As we all probably witnessed, the 2007 Real Estate Word of the Year, had to have been 'Foreclosure'.
Even though the 2008 year's predictions show the market may stabilize, statistics show that one out of 95 home owners here in Florida will have to come to terms that the possibility of foreclosure is creeping up and something will have to be done to avoid it.
For those of you who bought a home in the last few years and are a part of the subprime lending category receiving an adjustable rate (ARM), your loan terms will be up soon. What is the cause and effect of this? Higher interest rates yields higher payments yields stress about being able to afford the new payments.
The prime target for this cause and effect will be the home owners that still have credit issues and think that they do not or will not qualify to refinance their home.
So what can you do to avoid the possibility of foreclosure?
Be proactive!
If you are proactive about your potential situation, the less likely you will have to deal with the torment and embarrassment of the foreclosure process.
How can you be proactive?
Talk to your lender:
First talk to your lender to see what options are available to you. You never know what they will be willing to do to keep your business. Essentially, they want people, not homes. It cost them more money to follow through with the legal process of taking your home than working with you to try to avoid the foreclosure.
Some of the options that lenders may give you are:
* Partial Reinstatement - lenders will allow you to make monthly installments of your past due amount on top of your regular mortgage payment.
* Short-term Forbearance - lender may suspend your payments for a few months or reduce for payment for a period of time and then set something up like what was is stated above to pay the amount owed.
* Long-term Forbearance - lender may suspend payments for up to 12 months and then set up a repayment plan like what is stated above.
* Loan Modification - lender may modify the terms of the loan by either cutting the interest rate or extend the payment period.
* Refinance - lender may give you the option to refinance your loan if you have equity built up and a descent credit score.
* Deed-in-lieu of Foreclosure - (this will affect your credit score) lender may be willing to let you sign the deed of the property to the bank giving up your home and them forgiving the money you owe them.
* Short Sale - (this will affect your credit score) lender may allow you to perform a short sale if the situation and conditions are right. Short Sales are an intensive process that should be handled by a Realtor who has experience in dealing with the Banks and Lenders.
Short sales have become more financially manageable these days with the new law that has been passed called the Mortgage Forgiveness Debt Relief Act. This law eases the tax burden for home owners who had debt forgiven on a mortgage due to a short sale. Now, any debt that has been forgiven from a mortgage company will not be taxed.
Sell your home:
* Sell by REALTOR - If you know the clock is ticking and the time is coming for your interest rate to adjust, or you just can't afford to make your payments any more, contact a REALTOR to see what they can do to get your home sold fast. Selling your home, especially if you have equity built, will always be your best choice.
* Sell to an Investor - If the seller's market is bad in your area and you need to sell your home fast, find an investor to buy your home. The only downfall to this is that you will more than likely take about a 20% hit to the value of the home. But if you have enough equity built up, this may not be a bad idea.
You could also ask an investor if he/she would be willing to buy the home and lease-purchase it back to you. Basically, the investor buys your home, leases it to you with the option to buy the home back at the end of a set term. This is especially helpful if you have children that are still in school. This way, you won't have to leave the area and disturb their education.
So there you have it. There are several ways that you can avoid foreclosure listed in this article. You just have to be aware of your situation, be honest about your situation and lastly, be proactive.
Get on the phone today... find out what your options are... and let's try and make a difference in 2008's real estate conditions.
The F Word Recipes
In my book A First Serving of Milk & Cookies For Success, I devote eight pages—nearly 3,000 words—to this topic (you can read the whole thing at the link below). Why? Because as Brian Tracy points out, “The fear of failure is one of the most powerful inhibitors of all human actions."
You don’t know who Brian Tracy is? Well you might have heard of Jack Lemmon: “Fear of failure will absolutely destroy you. You walk down the middle of the street. You never take any chances. You never go down the little side streets. You look at them and say, ‘That looks interesting. But I don’t know that street. I’ll stay right here and just walk this straight line.’"
