Understanding foreclosures is difficult for many people. How did we get in this mess and how can a distressed homeowner best get out of it.
We got into this mess because predatory lenders made non-sustainable loans. For instance, they offered “teaser” rates to people which the new home owner could afford – until the full rate kicked in. They offered “stated income loans.” It is estimated that 60 percent of people who received stated income loans significantly inflated their salaries and income.
Understanding foreclosures is more than knowing about the sub-prime mess. If those loans were the only properties affected by the mortgage crisis, things wouldn’t be so bad. The problem is that they are dragging down the rest of us.
You see, when a bank forecloses on a stated income loan, they have a property in their inventory that they can’t move fast. That impacts the person down the street who is selling her home because of a job relocation.
Then, the investors who were planning to “flip” the home sees the property values decline and they now owe more than the house is worth. They conclude that the only thing to do is walk away and abandon the house.
Another key in understanding foreclosures is knowing that it will continue to cycle downward. It’s estimated that houses won’t hit bottom until 2011 and between now and then 2.5 million homes will be foreclosed on.
Understanding foreclosure means more than knowing why all of this is happening. It also means knowing what you can do to save your home.
Your options are outlined in a new report, The Foreclosure Survival Guide. In it you will find:
• The One Critical Question you must answer today that will affect your financial future for the next decade or beyond.
• Whether to respond to the bank’s phone calls and letters – the answer depends on what your financial goals are.
• Whether hiring a local real estate attorney will help you protect your home and credit.
• Seven specific ways to protect your assets when dealing with the bank.
• Why speaking to someone in Collections at the bank will do you no good. And who to speak to instead.
