I wrote this article for a recent news release and thought everyone could benefit if I included it here. The Foreclosure epidemic coming into 2007 is looking worse than 2006 and it’s time for massive action from all corners of the arena. The numbers and statistics are what they are. Most of us already know that the signs are all there showing that 2007 is expected to be twice as horrific as this year and the Foreclosure rates are due to rise across the country. More Americans are losing their jobs especially in our once solid auto industry. Are we headed for an economic downfall or are we already there?
With the wealth of information and statistics flooding the market it’s surprising to see that homeowners are not preparing themselves a little better. A study recently conducted by the Center for Responsible Lending predicts that 1 in 5 subprime loans issued in the past two years will enter some stage of Foreclosure. These statistics will heavily impact 2007 statistics on the Foreclosure rate considering that subprime loans make up a quarter of all home mortgages. This will be an estimated $164 billion cost to homeowners.
In addition to subprime loans, another driving force is the housing market. Appreciation has come to a complete standstill in some states and some states are entering the negative zone. This is going to have a negative effect on the housing market as a whole and is only going to increase the number of foreclosures in the coming year.
With homeowners doing their homework on the Foreclosure rates and different loan types contributing to this increase, they are less willing to try these creative loans methods that were common in 2004 and 2005. Lenders are being warned to be more selective when reviewing the initial loan application to ensure that the homeowner can afford the loan 2 years from now. This Foreclosure epidemic is having a negative impact on the mortgage industry as well as all other real estate professionals that are not working in the Foreclosure arena.
Looking ahead and 2007 the Foreclosure rate is expected to double from 2006. With 1.4 million homes entering some stage of Foreclosure in 2006 that means that almost 3 million foreclosures are expected in 2007.
These predictions are grim to say the least. Not only for American homeowners grasping to their ”American Dream” but also for those real estate and mortgage professionals not offering Foreclosure prevention type alternatives. On the other hand there are some real estate agents and mortgage brokers that have realized that adding Foreclosure prevention type services is not only going to increase their bottom line but insure that these clients of their’s come back themselves and refer others as well. Diversity in the real estate and mortgage industry is a must coming into 2007. Without the ability and foresight to diversify, incomes for these professionals are going to feel a strong pinch in the coming years.
There are companies that offer partnership and/or training on Foreclosure prevention alternatives and they are seeing a flood of brokers and agents stepping up to the plate. In a recent interview with the president of Freedom Foreclosure Prevention Services,LLC, Jeff Segal, he stated “It’s not only imperative for mortgage and real estate professionals to add to their current services, come 2007 it will be absolutely necessary if they want to survive. In the past six months our company has developed a unique partnership program that works well for these professionals to offer services and actually experience relief in this economical whirlwind we have all been experiencing. If they have clients coming to their front door that are facing Foreclosure and they can’t offer a solution, they send these clients away and will never lay eyes on them again or their business. If they are able to offer a viable and ethical solution, even if they are just referring them to someone, they are securing that client’s raport, business and the most powerful advertiser still today - word of mouth referrals. It’s time they realized that diversification is going to be the life raft of 2007 for most of these folks.”
It is refreshing to know that there are still people out there looking out for the homeowners. Hopefully, in 2007, we will see more Americans helping Americans. It’s the only way to survive the market that lies ahead without losing sleep over possible unethical practices just to stay afloat.
When homeowners find themselves faced with a Foreclosure, mistakes are made that can cost them precious time. During a Foreclosure, time is the most valuable asset. If a homeowner acts in time they can prevent or stop their Foreclosure. In a recent article written by Tami Luhby, a reporter for Newsday, Tami wrote:
“Some people worry the bank will immediately foreclose, while others think their lender won’t notice, experts said. Many don’t want to admit to themselves–or others–that they can’t handle their bills. In fact, this is the worst thing a distressed homeowner can do. Not only are you increasing the risk of Foreclosure, but you could wind up owing thousands of dollars in interest, penalties and legal fees, experts said.”
The best thing to do is explore your options. Homeowners that are facing Foreclosure typically fall into two general classifications. Either the homeowner is looking to stay in the home and is ready to negotiate with the lender for a solution or the homeowner is looking to sell. Now, in either category a homeowner needs to find a professional or Foreclosure specialist that can assist them.
The best thing to do is explore your options. Homeowners that are facing Foreclosure typically fall into two general classifications. Either the homeowner is looking to stay in the home and is ready to negotiate with the lender for a solution or the homeowner is looking to sell. Now, in either category a homeowner needs to find a professional or Foreclosure specialist that can assist them.
