8 Comon Foreclosure Myths that Cost Homeowners A Fortune

8 Common Foreclosure Myths that Cost Homeowners A Fortune

WARNING: Don’t even think of doing anything with your home until you read this letter. Which one of these misconceptions do you believe, and how much is it going to hurt you?

 

Some of these may even affect your ability to get a job.

Why? Many employers now require credit checks before hiring.

 

Common Foreclosure Myth #1

No Matter What I Do, I’m Going To Owe Money To Someone.

On most short sales the seller is able to walk away owing the bank nothing. Of course, it’s
all up to each individual bank, but eight times out of ten you can walk away owing nothing. A bank loses way less money on a short sale than a normal foreclosure. In return for you helping them out, they will help you out. Here is why there is this big difference between a short sale and a foreclosure.

On a short sale the utilities are turned on and someone is living in the house. A vacant house is way harder to sell. The buyer knows the home is bank owned and will adjust their offer down because of that. On a bank owned house, the house sits there for 6-9 months empty before it sells. The bank has to pay to keep it up and insure it. They can’t loan that money out and collect interest. Also, there is the liability if some kid goes into the house and gets hurt. Because of that the banks want to do short sales and are very willing to work with you.

 

Common Foreclosure Myth #2

A Foreclosure Will Go Off My Record In 3-5 Years.

Yes, you might be able to get a loan after five years but here’s the problem. When you walk away, the bank will come back and get a judgment for the money they lose, and also any money they have to spend. They’ll tack on attorney’s fees, late payments, interest, maintenance, lawn mowing costs, realtor fees, locksmith costs, title insurance, and all sorts of other fees. This judgment will stay with you until you pay it off.

Let’s say you owe $200,000 on your home and it’s now worth $170,000. According to a recent study, if you do a short sale the bank will lose 19%. But, if the bank takes the home back and waits for it to resell, they will lose 41%. That means you’ll owe them $82,000 on average. That is the judgment amount. This deficiency converts to a judgment, and judgments last up to 20 years in states like Florida.

Most of the time the bank itself will not come after you. The bank will sell the right to collect the money to a third party collection company. That company will then attempt to collect from you. Have you ever experienced the calls you get when you get behind on a credit card? Those people are vicious! They just keep calling and calling and calling. Not only that, but they will drag you to court and ask for all your financial information. They can force you to bring in your bank statements and information on any retirement accounts such as an IRA or 401K. And, if you don’t bring in this information, they can have a warrant issued for your arrest. You may have no prior criminal history, but you will after that.

The court gives judgment collectors a lot of ways to go after you. They can send the police to your house to grab anything valuable. Do you have a nice TV? They might take that. Is your car paid off? If it isn’t absolutely necessary for you to use to get to work, they can take that too. No one will give you a loan with that judgment on your credit. You might not even be able to get a cell phone.

The worst thing is that this debt purchasing company will be going after you for 10 or even
20 years. They will do whatever they can to collect what they think is “their money.” Even your current and future employment might be affected because many employers now require
credit checks.

 

Common Foreclosure Myth #3

A Short Sale Will Take 8-12 Months And Can Drag Out Even Longer.

This is the case when the person you are dealing with doesn’t know what they are doing.
Our short sales average 45 to 90 days. We do these every day… day in and day out. In fact, we have done over 100 short sales with banks ranging from Chase to Countrywide to Wachovia. The difference between dealing with someone who knows what they’re doing is like the difference between hiring a top dog lawyer for a lawsuit versus hiring your friend who isn’t a lawyer.

When we work with you we will handle everything and do all the work. All you have to do is provide us with basic documents and that’s it. We will call the bank, handle the negotiations, and keep you updated as to what’s going on.

Common Foreclosure Myth #4

Banks And Lenders Rarely Accept Short Sales.
We are able to get short sales accepted most of the time. Here’s why your bank may have already told you they will only take X amount. But, let’s say someone owed you a lot of money and they wanted to pay you only half of what they owe. What would you say? You’d probably tell them to pay you the full amount, right? But what if the person came to you with cash and showed you they just simply could not afford to pay you any more. Then what would you do? You’d probably accept whatever you could get right? Well, it’s the same way with a bank.

The banks often tell you they won’t take a short sale. The reason is because they want you to pay them the full amount. Or, they want to get you to agree to pay them monthly for the rest of your life. WE HAVE A 95%+ SUCCESS RATE!

 

Common Foreclosure Myth #5

A Short Sale Is No Less Damaging To My Credit Than A Foreclosure.

Fannie Mae and Freddie Mac don’t think so. These companies are the backers of more than half of the mortgage loans issued today. They even recently changed their requirements.

Fannie Mae only requires two years after a short sale before you can get a new loan. If you give the house back to the bank you have to wait for five years. Several new requirements now apply that can drag this out to seven years. This makes foreclosure more damaging than even a bankruptcy, which requires only a four-year waiting period.

 

Common Foreclosure Myth #6

ANY Real Estate Agent Or Investor Can Help Me Do A Short Sale.

If you sell with an agent who doesn’t know how to do a short sale, then you’re setting yourself up for failure. Everyone has heard the horror stories from the buyer who put an offer in on a short sale and then waited six months for an answer.

Getting a short sale approved requires your agent to follow a specific process. If they don’t know what they’re doing your short sale can drag out for months and months. This will cost you money because you’ll have less time to negotiate down the money you owed the bank for the loss. This could even cause you to lose the home to the bank because the short sale doesn’t get approved before they take it back.

Real Estate investors ONLY have their own interests at hand and NO ONE regulates them! WE HAVE SEEN COUNTLESS HOME OWNERS RIPPED OFF BY INVESTORS
WHO PROMISED THEM THE WORLD ONLY TO CAUSE THEM TO LOSE THEIR
HOME AND CREDIT.

Common Foreclosure Myth #7

We Don’t Have The Money To Pay An Agent A Commission.

You don’t pay our commission. Any money we make for the real estate sale comes out of the bank’s pocket. The banks know if they take the home back they will have to hire an agent to sell it. That makes them more than willing to pay an agent to sell the home today.

Common Foreclosure Myth #8

If We Only Pay A Little Each Month We Will Be Okay.

If you’ve looked at any newspaper articles, then you can see it might take a long time for the market to come back. Holding onto the home as long as possible is like dying a death of a thousand cuts. This is because the bank fees, attorney fees, late charges, and everything else will continue to mount up.

Slowly but surely, little by little, they just keep getting bigger and bigger (and you end up owing the bank a ton of money.). You MUST have something worked out with them that they will agree to… such as A Loan Modification or Forbearance.

Click here for a free report on 8 Foreclosure Options All Homeowners Should Consider.

Click here to have a Short Sale Specialist contact you.

WE CAN GIVE YOU FREE, HONEST ADVICE ABOUT YOUR SITUATION.

DON’T WASTE ANY MORE TIME! CONTACT US TODAY AT

901-591-8100

or email us at john@johnquinnrealestate.com

 

Contact Information

Photo of John Quinn Real Estate
John Quinn
RE/MAX Real Estate Experts
1930 Exeter Rd
Germantown TN 38138
901-685-6000
901-591-8100
Fax: 901-685-9090