Some second HELOC liens can be recourse loans, meaning if the home goes to foreclosure you may still be personally liable for the full amount of the loan. It is very important that you have a short sale professional working on your preforeclosure that knows not only the process of the short sale, but also understands the many different situations involved with loan types. If you or someone you know is struggling with their mortgage and does not know what to do, please contact Texas-Short-Sale for a private no cost evaluation and option plan for your specific situation.

CNN – 10 cities

New York – Median price: $435,000 – Foreclosure rate: 1.08%

The New York area has the lowest foreclosure rate of any of the nation’s 10 largest metro areas. There three good reasons for that: Prices have always been high, and they have only fallen about 13%, according to the National Association of Home Builders (NAHB) housing index; many area residents rent rather than own; and a large percentage of owners are either in condominiums or co-operative apartments.
Los Angeles – Median price: $320,000 – Foreclosure rate: 3.34%

If L.A. markets didn’t exactly bubble, they were certainly in a froth, with prices so high that many people resorted to dangerous loans in order to buy. When these adjustable rate mortgages reset and the economy tanked, many people could no longer afford their payments, sending foreclosures soaring.
Chicago – Median price: $210,000 – Foreclosure rate: 3.68%

The great Midwestern metropolis was a relatively steady housing market performer all during the boom-bust cycle. Prices never got too high — they’ve fallen just 17% since late 2006 — and the bust has not wiped out much home equity, so there are few homeowners underwater. The area economy did stumble during the recession, with unemployment rising into double digits. As a result, most foreclosures here were job related rather than being tied to bad mortgages.

Dallas – Median price: $164,000 – Foreclosure rate: 1.72%

Texas cities have been among the nation’s most stable housing markets, boasting very affordable prices, continued new development and little price volatility. The economy has helped: The city’s unemployment rate is about a point below the national average, as is the state’s.

Philadelphia – Median price: $230,000 – Foreclosure rate: 1.54%

The biggest housing market handicap for Philadelphia is its old manufacturing economy, which has shed thousands of jobs over the past decade. The unemployment rate has held steady at 8.6% over the past year, and the local economy hasn’t been creating new many jobs to absorb those workers. As a result, population has grown by less than 5% since 2000, barely more than a third of the national average.

Houston – Median price: $150,000 – Foreclosure rate: 1.61%

Like Dallas, Houston has enjoyed strong population growth and steady economic progress. Its residential construction industry also benefits from a relaxed regulatory environment and cheap land for building. Prices never went through any huge run-up in Houston, either. The median Houston home now costs $150,000, more than 15% below the rest of the nation, according to the NAHB index.

Miami – Median price: $126,000 – Foreclosure rate: 7.08%

Florida’s biggest metropolis got caught up in housing fever as few other housing markets did — and it’s paying for it now. During the boom years, home prices more than doubled and thousands of new communities and condominiums were built. However, not all of those projects were finished before the bubble burst. Instead, those units came open in a real estate wasteland, with few buyers and tons of foreclosures to compete with. Having that level of supply available has sent Miami’s median home price plummeting by 60% from the peak.

Washington DC – Median price: $306,000 – Foreclosure rate: 4.42%

There’re few sweeter employment spots in the present economy than Washington, D.C., which has prospered with thanks to a growing population and the most highly educated work force in the nation. The boom did send housing markets on an unsustainable path, however. By late 2006, the median home price in the D.C. metro area had surpassed $400,000. They’ve since come back to Earth, losing about 25% of their value.

Atlanta – Median price: $143,000 – Foreclosure rate: 2.04%

Most of the foreclosures in Atlanta spring from the recession. With unemployment rising — at 10.3% in November, it was up 0.3% from last year and about a point above the national average — many out-of-work Atlantans are having trouble paying their bills. That shows up in the area’s foreclosure rate: One out of every 23 households received a filing in 2010.

Boston – Median price: $307,000 – Foreclosure rate: 1.24%

The housing market heated up in Boston before just about anyplace else. Home prices more than doubled over six years before peaking in mid-2005. The median price has dropped about 20% since then. Because Beantown is hemmed in by the harbor and by other smaller cities near its margins, land to build on is in short supply, making new homes expensive and buoying the market for existing properties.

