How to Avoid Foreclosure

Good, sound advice from this real estate professional.

This guy must be working for the NAR because he is spouting the same drivel. His point about this housing situation being "not as bad as the one in the 90s" makes no sense. It is far worse because it involves millions of dollars of mortgage fraud, much higher foreclosure statistics and more that 1.5 million to reset in March '08, a very serious credit crisis, extremely low savings rates and the highest amount of personal and government debt, mortgages that have been bundled into portfolios and sold on Wall Street that are completely illiquid, and market values down 40-50% in some areas, a falling dollar, rising gold and oil prices, etc, etc, etc....
This is a very different time than we have ever experienced before and this "investor" is irresponsible in advising the average person to step up and buy in this market. That may be good advice in some markets but not in the majority of them. In addition to the fact it is very challenging to acquire a loan in this market without nearly perfect credit.
He is correct that homeowners need to contact their lenders if they get into trouble in order to try to work things out. However, the truth is that many lenders are overwhelmed with phone calls and are notoriously unhelpful with work out plans. Better advice would be to contact a local consumer credit counseling service (a free one!) who is familiar with the process and can actually help negotiate with the lender and advise the homeowner ways to live on a budget so that they do not repeat the problem.

Video was a little simplistic for such a complex problem. Not sure if this was how to stop foreclosure or how to play the market on a downturn. Comparing commercial versus Residential scenarios of "walk away to fight again" misses point completley. Homeowners who LIVE in the house being foreclosed on are walking away from more than a DEAL. Freinds, neighbors, schools, and a community are harder to say what the Heck, than an office building gone bad. Having worked on a few preforeclosure workouts the main focus should be to talk to the mortgage company directly. Your broker or loan originator will not be able to help you because they don't have access to the decision makers. Call the loss mitigation division of your mortgage company and ask them for a workout package. Convince them you will do whatever it takes to SAVE your house from Foreclosure. In talking with investors that specialze in handling the Pre-Foreclosure market many tell me that the banks and mortgage companies are making deals like never before.

If that doesn't work ask them to give you time to sell it. They will be very interested in helping you make that happen as it saves them money on legal expenses and holding costs and gets the NON PERFORMING ASSETT of the books faster than a foreclosure . It also helps your credit profile since it is a sale. Short Sale if you need to so as to move the house. A Short Sale will ding your credit but not like a Full Blown Foreclosure. If you choose the Short Sale approach contact your attorney for legal advise and make sure you get info on the possibility of lender recourse for repayment of the discounted amount. Tax consequences must also be addresed in a Short Sale.

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mortgage fraud, much higher foreclosure statistics and more that 1.5 million to reset in March '08, a very serious credit crisis, extremely low savings rates and the highest amount of personal and government debt, mortgages