Foreclosure .. a hot topic these days!

While we are not Attorneys, and do not offer Legal Advice, sometimes it's good to know just how the world really works.

The best bet is to avoid Foreclosure, through refinancing or sale. ARM Mortgages would have been a good step to Home ownership, had the owners refinanced before the rates went up. Adjustable Rate Mortgages offered artificially low interest rates to those with low Credit Scores or high DTI ratios as a way to Home Ownership. A couple of years of timely mortgage payments really help a Credit Score, and this allowed many to refinance into a better Mortgage. Others were not so fortunate.

There are a couple of web sites offering to help with refinancing of your current mortgage, we are offering them both for your review. The first is new, and offered by FICO, the people who devised credit scoring: www.mortgagereliefonline.com. They propose to offer counseling and tips to help you get refinanced. The second is brought to you by the federal government: www.makinghomeaffordable.gov. They claim to offer a fast track to refinancing via HUD. We have tried neither option, but if they can help, it is worth a try. Remember, however that quite often, when something is free, you get excactly what you pay for.CCFG offers an alternatve, Attorney based Loan Negotiation and Modification Services. To get to the free sites, copy and paste the sites into your browser, they are not clickable links.

If you are in an area of the Country where Values have held solid, and your Credit Score is good, you have a refinance option .. providing the Foreclosure Process has not progressed too far.

If you are still in your house, many Lenders will consider a short sale. This is where the lender takes less than the balance due, and writes the rest off, usually because Real Estate Values have declined in an area. The terms differ by lender, but usually they require the use of a Real Estate Agent to offer Comparable Sales and an estimate of the Market Value of your House. Some lenders write the balance off without recourse, others insist on recourse against the Borrower, leaving you potentially liable for the amount written off by the lender. If you have a First and a Second Mortgage, both Lenders must be parties to any short sale negotiations.. they both have interest in the property. This is why the interest rate on that second mortgage is higher than the first mortgage, they have a secondary interest in the property, and a higher risk.

Foreclosure involves a long process, ending in a Sheriff's sale or Auction. Many times the primary lender ends up purchasing the property to protect their interest, they then sell the property on the open market. Other times, the property actually sells to a third party, with the lender writing off the balance. The borrower is then charged the amount of that write off, along with any additional fees, much like an auto repo. Because there is no collateral to attached to, this becomes an unsecured loan, and can be subject to collection efforts.

What is a short sale? A short sale is when the lender (or lenders) agree to take less than the mortgage balance and still release the property for sale. This process usually requires a competent real estate agent to prove to the lender(s) involved that the property simply will not bring what the loan balance is. You usually also have to prove that you can o longer afford the property due to some change in your life. You may still be held potentially liable for the difference between the loan balance and the sale price, but is becomes an unsecured debt. The lender benefits because your house is not in their foreclosure inventory until it sells. They have enough inventory.

Deed in Lieu of Foreclosure: You offer to "hand over" the deed to the lender rather than them going through the foreclosure process. You always want a "no recourse" short sale or deed in lieu of foreclosure. "No recourse" means that the lender agrees not to chase you for the balance due after the sale. No Recourse is the only way you want to go!

How does a foreclosure hurt a credit score? Everywhere. The original mortgage had late payments, a major hit. Foreclosure, in many states requires a Court Order, that means a Public Record hit. Then there is the write off amount that becomes a collection. From a Credit Score standpoint this is a major challenge, but CCFG has dealt with it before, and we can do it again. Foreclosure does not have to hold you back for 7 years, let CCFG speed up the clock for you too.

We do not share any of your personal information with any outside source. CCFG Credit Repair will not sell your name, address, phone number, or email address to anyone for any reason. And we won't call you or send you an email every week to entice you to join up.

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