Obviously if a homeowner is looking to sell they need to get the house sold as quickly as possible. My recommendation has always been that they should consult a real estate agent or an investor and explore their options for the home that is in some stage of Foreclosure or preforeclosure. There are many different ways to approach the selling of this home depending on a few variables such as time, financial position, state and equity. Depending on where the home is in the Foreclosure stage, the options may be limited. However there are still options. In addition, you want to have someone that is working for you and not just his or her personal gain on the deal.
Now, for a homeowner that is facing Foreclosure and wants to stay in their home it is very important that, once again, they act as quickly as possible. Most homeowners, depending of course on the exact situation, don’t need to have money saved up to simply become proactive and seek help. The first key is to explore what options are available to the homeowner given their exact situation.
Many people debate about what options should be utilized. Obviously an investor is going to tell you that your best option is to sell. A private lender is going to tell you that a Foreclosure bail out type loan may be your only option. An attorney will tell you that bankruptcy is your best option.
Keep in mind that from their perspective those are the best options. Not only does it get you out of the Foreclosure, but also it pays them handsomely as well. This is what I want to point out. If you file a bankruptcy it will remain on your credit for 7 to 10 years, and it will negatively affect all aspects of your life. Take heed when considering each option and weigh the consequences as well as the benefits. Depending on your financial situation a Foreclosure bail out loan could be an option.
In past experiences, working in the Foreclosure industry, there have been homeowners that only qualified for a Foreclosure bail out type loan. In these circumstances, it was their only option aside from losing their home. With our company, we will not approve you for loss mitigation or any other option unless the finances are stable enough to support the payment.
Another option is negotiating directly with a lender when dealing with a Foreclosure. Now certainly, as many will tell you, homeowners can negotiate themselves. However, I can also tell you, from professional experience in this industry, that the lender, most times, won’t offer a homeowner as feasible a deal as they will someone who negotiates for a living and someone who knows all the programs available for a homeowner and deals with these particular lenders on a daily basis.
Whether to attempt this yourself or put your home in the hands of professionals is a point you will hear argued a lot and mostly by people in the fields I have listed above. Let me point out the most obvious problems with negotiating with the lender yourself.
Problem 1: Most lenders use scare tactics when making contact with the homeowner. Usually, when in Foreclosure, the first person the homeowner hears from is the lender’s collection department or a collection agency. This seemingly pushy and unsympathetic individual on the end of the other line is earning commissions for how much they collect upfront. They are not interested in your personal situation; they are interested in how big their paycheck will be.
Problem 2: If you do get passed this person and in the hands of someone who can work with you more liberally, they are still not concerned with your personal situation. Keep in mind that Foreclosure is a common occurrence these days. The person you are talking to at this point in the game has seen hundreds of cases just like yours and has developed a lack of empathy and understanding.
Problem 3: The most important factor is the homeowners experience in negotiating. Let me ask a simple question. Would you rather negotiate to save your home yourself, without any prior experience in this situation, or would you feel more comfortable putting your future and your most valuable asset in the hands of someone who is a trained professional and has an impressive track record.
With the right professional working for the homeowner, these professionals are using a combination of the individual’s hardship, financial situation and their experience in the field of foreclosures. In addition to choosing someone who has extensive experience in the Foreclosure industry, a homeowner also wants someone that has a variety of options for them should they not qualify for loss mitigation.
Bottom line, the homeowner would do themselves a great justice by finding a company that will truly work for them and their best options given their financial position and situation. If you find a company please do yourself a service and check with the BBB by going to http://www.bbb.org/. You can search by company name and then do an additional search using google or yahoo. Some of these companies popping up are forming multiple companies to escape their tarnished BBB record and/or history. Do your research before making a decision but act fast for your sake. Foreclosure can be a scarey thing but you don’t have to go it alone.
Now in all fairness I do work with a Foreclosure prevention company as an Independent Certified loss mitigation Consultant. Not only does this company have a high ethical standard and squeaky-clean record but also their support and compassion are second to none, both for the homeowner and the loss mitigation Consultants in the field. If you are facing a Foreclosure situation please visit us today at http://www.cfreedomforeclosure.com/ and take advantage of our free no obligation application to find out if you qualify. We are here to help! One of our consultants will call you within 24 hours.
If you are interested in starting an exciting career in the Foreclosure industry than you have found the right company. All you need is a strong desire to help homeowners and the will to succeed. We are looking for qualified individuals that don’t mind working nationwide from home to help stop the Foreclosure epidemic and ultimately save “The American Dream”. You can certainly do your due diligence and research on our company as well. If you are interested please visit my website at http://www.cfreedom.net/ and I will contact you within 24 hours. Mostly remember to explore all your options. If someone tells you that you have only one option than I would question their motives.
Copyright © 2007 Creative Freedom, Inc. You may reprint this article providing that this copyright notice and resource links all remain intact.
