I am retired teacher and know nothing about how to buy bank owned or reo property. Is it best to still go through an agent? Do I go to the courthouse steps? Any ideas? I would be interested in other townships.

I purchased a home nearly 2 years ago with a 100% financing with 2 loans for $365K in Northern California. I have a 1st 80% and 2nd 20% from the same lender, both loans closed on the same day, never refi the loans and the 2nd 20% loan is not a HELOC. The properties comparable to my house around my neighborhood now sold for $265k-$280k so in that respect, I’m very upside down. To make long story short, I’m having difficulties paying my mortgage and here’s my question: If I foreclosed on the property, the bank would lose about $80k-$100k. If I go with short sale, assuming the bank approves it. It would still only be selling around $265k - $280k at the most, I’m 90 days late on my mortgage and I realized this might be a good time to negotiate with the bank since I might be able to leverage the current market turmoil situation to renegotiate the terms. What are chances the bank are willing to forgive my 2nd loan, which is at around $72k? Please advice, time is running out. Thank you.

An extraordinary window of opportunity — that could very well improve your financial future — is now open for business. History tells us it will not stay open forever! What am I referring to? The largest real estate liquidation in history. Home prices have dropped through the floor…interest rates are historically low…and there are record high inventories! Many Homes Now Selling At Up To 60% Off their Peak Prices Call 702-677-8796 bit.ly Produced by Linda Strasberg

Taking steps now to avoid foreclosure could help homeowners divert financial trauma. We have all heard about the misfortunes of people that bought into the ARM hype during the housing bubble. Currently, many of these people are finding that they cannot keep up with their house payments now that the introductory period of their loan is over. The concept of a short sale is fast becoming more popular for distressed home owners. Buyers find the idea very attractive because they can usually by a property at a discount. Initiating a short sale could help some individuals minimize their damage.

Home buyers may be convinced by greedy lenders that they can afford more home than they actually can in the hopes that they will foreclose. Other examples of predatory lending can come after a homeowner is in distress. Beware of lenders who offer to re-finance repeatedly, or loans that are for more than the house is worth. Whenever possible, engage legal counsel.

 The threat of foreclosure comes fast and hard for many homeowners who experience adverse personal circumstances. Loss of employment, tax liens, divorce or illness can all be contributing factors that lead up to foreclosure. A factor that may determine your eligibility to conduct a short sale is the level of communication with the lender. Banks are more likely to work with debtors that are a few months behind with problematic issues that impact their ability to pay than debtors that appear to have simply given up. Lenders also have an obligation to their guarantors to mitigate their losses and they want to maintain a positive public image. So, it is in their best interest to work with you to resolve the problem.

 If all else fails, a short sale could be the best option. It is even a possibility to retain any equity you may have accumulated. Be prepared to present your lender with payroll stubs, tax returns, bank statements, a recent credit report and any applicable medical bills or divorce decrees.

 Your lender will need to examine these documents in order to come to a decision. If you are approved for this measure, you still need to find a qualified buyer for your property. Part of the stipulation for approving a short sale may be the use of a real estate agent who has experience with short sales. Be cautious when dealing with a buyer. Make sure they are genuinely capable of purchasing your home. There are some real estate scammers who are ready and willing to take advantage of your distressed situation.

In conclusion, don’t let this experience deter you from buying another home in the future. By initiating a short sale, you have minimized the damage to your credit rating. Remember that you are not alone in this experience. Plenty of homeowners are feeling the sting of the housing hype. Home ownership is the American dream. You can recover and repair damage to your credit and be ready to buy at another time.

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