sell a slow mover?
    Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home. If you are selling in a slow market, your first step would be to lower your price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired. Secondly, you need to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet. Another option is to pull your house off the market and wait for the market to improve. Finally, if you who have no equity in the house, and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of-foreclosure with your lender. A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender. In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest, and in many cases most effective, option is to lower the price.
  3. Short Sale Process[+]

    Short Sale Process


    How a Short Sale is Handled from Listing to Bank Approval
    The short sale process is still a mystery to many people, even after all these years. Lots of buyer's agents are confused; puzzled buyers are looking for direction, and not every short sale listing agent knows how to do a short sale.


    The Basics of a Short Sale
    Banks grant short sales for 2 reasons: the seller has a hardship, and the seller owes more on the mortgage than the home is worth.

    A few examples of a hardship are:

    * Unemployment / reduced income
    * Divorce
    * Medical emergency
    * Job transfer out of town
    * Bankruptcy
    * Death

    The seller will need to prepare a financial package for submission to the short sale bank. Each bank has its own guidelines but -- the basic procedure is similar from bank to bank. The seller's short sale package will most likely consist of:

    * Letter of authorization, which lets your agent speak to the bank.
    * HUD-1 or preliminary net sheet
    * Completed financial statement
    * Seller's hardship letter
    * 2 years of tax returns
    * 2 years of W-2s
    * Recent payroll stubs
    * Last 2 months of bank statements
    * Comparative market analysis or list of recent comparable sales


    Writing the Short Sale Offer and Submitting to the Bank
    Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales. Banks are not in the business of giving away a home at rock-bottom pricing. The bank will want to receive somewhat close to market value. The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales.

    After the seller accepts the offer, the listing agent will send the following items to the bank:

    * Listing agreement
    * Executed purchase offer
    * Buyer's preapproval letter and copy of earnest money check
    * Seller's short sale package

    If the package is incomplete, the short sale process will be delayed. In this event, the bank might even shred the package.


    The Short Sale Process at the Bank
    Buyers may wait a very long time to get a response from the bank. It is imperative for the listing agent to regularly call the bank and keep careful notes of the short sale process. Buyers may get tired of waiting for short sale approval that they may feel the need to threaten to cancel if they don't get an answer within a specified time period.

    That type of attitude is self-defeating and will not speed up the short sale process. If buyers are the type with little patience, perhaps a short sale is not for them.

    Following is a typical short sale process at the bank:

    * Bank acknowledges receipt of the file. This can take 10 days to a month.
    * A negotiator is assigned. This can take 30 to 60 days.
    * A BPO is ordered. The bank probably will refuse to share the results of the BPO.
    * A second negotiator may be assigned. This can take another 30 days.
    * The file is sent for review. This can take 2 weeks to 30 days.
    * The bank may then request that all parties sign an Affidavit.
    * The bank issues a short sale approval letter.
    * Closing takes place


    5 Ways to Find a Short Sale Listing Agent

    Why a Short Sale Specialist is Better than a Neighborhood Specialist
    Home sellers can easily find hundreds of agents eager to list their homes, but finding a short sale listing agent is more difficult. That's because a short sale listing agent does more than slap the listing into MLS and plop a sign in the yard.

    The short sale agent handles negotiations with the bank. If the agent has no experience dealing with loss mitigation and negotiators, the seller is the person who may suffer. Novices should not handle short sales.


    Searching for a Short Sale Listing Agent
    Due to rising numbers of foreclosures and short sales in certain parts of the country since 2006, many real estate agents have decided to market themselves as short sale specialists. Some of those agents have little or no short sale experience.

    Here are a 5 ways to find a short sale listing agent:

    * Referrals From Family / Friends

    In some areas, foreclosures are ubiquitous and more the norm than a regular sale. Sellers may already know someone who successfully closed a short sale, and that seller is an excellent source for providing a referral.

    * Ask an Agent for a Referral

    Agents who don't list short sale transactions generally know which agents are short sale specialists. Agents judge each other by harsher standards, I have discovered, than buyers judge agents, so you're likely to be directed to a top-notch short sale listing agent. 

