Foreclosures

Facing Foreclosure?
Foreclosures
I receive a lot of calls from people wanting to purchase foreclosure properties. For me, I cannot hear the word foreclosure without feeling a pang of sadness. Homeownership embodies the American Dream. Although the “white picket fence” is a rare find in the desert, those wishing to achieve the American dream, are not. Today we are going to take a quick look at the foreclosure process. There is no way I can possibly explore everything about foreclosures, so this will be a very brief overview.
Foreclosure is the legal process reserved by a lender to terminate the borrower's interest in a property after a loan has been defaulted. The foreclosure process in Arizona starts with the Notice of Trustee's Sale (NTS). When the process is completed, the lender may sell the property and keep the proceeds to satisfy its mortgage and any legal costs. Any excess proceeds may be used to satisfy other liens or be returned to the borrower. The Trustee shall give written notice of the time and place of sale legally describing the trust property to be sold by each of the following methods: Publication of the notice in a general circulation newspaper, posting of the notice on a conspicuous place on the property to be sold, recording of the notice with the county recorders office. By the time the NTS is advertised in the newspaper, you are already six weeks into the foreclosure process.
Prior to the actual trustee’s sale, the borrower has options to explore that could prevent the foreclosure process and potentially keep their credit from being permanently damaged. For most homeowners, facing the loss of their home is devastating and many choose to ignore the situation rather then explore the avenues available to avoid foreclosure.
Selling a home is an alternative for borrowers that are unable to reinstate the loan and face eminent foreclosure. This option allows a home owner to try to salvage his or her credit, pay off the loan, and retain any remaining equity in the home. By informing the lender of this option, the lender may delay the foreclosure proceedings in order to allow sufficient time to sell the home.
In certain cases, the lender may allow the borrower to sell the home when the proceeds from the sale are not sufficient to pay off the existing loan. This is known as a short sale. A borrower should check with his or her lender to discuss this option. Furthermore, the borrower may have to pay taxes on any loss the lender writes off from the short sale. A borrower should consult his or her tax professional before agreeing to a short sale.
If Keeping Your Home Is Not An Option -- Call Your Lender

Sale: If you can no longer afford your home, your lender will usually agree to give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to obtain the services of a real estate professional who can aggressively market the property.

Pre-Foreclosure Sale or Short Payoff: If the property's sales value is not enough to pay the loan in full, your lender may be able to accept less than the full amount owed. This option can also include a period of time to allow your real estate agent to market the property and find a qualified buyer. Monetary help may also be available to pay other lien holders and/or help toward paying a few moving costs.

Assumption: A qualified buyer may be allowed to assume your mortgage, even if your original loan documents state that it is non-assumable.

Deed-in-lieu: Your lender may agree to allow you to voluntarily "give back" your property and forgive the debt. Although this option sounds like the easiest way out for you, generally, you must attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. Also, this option may not be available if you have other liens such as judgments of other creditors, second mortgages, and IRS or State Tax liens.

If you would like more information about foreclosures please contact Tracy Thompson 623-326-0597. Copyright 2006. Tracy Thompson is a member of the National Association of Realtors, The Arizona Association of Realtors and the Glendale Board of Realtors. To find out more about home buying and selling, contact Tracy at 623-326-0597 or email Tracy@TalkToTracyHomes.com. http://www.AZHomeBuyerHelp.com