Tag: foreclosure

How Low Will My Credit Drop After a Short Sale or Foreclosure?

Posted on by Jonathan Smith

How Low Will My Credit Drop After a Short Sale or Foreclosure?

With credit scores, one can easily predict the possibility of you making payments on time, paying off loans, and helping a lender determine whether you are a risk. Credit scores are determined by an individual’s lending history and ability to repay and manage debts based on the agreement. Factors like letting your mortgage payment slide, failure to make timely payments tend to affect your credit score. There is every tendency for your credit score to be impacted if you suffer a foreclosure or short sale, which will, in turn, make you a potential risk for a lender.

If you are thinking of taking a short sale or foreclosure for your home, after reading this, you will become aware of how much your credit score could drop. However, at this point, it is necessary to consider the meaning of short sale and foreclosure

 

WHAT IS A SHORT SALE?

With a short sale, you have the opportunity of selling your home and using the gains or proceeds from the sale to pay off your mortgage irrespective of whether the profits don’t make up the full balance. When you attempt to sell your home for even less than you owe in a short sale, the lender earns the proceeds. Not every lender will be open to the idea of a short sale, and homeowners have to be at least 90 days late for the lender to be open to that idea. In some cases, lenders might choose to forgive the unpaid balance on the mortgage or not. In some states, certain laws allow lenders to seek deficiency judgments, which ensure that you pay the difference between the balance due on the mortgage and the sale price.

 

WHAT IS A FORECLOSURE?

There is every chance for you to be faced with a foreclosure when you fail to make your mortgage payments, and the lender chooses to seize and sell your property in other to make up for their financial losses. It takes a lender four missed payments to result in foreclosure proceedings. The foreclosure process tends to vary by state, but if you are going to be faced with a foreclosure, then you would receive a notice most likely through a mail.

 

HOW LOW A SHORT SALE CAN REDUCE YOUR CREDIT SCORE

A short sale will most likely affect your credit score and not just by a small margin. It is capable of dropping it to as low as 100-150 points and that depends on where you started; your credit score will only fall more based on how high it was. Short sales are regarded as the worst things that can affect your credit score. Credit scores tend to range from 300 to 850; for example, if you have your credit score between the range of 750-800, it can easily reduce to 150 points or lower in a short sale. If you are within the range of 650-720, after a short sale, you could lose 100 points and fall into what is commonly referred to among lenders as the subprime category.

 

HOW LOW A FORECLOSURE COULD REDUCE YOUR CREDIT SCORE

Foreclosures tend to have more effect on credit scores. Now according to FICO, based on a person’s starting scores, a fair number of homeowners who go through a foreclosure experience a drop in their credit score from between 85 and 160 points. An individual with a good starting score of 680 could reduce to between the ranges of 579 and 594, which is regarded as a fair or poor score range, and someone with an excellent score of 780 may reduce between 620 and 642. Foreclosures can affect a consumer’s credit for as long as seven years.

It is necessary to understand this because a low credit score can make it difficult or impossible to borrow. Plus, as your credit scores drop, your interest rate will only continue to increase even if you are eligible for credit loans.

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Bellevue Bankruptcy Attorney Bellevue Washington Lawyer

More Advice on Bankruptcy:

Unique and Strange Real Estate Terms

Posted on by Jonathan Smith

Unique and Strange Real Estate Terms

These real estate and property terms are used quite a bit but many people have no idea what they actually mean. If you’re considering investing in real estate, selling or buying your first property, here are some key terms you should know.

APR – this stands for the annual percentage rate but you may also see it as APRC, which stands for the annual percentage rate of change, and is the entire total cost of the loan including interest charges and other fees. This is important to know when comparing other mortgage rates and terms.

Conveyancing – this simply stands for the legal work involved in buying and selling real estate.

Disbursements – This is the act of paying out or dispersing money, typically to the seller, real estate agents and other parties involved in a real estate transaction.

Gazumping – This odd term stands for when a seller accepts a higher price than what was previously agreed upon with another buyer. Another technical term would be to “swindle” somewhat and it’s usually the seller raising the contracted price of the property after having accepted a lower offer from another buyer.

Ombudsman – Again, if any term that stands for an official or person appointed to investigate individuals complaints on behalf of customers against real estate agents, escrow companies, and insurance companies.

Vendor – This is typically used as the legal name to describe the seller of the property or the real estate.

Freehold – a freehold is ownership of the property and/or land.

Real estate agents often shorten their descriptions of a property in order to get as many characters in the description area as possible. Too many homebuyers, they may simply look like letters that mean nothing to them in actuality. Here are some of the most common abbreviations you’re going to find in a real estate description.

