The Mortgage Company Must Hire A Lawyer And Pay Filing Fees

Category: Finance.

With sharply higher mortgage rates comes an increase in home foreclosures as homeowners find that they simply cannot afford the higher mortgage payments. Thus, the number of foreclosures is rising across many housing sectors spelling opportunity for savvy home investors.

Worse for them, no mortgage company will allow them to refinance if their credit standing is precarious. Are you ready to jump in? Chances are if a homeowner is faced with a foreclosure, he may be receptive to you offering to buy his home to" rescue" him from what will inevitably be a credit killing experience. If so, it isn t always thing to do, but it can be done as outlined below. If you play it right, you could offer to take over payments or simply buy the home at a price that covers what is owed on the mortgage. On the other hand, if a homeowner is seriously behind on payments and the home s value has not kept up, his mortgage lender could squash any deal that you make. In effect, the owner loses his down payment and equity in the home, but he gets to keep his all important credit rating and he will have the opportunity to purchase a home again once his finances straighten out.

The mortgage company could end up losing tens of thousands of dollars on the sale, especially if your offer doesn t pay off the outstanding mortgage. In that case, the mortgage company may authorize that the courts proceed with a foreclosure to remedy the situation. Yes, the homeowner is responsible for the loan deficiency but if he doesn t have the money now, what is the likelihood he will have the fund later? A compromise plan could have you still buying the home if your offer effectively is almost enough money to cover the outstanding mortgage. Why is that? If it falls let s say five thousand dollars short, the mortgage company could be interested in entertaining your offer. For several reasons including: --Foreclosure proceedings are expensive.

In addition, thousands of dollars in late payments could be lost forever. The mortgage company must hire a lawyer and pay filing fees. Your deal would recover some of that money. --Property management is a pain. Taxes, repairs can add, maintenance thousands more to the cost of the home. If the home is recovered via foreclosure, the mortgage company must still maintain it until it is sold. Also, if the local housing market truly stinks then your offer may be the only one that a mortgage company could expect. Therefore, understand the market and set your offer at a price to make the most of your benefit.