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California Pre Foreclosure Law Article
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Considerations For A Pre Foreclosure Sale
from:A pre foreclosure sale is most commonly referred to as a "short sale" since the seller is going to have to sell their house or property "short" of the actual market value. Since the seller already knows that they will be getting less out of the house than they put in, maximizing their return on the pre foreclosure sale is key as this decreased the amount they will need to borrow or continue to pay on the balance of the mortgage. In cases where the owner is not able to sell the home prior to the foreclosure, they will lose the house and property and will take a significant hit to their credit score as well as there ability to obtain a home loan, or any other type of loan, well into the future.
Since a foreclosure is so negative, most homeowners that cannot refinance or work with their lender to catch up on defaulted payments and set up an appropriate program of repayment for the future often choose the option of a pre foreclosure sale. As an investor it is critical to consider all option of the pre foreclosure sale as there can be hidden costs, fees and significant upgrades required to the property before it can be resold. Even if a house is purchased for thousands of dollars below market value if it needs thousands of dollars of upgrades it is not a bargain.
Unfortunately many first time investors get caught up in the hype and marketing that many pre foreclosure sale companies and marketing agencies promote. Buying a house in a depressed housing market, even at a bargain price, doesn't make sense if you can't rent it out or sell it for more than you bought it for. In cases where there is a depressed real estate market, buying only makes sense if you have the ability to pay the mortgage yourself or if you intend to live in the house and make the payment. Buying a house assuming that the pre foreclosure sale low price will mean that you can somehow sell it for more in the same market is not realistic, although many agents and marketing companies will not present this information.
If you are considering a pre foreclosure sale property, first start by seriously looking at your financial status. If you can afford to purchase the house without putting yourself at risk, then answer the following questions:
• Could you afford the mortgage payment if the property did not rent or sell?
• How much money would be needed to complete the upgrades to make the house more attractive on the market?
• Does the location warrant the upgrades in your return? Older neighborhoods or neighborhoods in transaction are often poor investments.
• What are the overal comparable sales figures for similar houses in the area?
Knowing the pros and cons of purchasing a pre foreclosure sale property are important for your financial future.
California Pre Foreclosure Law News
States With Highest Foreclosure Rates Among Bank Deal Holdouts - BusinessWeek
 Bloomberg | States With Highest Foreclosure Rates Among Bank Deal Holdouts BusinessWeek 8 (Bloomberg) -- California, New York, Nevada, Florida and Massachusetts are among the states that haven't signed off on a settlement with banks over foreclosure abuses, according to state officials and two people familiar with the talks. More US states to join foreclosure-abuse deal Michigan agrees to foreclosure settlement |
States Debate Foreclosure Robo-Signing Settlement - NPR
States Debate Foreclosure Robo-Signing Settlement NPR A year ago, banks admitted to abusing the foreclosure process — using fake signatures to power through foreclosure documents — a practice known as robo-signing. Now, five major banks and more than 40 state attorneys general have agreed in principle ... |
Mortgage Accord, UBS, Gupta, Insider Trading: Compliance - BusinessWeek
Mortgage Accord, UBS, Gupta, Insider Trading: Compliance BusinessWeek 8 (Bloomberg) -- California, New York, Nevada, Florida and Massachusetts are among states that haven't signed a settlement with banks over foreclosure abuses, according to state officials and two people familiar with the talks. Mortgage Accord, UBS, Gupta, Insider 'Criminal Club', Finra: Compliance |
Proposed settlement with banks over foreclosure practices dealt a setback - Washington Post
 Independent Voter Network | Proposed settlement with banks over foreclosure practices dealt a setback Washington Post Had Schneiderman backed the deal Tuesday, as several informed observers expected he would, it could have increased the likelihood that remaining holdouts such as California, Delaware and Nevada — which have shared Schneiderman's long-standing concerns ... California to Reconsider Foreclosure-Gate Settlement Talks Michigan, others join foreclosure abuse deal Foreclosure Deal Said to Offer $17 Billion in Mortgage Aid |
Bad Home Loans Top $72 Billion in 'Colossal Failure': Mortgages - BusinessWeek
 Bloomberg | Bad Home Loans Top $72 Billion in 'Colossal Failure': Mortgages BusinessWeek 8 (Bloomberg) -- Costs from faulty mortgages and shoddy foreclosures have topped $72 billion at the biggest US banks as they near a settlement of a 50-state probe into the industry's practices. Wells Fargo & Co., Bank of America Corp., Citigroup Inc., ... Banks largely reserved for US mortgage pact cost 5 Booming Bank Stocks Poised to Fall Mortgage relief: Partial solution better than none |