Articles

Triple D's

When it comes to reasons for a foreclosure, it's normally one of the Triple D's that is the common cause; Divorce, Death or Debt ...

Divorce

When many couples separate, neither one alone can cover the mortgage payments. Most often the house is sold and the equity is split to cover past debts. The person who does stay in the house, soon finds themselves falling behind in various payments including the mortgage.

Death

Either an unexpected or long term illness death can bring hardship to a family. Just like a divorce, a single spouse finds themselves trying to make ends meet on one income. Not everyone has enough, if any, insurance coverage for this situation.

Debt

The more common issue is a large amount of debt. This can be from spending beyond your means, due to ease of use of credit cards, causing high interest rates and penalties. They could be caught by surprise from lose of job, cut hours, higher fuel costs, medical bills, repairs and overall inflation. Also, they may be experiencing the affect of an ARM increase in mortgage payments.

Short Sales

A Short Sale is a submitted offer to a bank or mortgage company's "Loss Mitigation" department, to pay and settle for less than owed on the house. This will get the homeowner out of a property that has more debt than value. The homeowner can walk away without owing anything. There is possibly no taxable ramifications (See an Attorney, reference "Mortgage Relief Act of 2007"), and the homeowner can avoid a foreclosure.

The reasoning behind the reduced settlement on loan could be:

  • House requires major repairs.
  • House has environment issues.
  • Market values have dropped.
  • Owner has financial problems.
  • Owner has health issues.

There is no guarantee of approval and the process can drag out over a long period of time (6 months to a year). No cash can go to the seller. Homeowner must find an experienced person, who has closed these type of transactions, since one mishandling of paperwork can cancel the deal. There also has to be an approved buyer lined-up, who can close on the house.

CBS News on Short Sales

Testimonials

Ricky and his crew were so helpful in buying my house. It took 3 months with Citi Financial, but the deal
went through without any problems. C. Farley - Houston, TX

 

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