About Short Sales

You probably already know what a deficiency judgment is. Generally, it’s a lawsuit to collect unpaid debts, and in our business, it’s a lawsuit to collect the balance due on a mortgage after a foreclosure. Not all states allow lenders to do this, but many of them do.

When you have to sell your home through foreclosure or short sale, is there any way to prevent a deficiency judgment from being awarded? What happens in those situations?

Most of the time, the only way you can avoid a deficiency judgment is by negotiating with the lender during the pre-foreclosure process. They know how expensive it is to maintain their REO properties. The lender may consent to waive their right to collect the rest of the debt if they see that it will cost them less money in the long run to allow a short sale and simply let the debt go.

When that isn’t possible, depending on state law, the homeowner may have a deficiency judgment on their hands, whether the short sale was approved or the foreclosure went through. At that point, the debt only goes away through payoff or bankruptcy.

What will be the amount of the deficiency judgment? In the case of a foreclosure, the judge will take the balance due on the mortgage and subtract the greater of the high bid at the auction or the appraised value of the home. When the house is sold in a short sale, the amount the bank received from the sale is subtracted from the mortgage balance.

So, the former homeowner now has a court order which says he has to pay the rest of that mortgage debt to the bank. If there were two or more mortgages or liens, that homeowner may even have two or more deficiency judgments against him.

Immediately after the judge signs the order, the deficiency judgment begins earning interest. If the lender adds its REO expenses to the balance, the interest just keeps climbing higher. There is an interest rate of 11 percent per year on deficiency judgments in Florida. What’s the rate in your state?

The debt is usually sold afterward for 5 to 10 cents on the dollar. Banks don’t see much point in trying to collect those debts themselves, especially since most homeowners with that kind of debt are broke. They would rather take the 10 percent now than hope for a larger payment later while keeping the debt on the books.

Besides the deficiency judgment, the former homeowner also has a wounded credit report and a lower FICO score. Having a foreclosure on record is one thing, but a deficiency judgment or a low FICO score could influence a critical decision by others on whether to give that person a job, a loan, or a rental home.

With the number of foreclosures increasing faster than ever, the number of deficiency judgments are increasing right along with them. As the government re-evaluates how foreclosures are done in various scenarios, they may also reconsider how deficiency judgments are handled as well. On the other hand, they may not.

In the meantime, if you are about to lose your home, your best bet is to try talking with the lender. You or your agent may be able to help their loss mitigation department see how cost-effective it is for them to tell the credit bureaus that your mortgage is “paid in full as agreed.” If you don’t take the time to negotiate now, you could be paying for it later.

Need to learn more about foreclosures? Visit the Strategic Real Estate Coach website. You’ll be able to register for weekly updates on the latest developments in the mortgage industry and more!

Arizona, thriving just a few years at the height of the housing and building boom, has suffered immensely as a result of the current economic and real estate crisis in the United States; many an Arizona foreclosure exists as a result. In fact, on a site listing the top 25 worst markets for housing in the US, Phoenix and Scottsdale, Arizona both made the list. Given this dynamic, it is helpful for people to know where they can find listings of foreclosures in Arizona. These sources include foreclosure listing sites that contain bank-owned properties, government agencies that own foreclosed properties, the United States Department of Agriculture (USDA), the United States Marshal Service, and the Internal Revenue Service (IRS).

On a starting note, thousands of foreclosed properties can be located for no fee on foreclosure listing sites. In fact, such websites are among the most comprehensive ways by which to locate foreclosures. Millions of such websites come up when the phrase foreclosed properties is typed into popular search engines. It is of critical importance to make clear that the banks which list foreclosures on these websites have a financial incentive to sell them quickly, as the properties are not assets to their bottom lines. The properties cost money to maintain, and costs are also associated with depreciation. Given this aspect, potential buyers of foreclosures need to be careful to make sure that the property they wish to buy from the bank, which has all of the motivation possible to want to make a quick sale, does not turn out to be a costly investment and headache years down the road.

In addition to bank listings on foreclosure sites, foreclosed properties in Arizona can be found on the websites of the US Department of Housing (HUD), Home steps, and Fannie Mae, all government-affiliated organizations that list many foreclosed properties on a daily basis. It is helpful to look at each one of these sources in depth.

For someone wishing to purchase a foreclosed home in Arizona, HUD lists what are called HUD properties. A person wishing to purchase a foreclosure that is a HUD property must be prepared to also be an occupant of the house, as HUD foreclosed properties in the initial stages are only made available as owner-occupiers. They are in time made available to the general public only when it becomes near impossible to get them off the market.