In Texas, lenders may foreclose on deeds of trusts or mortgages using either a judicial or non-judicial process. What is the difference?

JUDICIAL FORECLOSURE
The judicial process of foreclosure involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Usually the court declares a foreclosure and the property will be auctioned off to the highest bidder.

NON-JUDICIAL FORECLOSURE
The non-judicial process of foreclosure is used when a power of sale clause does exist in a mortgage or deed of trust. This “power of sale” clause is in the fine print of the deed of trust or mortgage. The borrower pre-authorizes the sale of the property to pay off the balance on the loan in the event of a default. The power given to the lender to sell the property may be executed by the lender or their representative, known as a “trustee.” This is typically the situation we see, and there are guidelines for a Power of Sale foreclosure. I have listed them below:

1. Texas law states the lender must mail the borrower a letter of demand, informing the buyer they have 20 days to pay the delinquent payments or the foreclosure proceedings will start.

2. At any time after the borrowers 20 days have expired, but at least 21 days before the foreclosure sale a foreclosure noticed must be filed.
A. Filed with the county clerk
B. Mailed to the borrower at their last known address
C. Posted on the courthouse steps

3. The foreclosure must take place on the first Tuesday of the month, (even if on a holiday) only if the prior preliminary notices have been given. The sale will take place on the courthouse steps by auction, to the highest bidder with cash. Anyone can bid, and the lender will bid by canceling out all or some part of the balance of the note.

An important note…..
Lenders may obtain deficiency judgments, but are limited to the difference between fair market value of the property at the time of sale and loan balance at the time of default.

Do you or someone you know owe more on their home than what it is worth and don’t know what to do? I am happy to talk about the many options of avoiding foreclosure through Texas-Short-Sale.

Please remember not to be embarrassed about your situation, create a compelling letter that is accurate, and also make your intentions clear. Use the hardship letter as evidence for the lender to accept your short sale, it can make or break your deal.

The physical letter is always better handwritten as long as it is legible. The top of the letter should have borrower name, date, lender and loan number. The length of the letter is not important, just as long as it has its desired impact. The letter should be blunt and honest and ask for forgiveness. This is not the place to complain, point fingers, or beg. It might start like this, “I regret having to write this letter, but unfortunately due to our financial hardship we are no longer able to pay on our mortgage. We ask that based on our current inability to make payments that you consider working with us to find a better solution with a short sale.”

The bulk of the letter is explaining to the lender why they cannot make their payments. Reasons to motivate the bank are, family death or illness, job loss or relocation, divorce, etc.
Finally, I will review the letter to make sure that details were not added that might hurt their case, or details omitted that would help.

mark@texas-short-sale.com
214-586-8685

Currently, borrowers who have completed a deed-in-lieu must wait four years to apply for a loan that Fannie will purchase. Home buyers who go through foreclosure must wait five years.

All these waiting periods can be reduced further, if the potential buyer can show extenuating circumstances. “We are beginning to think about post-recession, how you address borrowers who became unemployed through no fault of their own … and now deserve the right to re-enter the housing-finance system,” said Federal Housing Association Commissioner David Stevens.

Source: The Wall Street Journal, Nick Timiraos (04/26/2010)

One thing to remember if you are considering bankruptcy,  it will only postpone the  foreclosure.  A bankruptcy creates a stay, which stops all litigation.  While it is true the property cannot be foreclosed while in bankruptcy,  once you come out you will lose your home. 

Your probably filing either chapter 7 or 13.  Chapter 7 is a total liquidation while a 13 is a repayment plan.  

If the house is included in the chapter 13 bankruptcy, it can be sold with the permission of the court, especially if it is determined there is no equity.  Remember the only way to save your home through bankruptcy is through a repayment plan in chapter 13, and that is if and only if you make all of the trustee payments, including the mortgage.  Now the success rate of this is about 3%.

This is a huge and complicated decision, and depending on the circumstance can be a wise and calculated move.  The best option is to short sale the house, remove the debt, and potentially avoid bankruptcy all together.  I’ll speak about this more in future posts.