If you are like many Americans today, you will be worrying if you will one day have to face a mortgage foreclosure. There are ways to prevent from losing your home and in turn your life and everything you have worked for. The organization called Twin Cities Habitat for Humanity Mortgage Foreclosure Prevention Program (MFPP) for example, is one of the organizations that help people facing a mortgage foreclosure save their homes. One of the most important things they stress is to know the law and to know your rights. Many people take for granted whatever their bank or lending institutions tell them concerning a mortgage foreclosure. The lending institution will tell them that once the post has been made to the sheriff’s office they must leave the property immediately and thus leave their hopes and dreams behind. Such is not the case in certain states across the USA.
Foreclosure redemption period
Some states, such as Illinois and Minnesota have a redemption period where a homeowner can still hold on their home and thus avoid a mortgage foreclosure if they can make good on what monies are owed to bank or other lending institution. The grace period for will vary from state to state ranging from 3 days to six months.
If you live in the state of Minnesota, for example, you may be able to clear up your back payments in the six months period that they allot before completing the mortgage foreclosure and losing your home. Any prudent homeowner would be wise to check into their state laws and find out if their state carries a foreclosure redemption period and how much leeway will this period allot them for coming up with the payments in arrears.
It is also important to note that where the redemption period is placed can also make a difference to how your particular mortgage foreclosure will affect your life. Though the redemption period is always before the eviction, some states make it easier by placing the redemption period before the sale while others allow a redemption period only after the sale. The later causes more complications. If the house is sold, the added worry of dealing with the new owners is very stressful on already worried homeowners, who may feel that all is lost and must leave the premises at all cost. Do not let the new owners harass you and tell you that you must leave the premises immediately so that they can move in. If you live in a state that allows the redemption grace period after the sale, they cannot forcibly evict you by law. You are the one who is protected by law. You do not have to leave the property immediately! You can use the entire time allotted by the redemption period to try to come up with the funds, or if you know you cannot do that, you can take that time to find yourself suitable housing accommodations.
Thus the redemption period in your state provides two benefits. First and foremost it will give you time to try and save up to meet the back payments in full, negotiate a repayment plan or try for a loan through a foreclosure bailout. In certain circumstances you can even sell your home yourself to get from under the financial burden.
The second benefit is the extra time to get your life back in order. You will need to make your moving arrangements, finding affordable housing within suitable neighborhoods where your children can go to school and walk the streets safely, clear up some old debts, look for work if you are planning to move far away, It gives you time to make contacts and find resources to help you get back on your feet. Don’t let miss this magnificent opportunity of a redemption mortgage foreclosure period to work to your advantage.
One of the different types of government owned property is a HUD Foreclosure. The homes offered through the HUD foreclosure procedure is offered to low and medium income families but you must qualify to receive them. The general public must already be accepted for a loan to bid on these HUD Foreclosure homes. Though anyone who meets the loan requirements can qualify for a HUD Foreclosure home, the Department of Housing and Urban Development (HUD) will give priority to prospect homeowners who intend to live in the houses they purchase. They also give priority to teachers, emergency technicians, law enforcement officers, and firefighters in order to relocate to neighborhoods being upgraded by the HUD Foreclosure program.
When you purchase a HUD foreclosure home you are purchasing the property in whatever shape it comes in. However, the HUD foreclosure program offers relief by pricing the homes very low, helping with financial aid for purchasing and closing costs, and helping with the cost for repairs. Since HUD foreclosure homes are sold at auction, the financial aid that you require for purchasing and for the upkeep of your home will be added to the bidding price.
In order to participate in a government HUD Foreclosure auction you will need to show a letter of loan preapproval from your issuing bank. This letter should be valid for a period of sixty days. You should give the pre-approved letter to the real estate agent that has been authorized as a qualified government approved lender. You can find HUD foreclosure home auctions listed by state http://portal.hud.gov/portal/page/portal/HUD/i_want_to/avoid_foreclosure at their government website, or you can get the listings through the authorized government real estate agent who will actually be doing the bidding for you as well. The real estate agent may have other helpful HUD foreclosure information to give you in addition to the auction information.
By looking into the previous HUD foreclosure sales, you will have a better idea of the condition and type of property offered in your area as well as the usual bidding prices.
Boosting your ability to procure a conventional bank loan
Even though the HUD, which is the Department of Housing and Urban Development, does not issue the loans to obtain these houses, what they will do is insure the lender against default of payment on your part. Being backed up by government money will put the bank more at ease and in turn they will be more willing to offer you a prime loan with minimum down payment and a less than perfect credit rating. They know that if you default the government will pay the loan in question.
In turn, the bank will issue an appraisal for the home you are intending to buy to make sure it meets minimum housing standards, for both house and HUD purposes, it is marketable (not all homes are in a condition in which they can be sold such as condemned property) and it will most importantly give you and estimation of the value of the home. This procedure said to benefit the lender will also benefit the borrower in the sense that it gives you a guideline for bidding purposes. However, borrowers also need to have a home inspection done to know how much their new property is worth when factoring in such things as fixer up costs; refurbishing, repairs, maintenance and add on costs.
HUD foreclosure homes are a profitable investment for the homebuyer even when you factor in the costs for repair. These houses are sold well below market price to account for the repairs that will be needed to upkeep the property.
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