    * Attend Short Sale Open Houses

    Find out if the agent hosting the open house is the listing agent. Sometimes, agents let associates in their offices hold open listings. Talk to the listing agent and try to get a sense of how many short sales this agent has handled and whether the agent is knowledgeable.

    * Use the Internet to Find a Short Sale Agent

    Many short sale listing agents write blogs about their experiences, because dealing with negotiators can make one want to jump off the nearest cliff, and writing a blog provides temporary relief. It's almost like reading a diary because you're given an inside peek at what goes on behind the scenes.

    Go to several agent's websites and look through the agent's listings. Are any of them short sales? Are those the agent's own listings or somebody else's in the office?

    * Run Short Sale MLS Searches

    If you have a friend in the real estate business with access to MLS, run a search by limiting the returns to short sales. Look in a wide area and not a specific neighborhood because short sale specialists sell all over town. Then, pull up each agent's closed sales for the past couple years. Pay special attention to the days on market and select a short sale listing agent with lower days on market. Then go to that agent's website for more information.
  4. Short Sale Myths[+]

    Short Sale Myths


    A short sale can be an excellent solution for homeowners who must sell and owe more on their homes than they are worth. Unfortunately, a number of myths about short sales have developed, and it is important to understand the reality of this process should you find it meets your current needs.


    Myth #1 The Bank Would Rather Foreclose than Bother with a Short Sale
    This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.


    Myth #2 You Must Be Behind on Your Mortgage to Negotiate a Short Sale
    While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency. If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.


    Myth #3 There is Not Enough Time to Negotiate a Short Sale Before My Foreclosure
    This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes. The foreclosing party in most cases a lender can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For Short sale Specialists who understand foreclosures and short sales, there is always time to stop the foreclosure sale.


Making a Home Affordable Program
The Obama Administration's Making Home Affordable Program was created to help millions of homeowners refinance or modify their mortgage payments to a level that is affordable now as well as in the future. If a property owner needs a way to make homeownership more affordable, the Home Affordable Refinance or the Home Affordable Modification may be able to help.

Millions of
homeowners with Fannie Mae / Freddie Mac loans are eligible for these programs. First, property owners should determine whether they have a Fannie Mae or Freddie Mac loan:

Fannie Mae

Freddie Mac

Property Owners should contact the mortgage servicer-the company to which monthly mortgage payments are sent-to determine if they qualify.

Contact the Homeowner's Hope Hotline at 888-995-HOPE (4673)

If already scheduled for
foreclosure, property owner should contact their servicer immediately. Servicer may postpone the foreclosure while loan is evaluated.

Making Home Affordable

Making Home Affordable


Service Members Civil Relief Act (SCRA)
The Service Members Civil Relief Act (SCRA) was signed into law on December 19, 2003. The Act amended and replaced the Soldiers' and Sailors' Civil Relief Act of 1940. In general, the act seeks to strengthen the national defense by providing for temporary suspension of legal proceedings and financial transactions that may adversely affect the rights of service members during their military service.

The SCRA covers all Active Duty service members, Reservists and the embers of the National Guard while on active duty. The protection begins on the date of entering active duty and generally terminates within 30 to 90 days after the date of discharge from active duty.

Among other things, the act contains special rules regarding debts secured by a mortgage, trust deed, or similar security interest in real or personal property owned by a service member. Generally, the act prohibits the sale,
foreclosure, or seizure of property, based on a breach of such a secured obligation, during the period of military service or within 90 days thereafter. The prohibition applies only to obligations that originated prior to the service members military service, and for which is still obligated.

The SCRA protects service members agains
foreclosures of mortgages, as long as the following facts are established:

1. The relief is sought on an obligation secured by a mortgage, trust deed; or other security in the nature of a mortgage on either real or personal property.

2. The obligation originated prior to entry on active duty.

3. The property is still owned by the service member of family member prior to entry on active duty.

4. The property is still owned by the service member or family member at the time relief is sought.

5. The ability to meet the financial obligation is materially affected by the service member's active duty obligation.

Servicemembers Civil Relief Act