Foreclosure Property Money Pits – Advice From a Certified Home Inspector

New home buyers should be extremely cautious regarding hidden property defects of a foreclosure real estate purchase. Recent national real estate data reports that the majority of real estate transactions are now part of a foreclosure process. At the same time, a significant percentage of these buyers at forgoing the recommended professional home inspection process. Buyers are skipping this prudent inspection process is some cases because they have been misinformed by the bank, and others, that the property will be only sold “as is” and no repairs will be completed. As an experience real estate inspector (involved in hundreds of foreclosure inspections), I can report that the “as is” rational to forgo a professional home inspection will not only cost the buyer thousands of dollars in purchase price and repair losses, but will also put the buyer’s family at risk from undiscovered safety and environmental hazards.

Having a foreclosure home inspected diligent professional is as important as inspecting a home where the occupant homeowner is available – maybe more so. Sellers and their representatives are required to disclose all known significant defects. But, if a foreclosure home is owned by a bank, the bank has never lived in the property, so it is not likely there will be very much information on any disclosure statements. In this situation, it is especially important to take the necessary steps to know the true condition of the property. Homes usually go into foreclosure because the owner can no longer afford the mortgage payments and has moved out. As a result, maintenance and repairs get neglected as well. In many cases the owner or tenant is angry, and actually removes or destroys major systems in the home. It is critical that buyers know the condition of the structure and all the major systems. Only a Certified Real Estate Inspector will provide that information.

The “as is” statement, has been promoted as meaning the bank will not fix any defects found. My experience is just the opposite. My inspection clients have reported that banks are often responsive for expensive and or safety hazard defects reported by a Certified inspector. Even if the bank is unwilling to negotiate over any discovered defects, the information the buyer receives from a thorough home inspection is invaluable in making an informed purchase decision. And even if there are plans to do significant remodeling, why risk discovering problems with the furnace, foundation or structure after you close escrow and begin work? Better to eliminate any big financial, environmental and safety hazard surprises by knowing up front about problems by getting a detailed home inspection. The inspection process is really the only way to find out if the foreclosure property is really a good financial deal or not.

Homebuyers, banks and or sellers should retain the services of qualified inspectors trained and experienced in home inspection. It is also critically important that the inspector be a certified member of a well-founded professional association such as ASHI (American Society of Home Inspectors). ASHI is the largest and oldest inspection association in the country. Certified ASHI inspectors must adhere to CREIA’s Code of Ethics and follow the Standards of Practice developed and maintained by the Association. Recognized by national consumer associations, these Standards of Practice are considered the source for Home Inspector Standard of Care by both the real estate and legal communities.

Foreclosure Statistics for the State of Maryland

Across the country, there has generally been improvement in the level of foreclosures. Of course, this varies widely on a state by state basis. In fact, most people are surprised to learn which state has the highest foreclosure rate. Currently it is Maryland which has the highest foreclosure rate in the entire country, which would not be the average first guess.

Most people associate the highest foreclosure rates with states such as Florida and Nevada, or perhaps New Jersey. All three are in the top five, along with Delaware, but it’s Maryland that outpaces them all in the wrong direction.

All of the statistics here are from RealtyTrac, and reflect the latest available data for April 2016. According to these figures, the rate in Maryland is one in every 535 homes is in foreclosure. Nationally, the figure is one in every 1,212 homes, so Maryland’s rate is more than double the countrywide rate,.19% versus.08%.

As mentioned, Maryland is followed by Delaware, with one in every 579 homes, New Jersey, with one in every 662 homes, Nevada, with one in every 702 homes, and Florida, with one in every 727 homes.

Within Maryland, there’s of course a wide disparity in foreclosure rates for different cities and counties. The five highest county rates within the state are Baltimore City, with one in every 287 homes, Prince George’s County, with one in every 357 homes, Charles County, with one in every 395 homes, Washington County, with one in every 457 homes, and Calvert County, with one in every 459 homes.

Meanwhile, Montgomery County has only in every 1,359 homes in foreclosure. Not only is that less than half the rate of Maryland as a whole, but it’s also better than the national rate. Still, digging into the city statistics, there are specific towns within Montgomery County that have far worse foreclosure rates, such as Barnesville, with one in every 89 homes in foreclosure, or Garrett Park with one in every 324 homes. That same level in disparity will be seen in other counties as well.

For homeowners who are facing foreclosure, there are many different potential courses of action to take. One may be to file bankruptcy before the foreclosure auction is completed. In this case, it may be possible to stop the foreclosure, and even to keep the home. Be sure to consult with an experienced bankruptcy and foreclosure attorney in your local area who will be able to instruct you on what’s possible, and provide you with the assistance you need.

Preparing for Foreclosure – Can Bankruptcy Protect You From Foreclosure?

What does bankruptcy do to a foreclosure sale?

Let’s take a look at what happens when someone files a bankruptcy petition. Immediately at the time of the bankruptcy filing, an automatic stay goes into effect. The automatic stay is governed by federal law specifically 11 USC ยง 362. There are some exceptions to what the automatic stay can and will stop. Most notably if the debtor has a pending bankruptcy that has been dismissed within 1 year prior to the new filing, the automatic stay expires on the 30th day after the new filing. If the debtor has had 2 pending bankruptcies within the past year, there is no automatic stay and the debtor must request one from the bankruptcy court.