One of my main reasons for writing that book (and the articles) is to kick people in the seat of their pants—or skirt as the case may be—so that they TAKE ACTION, so that they just DO ‘IT’! (whatever ‘it’ is that their heart desires to do). And all other things considered, the fear of failure—being rejected, made fun of, losing face, their money, and other people’s money—might very well be their number one reason, or excuse, for not going ahead with ‘it’.
My goal in those eight pages in the book (and in this article) is to sell you on the idea that failure is NOT an “F" word. For that purpose, I’ve enlisted the help of some celebrities and luminaries. Like best-selling author Robert J. Ringer who agrees wholeheartedly: “Failure doesn’t mean that you’re a loser, just that you’re not afraid to stick your neck out and take your licks, and that you haven’t quite made it, YET."
Anthony Robbins—in his book Awaken the Giant Within—said it better than anybody I know. Here’s what he wrote, in a nutshell: “One of the strongest beliefs shared by all successful people is that there is no such thing as failure. There are only results."
No Failure—Only RESULTS!
Some years ago, the Gallup Organization completed an extensive survey involving 1,500 very successful North-Americans in which they asked them how they accounted for their achievements. The reason given by most of them was that they thought that they had higher than average levels of common sense.
One of their definitions of common sense was the ability to have experiences and to learn from those experiences, particularly the negative ones—a.k.a. failure to unsuccessful people—and to apply what they had learned to subsequent undertakings. As a result, they said they became progressively better and eventually, leaders in their chosen field.
And that applies to ANY field of endeavor—be it entertainment, the cookie business, or literature:
“I’ve always grown from my challenges, from the things that didn’t work out. That’s when I’ve really learned." Carol Burnett
“Humans aren’t perfect. We all make mistakes. We’re all in a state of training, a state of becoming—becoming a better worker, a better student, a better parent, a better spouse, a better friend, or a better person. When we stop making mistakes, we stop learning and growing. Mistakes are the process through which we in turn create success. Mistakes create the foundation for our life. That foundation is experience, which in turn creates the light that leads us into our future. That light is called wisdom."
Wally Amos (aka Famous Amos—once the king of the chocolate chips cookies)
“If you write a hundred short stories and they’re all bad, that doesn’t mean you’ve failed. You fail only if you stop writing. I’ve written over two thousand short stories; I’ve only published about three hundred and I feel I’m still learning. Any man who keeps working is not a failure. He may not be a great writer, but if he applies the old- fashioned virtues of hard, constant labor, he’ll eventually make some kind of career for himself as a writer."
Ray Bradbury (best-selling author many times over)
And from Mr. Bradbury, one of the key quotations displayed above my computer that are like guideposts to me in my life—personally, and professionally:
“First you jump off the cliff, and you build your wings on the way down."
You know, in many sports (like baseball, football, hockey, soccer, and particularly basketball) all you need to do to win is to score just ONE more point than the other team. You have to ‘succeed’ (score a point) just one more time than you ‘fail’ (allowing your opponents to score). Like that local basketball team did on December 12th 1999 when they played a team visiting from Toronto, and ‘failed’ to the tune of 135 points. However, they won the game because after all was said and done, they had ‘succeeded’ in that they scored 136 points! And many times, it’s that way in life too, as this Japanese proverb states in the second sentence of my closing quotation:
THERE ARE NO ‘FAILURES’!
THE SECRET TO SUCCESS IS TO GET UP ONE MORE TIME THAN YOU FALL DOWN.
Both Carey Frankel & Daniel St-jean are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Carey Frankel has sinced written about articles on various topics from Real Estate, Kitchen Home Improvement and Real Estate. The is a regional favorite and leader of real estate. We are organized, efficient and take advantage of the technology available to u. Carey Frankel's top article generates over 12100 views. to your Favourites.
Daniel St-jean has sinced written about articles on various topics from Advertising Guide, Personal Finance and Networking. “Your income will never exceed your personal development" a guru wrote. Want to be a better salesperson? First you ought to become a better person. You’ll find many more helpful personal (and professional) development articles on this website:. Daniel St-jean's top article generates over 12100 views. to your Favourites.
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