Yet another top resource where foreclosures in Arizona can be located is Homesteps. This organization is affiliated with the US government, and it is a division of Freddie Mac. Freddie Mac is a money lender that is sponsored by the government. Homesteps has an easy to use website that has many foreclosure listings which can be found effortlessly based on the desired attributes typed in by the potential buyer.

Another money lender sponsored by the government in addition to Freddie Mac is Fannie Mae. Fannie Mae’s site has a search engine that is of top quality just like the one on Homesteps. Someone can specify the exact part of Arizona in which they would like to live, as well as other specifics like number of rooms, etc.

Interestingly enough, and not known to many people, it is not only the mortgage-oriented arms of the United States government that have foreclosed properties available for sale in the state of Arizona. The United States of Agriculture (USDA), the US Marshall Service, and the Internal Revenue Service (IRS) websites also list many homes that have a foreclosure status. To begin, the USDA is responsible for a lot more than just formulating and dictating government policies on food, trade, farming, and agriculture in the United States. The agency also lists many foreclosed properties on its website, mainly farms and businesses but also homes and additional seized agricultural properties.

The United States Marshall Service executes the United States government’s Department of Justice Asset Forfeiture Program. Properties that are seized by law enforcement agencies in the effort to combat and address crime are listed on the US Marshall Service website. In fact, efforts to combat crime are funded by the revenues generated by the sales of foreclosed properties on the US Marshall website. Properties seized by the FBI, Department of Homeland Security, and US Attorney General office can all be located through the US Marshall Service.

The Internal Revenue Service (IRS) website lists properties that were seized due to unpaid taxes. Many of the homes on the website are offered for quick sale by auction. The IRS website is very detailed, and it contains many listings in Arizona.

Someone looking to purchase a foreclosed home in Arizona has no shortage of areas where they can conduct research. These sources include foreclosure listing sites; government-affiliated sites such as Homesteps, Fannie Mae, and the US Department of Housing (HUD); the US Department of Agriculture; the US Marshall website; and the Internal Revenue Service (IRS) website.

To receive your list of Arizona foreclosure or general information about Az foreclosures, you want to get the right web page or company. Many companies can give you advice for foreclosures or even give you a list of homes that has been foreclosed.

Foreclosure is a process by which a bank that has made a loan on a property, repossess the property when the owner cannot make the payments on the loan anymore. The property is returned to the bank and is usually place at auction. They may place the property back on the market in order to pay off the debt still owed on the property. Arizona Foreclosures are on the top of the list.

Most properties loose value during this process, so the bank expedites the sale of the home in order to be rid of the property by lowering the price of said property. Foreclosure properties are often excellent investment opportunities for those specializing in real estate investing. Many investors are making offers on both commercial and residential properties that have been foreclosed upon for bargain basement rates.

With the recent economic downturn, the housing market had taken a huge hit. The epic loss of jobs through out the entire country has taken its toll, but one of the hardest hit areas is Arizona. Many people have struggled to keep their homes only to lose them to the foreclosure process. With the banks placing these properties being placed at discount rates, Arizona is one of the best places to find these discounted properties to invest in.

For people opting to buy a foreclosure home in Arizona they need to understand the financial and legal procedures. Hiring a good lawyer or talking to an estate agent would give you all the details needed. Always do a thorough research when buying any asset. This would help you to avoid scams and cheats so that you buy a clean property.

Properties are on the market as foreclosures in Arizona are placed on the auction block after the owners are properly notified. The properties are then placed in advertisements on the internet and on paper. These ads are easily found and are easy to read. Once the property is sold, it cannot be purchased by the former owners so this is a clear cut advantage to investors.

Buying a foreclosed property in Arizona has many advantages. The properties can be bought at a lower rate and this would mean a good investment for the buyer as it will bring higher returns as the market turns for the better. Arizona also allows for quick confirmation on sales. The properties are normally in decent conditions and the only changes needed would be a few upgrades or redesigning if it doesn’t suit the buyers taste.

Arizona properties are easily obtained due to the eased sale confirmation laws. This is in the best interest of property values, due to the desire to keep homes from becoming eyesores. These properties are usually in good condition and may need a few cosmetic fixes to suit the new owners taste. This will increase the value of your investment by leaps and bounds.

If investors present a positive credit report and meet the state law then the owning bank may sell the property on a loan. With the state laws being relaxed, Arizona Foreclosure properties will be the best investment due to the decrease in prices. If you make the necessary repairs then you can made a decent profit.

In order to find the reliable source for information on Arizona foreclosure, you need to look on the Internet. Tons of Az foreclosures companies are their to help you with finding valuable information.