Mangled Mortgage: Everything you need to know about foreclosures, short sales, and loan modifications.

Mangled Mortgage: Everything you need to know about foreclosures, short sales, and loan modifications.

The madness of an overheated real estate market has created some severe consequences. In addition, the current economic conditions in the United States have forced many homeowners into dire financial situations.

The result is a record number of homeowners losing their homes to foreclosure, while many more are dangerously close to the same fate. During the recent housing boom, people purchased homes they could not afford with “creative” mortgage products. Others bought homes with little or no money down and now have thousands of dollars in negative equity. When homeowners get themselves into financial situations they can no longer sustain, there are only a few possible outcomes.

One outcome is foreclosure. This is when the homeowner defaults on payments and the lender repossesses the house. It is a lengthy and expensive process and is supposed to be a last resort. Properties reclaimed by the lender are called REO properties, which stands for real estate owned.

Another possible outcome is a short sale. This is when the lender allows the house to be sold for less than the mortgage balance. This is becoming increasingly common as the housing crisis continues to grow.

A third possible outcome is a loan modification. This is when the lender agrees to alter the terms of the loan to make it affordable for the homeowner. It is designed so the homeowner is able to keep the property and continue to pay the mortgage every month.

A fourth outcome is when the homeowner continues to pay the mortgage as agreed, even though the house is worth less than the mortgage balance. Every borrower agreed to this situation in the first place, but in many cases this has been lost in translation. There was no guarantee that the value of real estate was going to continue to climb forever, and it is ludicrous to think it would. For some reason, ever-increasing value was the prevailing belief and now the housing market shows the aftermath of that faulty thought process.

The housing crisis in the United States has gotten severe enough to cause numerous bank failures. Some of the biggest mortgage lenders have shut their doors or been acquired by more stable companies. The number of mortgages in default has caused many banks to close, and several hundred more are on the "watch list."

Because of the enormous strain on the banking system in the United States, the federal government recently passed a $700,000,000,000 relief package that was designed to stimulate a more stable lending situation and restore consumer confidence. So far, the recipients of the bailout money have used it to acquire their smaller and less-stable competitors instead of using it to make more loans.

For savvy real estate and mortgage professionals, this is arguably the biggest career opportunity of your lifetime. It takes extra effort and skill to put a transaction together, and the less-than- serious industry professionals are leaving the business in droves. There are fewer transactions happening and each transaction is complex, so the true professionals are seizing the opportunity and getting deals done.The madness of an overheated real estate market has created some severe consequences. In addition, the current economic conditions in the United States have forced many homeowners into dire financial situations.

The result is a record number of homeowners losing their homes to foreclosure, while many more are dangerously close to the same fate. During the recent housing boom, people purchased homes they could not afford with “creative” mortgage products. Others bought homes with little or no money down and now have thousands of dollars in negative equity. When homeowners get themselves into financial situations they can no longer sustain, there are only a few possible outcomes.

One outcome is foreclosure. This is when the homeowner defaults on payments and the lender repossesses the house. It is a lengthy and expensive process and is supposed to be a last resort. Properties reclaimed by the lender are called REO properties, which stands for real estate owned.

Another possible outcome is a short sale. This is when the lender allows the house to be sold for less than the mortgage balance. This is becoming increasingly common as the housing crisis continues to grow.

A third possible outcome is a loan modification. This is when the lender agrees to alter the terms of the loan to make it affordable for the homeowner. It is designed so the homeowner is able to keep the property and continue to pay the mortgage every month.

A fourth outcome is when the homeowner continues to pay the mortgage as agreed, even though the house is worth less than the mortgage balance. Every borrower agreed to this situation in the first place, but in many cases this has been lost in translation. There was no guarantee that the value of real estate was going to continue to climb forever, and it is ludicrous to think it would. For some reason, ever-increasing value was the prevailing belief and now the housing market shows the aftermath of that faulty thought process.

The housing crisis in the United States has gotten severe enough to cause numerous bank failures. Some of the biggest mortgage lenders have shut their doors or been acquired by more stable companies. The number of mortgages in default has caused many banks to close, and several hundred more are on the "watch list."

Because of the enormous strain on the banking system in the United States, the federal government recently passed a $700,000,000,000 relief package that was designed to stimulate a more stable lending situation and restore consumer confidence. So far, the recipients of the bailout money have used it to acquire their smaller and less-stable competitors instead of using it to make more loans.

For savvy real estate and mortgage professionals, this is arguably the biggest career opportunity of your lifetime. It takes extra effort and skill to put a transaction together, and the less-than- serious industry professionals are leaving the business in droves. There are fewer transactions happening and each transaction is complex, so the true professionals are seizing the opportunity and getting deals done.

Price:


Similar Posts:

Comments on this entry are closed.