So, if the debtor has not had a pending bankruptcy case within the preceding year, the automatic stay kicks in immediately at the time of filing. This is a very helpful tool to the debtor in many regards. First, the sale of the debtor’s home through a foreclosure auction is halted. Second, the stay allows the debtor time to regroup and project a path forward through their reorganization plan without the threat of having to worry about losing their home.

How do the mortgage company attorneys know to stop the sale after bankruptcy

After filing bankruptcy, the debtors creditors, which include the mortgage company, receive notice of the new filing. This alerts all creditors that an automatic stay may be in place and they should cease collection/legal activities.

What can mortgage company do to get out of the bankruptcy

If the mortgage creditor believes they have cause, the mortgage company may file a motion with the bankruptcy court requesting relief from the automatic stay. Primary instances where their motion will be granted are when the debtor does not maintain mortgage payments after the filing, the debtor does not put forth a reasonable or viable reorganization plan, or the debtor chooses Chapter 7 protection which does not have a reorganization component as with a 13.

Timing of bankruptcy filing

The timing of the bankruptcy filing and the foreclosure sale date are two dates to consider carefully. If the foreclosure has been listed with the court clerk’s office, the hard deadline to file a bankruptcy would be the sale date. If the debtor has not received notice of a foreclosure sale, the debtor may have more leeway as to the timing of their bankruptcy filing. If the debtor files after the sale has gone through, the likelihood of saving the property is slim however, issues with the sale could be raised to overturn the sale.

Foreclosure sale occurred and debtor did not stop it

If there is a deficiency created from the foreclosure of the debtor’s home, the debtor may face collection attempts for the deficiency amount. In this case, a bankruptcy could help the debtor deal with that new debt.

In summary, should the debtor file bankruptcy to stop a foreclosure

This question is one that cannot be answered because each person’s situation is going to be different. A debtor considering this option should seek counsel from a local bankruptcy attorney, most of whom offer free consultations. The best advice is to not wait until the last minute to look at your options so that the debtor can make the best decision for them and their family.

Selling A House In Foreclosure

When most people are notified by their lender that their house will soon go into foreclosure, they think all is lost. While it’s a difficult time, the good news is you do still have options that will not hurt you as much financially, such as a short sale. This will allow you to sell your home prior to foreclosure, with the bank getting all the proceeds from the sale. While it may not equal the entire amount of what’s owed, it will generally be enough to satisfy the bank, since it doesn’t want to spend time trying to sell the property and possibly receiving less money in the process. But if you’ve decided it’s time to sell your house quickly, here are a few tips to keep in mind.

If you have a home going into foreclosure due to a divorce, illness, relocation, inheritance, or other life event, always be sure to get your lender’s permission before going ahead with a short sale. By discussing your situation with them ahead of time, you’ll be able to show you’re not being irresponsible in repaying the loan, but rather have had extenuating circumstances occur that led to the current situation.

In these situations, don’t go it alone. Instead, hire a real estate professional to assist you. By doing so, they can help set a reasonable price for the property, answer any questions you may have, and even act as a buffer between you and your lender if necessary. This will be especially important if the current housing market is weak, since it may take a bit more work to find a buyer.

Once you’ve got a buyer willing to pay your asking price, meet with your lender. Since you’ll already have a buyer ready to take the property, chances are the bank will accept the bid, so long as it’s reasonable. As added insurance, be sure to inform the lender that if they reject the bid, foreclosure is inevitable, since this will give them extra incentive to give you their approval.

When you decide it’s time to sell your house quickly due to such factors as divorce or illness, make sure you get a promise in writing from your lender that they will not pursue a deficiency judgement against you once your home is sold. This would be the difference between what the property sells for and the remaining balance on the mortgage, if any. By knowing no legal action will be taken against you, it will be much less stressful to sell your home during what is already a difficult time in your life.

How Does the Nebraska Foreclosure Process Work?

In today’s economy foreclosures seem to happen everyday. By fully understanding the process you can have a better grasp of your situation and help you make the most effective decision possible. If you are facing a Nebraska foreclosure it is important that you understand some basics:

Nebraska has a Non Judicial process under power of sale and deed of trust.

The foreclosing party or bank must record a notice of default at least one month before receiving notice of sale and mail a copy to you with in 10 days. After thirty days expire, notice of sale is then published once a week for 5 consecutive weeks. Notice of sale must be sent to borrower twenty days prior to sale.

You may reinstate by paying the amount due to the lender within a month after redecoration of notice of default.

Deficiency judgments may be obtained by filing a separate lawsuit within 90 days of foreclosure sale.

Now that you’ve read the basics here are some reasons why homeowners may be facing foreclosure: Divorce, death in family, inheritance, job relocation, job loss. There may be many other reasons but these are the main ones.

Nebraska foreclosure starts when homeowners are unable to make mortgage payments. Then the bank sends out a notice that the foreclosure process has began. After the bank begins the process, usually it takes around 60 days, the house is reposed by the lender and sold for the balance that you owed on the property.

There are ways that homeowners are able to avoid the foreclosure but homeowners aren’t always able to steer clear. Once the process has begun there are although it may seem impossible to stop there are several ways for homeowners to stop foreclosure. You can go to the lender and ask the lender for a loan modification. This is simply asking the lender if you are able to pay less money for a shorter amount of time. It is negotiable depending on the lender and circumstances. Also you can pay the balance due within the time frame of the foreclosure sale before the home is repossessed and sold. Also you can pay the entire loan balance before the house is sold.

There are many reasons why homeowners may not want to be foreclosed on, but the main reason are loss of home and damaged credit. Although it seems stressful and impossible it cane be overcome.