1. BICC – Built in China Cabinets

2. Detached GH – Detached Guest House

3. FR. DRS – French Doors

4. FROG – Family Room Over Garage

5. FP – Fireplace

6. HDW – Hardwood Floors

7. Bb – Baseboard heat

8. CH/BW – Chain Link or barbed wire fence

9. d/w – Dishwasher

10. EIK – Eat-In Kitchen

Bedrooms and Bathrooms are also usually abbreviated like Bd and Ba and Living Room is sometimes shortened to LR or FM (Family Room). [Source]

Trying to keep all these terms in mind when searching through listings can be daunting but that’s what I’m here for! For mortgage modification or mediation, bankruptcy attorneys or information on the Washington State Fairness Act, contact me anytime.

More:

How to Buy a Foreclosure

What to Expect in a Bank-Owned Home

If you sell, be prepared for the home inspection

Bankruptcy or Foreclosure Looming?

Posted on by Jonathan Smith

Bankruptcy or Foreclosure Looming?

Bankruptcy or Foreclosure Looming?

Let The Washington Foreclosure Fairness Act Help you!

New Mortgage Foreclosure Program for the State of Washington.

A little known Mortgage foreclosure program went into effect in Washington State in 2011.  It is called the Washington foreclosure fairness act (FFA).  This program is for you if you need help paying your mortgage and need to renegotiate with your lender!  This program was designed to help homeowners facing foreclosure and lenders to reach a resolution about foreclosures.

The Washington foreclosure fairness act also helps homeowners in that it requires lenders to notify “borrowers” before the foreclosure process of the possibilities of counseling and mediation.

You need a referral by a Housing Counselor or an Attorney to use the Washington foreclosure fairness act program!  The reason for this is so that you will have representation when you sit down with the lender’s attorneys.  When you are referred to the program, you will then be in the Mediation process.  This process can be a very timely solution for you and your lender’s problems with the right people to support you.  Having a knowledgeable law firm like Advantage Legal Group on your side can help you find your best option in a timely matter.

Related: 4 Ways to Raise Your Credit Score in 6 Months

Stopping the foreclosure process.

Once you are in the mediation process for the Washington foreclosure fairness act program the foreclosure process halts!  You must act in “good faith” to stay in the mediation process.  You and your legal representative will go through the mediation with your lender and their legal representative.  The mediator will aid both sides to come up with a plan that will benefit both parties.

Remember, that if at any time the mediator believes you are not acting in “good faith,” your mediation can be canceled and your lender can proceed with a foreclosure.  Your legal counsel will help you to know what you need to do.  Examples of not acting in good faith: not turning in the appropriate paperwork on time, not paying the mediation fee on time, and not responding to e-mails or calls from the mediator.

Other Important Information

Free Seminars, Free Consultations, and Informative Videos!

If you have been thinking about bankruptcy or you are seeing a foreclosure in your future check out Advantage Legal Group to help with your legal options.  Advantage Legal Group offers free seminars in the Seattle/ Puget Sound area.  These free seminars cover legal options all the way from Foreclosure Defense Strategies, Mortgage Mediation, Deed in lieu of Foreclosure, Mortgage Modification, Short Sales, to the Washington State Foreclosure Fairness Act.  Attend these free seminars in Bellevue, Lynnwood, or Tacoma.  Attendees also learn about their legal options for their specific financial situation.  You are under no obligation to do anything by attending the seminar.  After the seminar, if you choose, you can schedule a free consultation with Seattle Bankruptcy Attorney Jonathan Smith to discuss even more specific their financial situations.

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Washington Foreclosure Fairness Act – Referral to Mediation Process

Posted on by Jonathan Smith

Washington Foreclosure Fairness Act - Referral to Mediation Process

Washington Foreclosure Fairness Act – Referral to Mediation Process

In 2011 Washington and passed the Washington foreclosure fairness act to help homeowners who are facing foreclosure.  This program was designed to help homeowners and their lenders reach a resolution about foreclosures or other possible options for the homeowners.

Homeowners must be referred to Mediation by housing counselor or an attorney to be part of the foreclosure fairness program.  A law firm like Advantage Legal Group can help you access the foreclosure fairness program or help you determine which option is best for you.

This new program now requires lenders to notify borrowers prior to foreclosure of the availability of foreclosure counseling and the potential for mediation.  Understanding the mediation process can be confusing and time-consuming.  Having a knowledgeable law firm like Advantage Legal Group on your side, can help you find not only your best option, but help you do it in a timely matter.

Advantage Legal Group can help you through the mediation hurdles.  Did you know that some lending institutions are exempt?  Banks and credit unions that are exempt from the mediation process of the Washington Foreclosure Fairness Act have less than 250 sales of owner-occupied residential real estate property.

Washington Foreclosure Fairness Act – Mediation Process

Key information to know for scheduling mediation sessions:

• Department of Commerce will assign a mediator within 10 days of receiving Referral to Mediation.

• Beginning three days after commerce sends an assignment letter to you via e-mail, you have 70 days to conduct the foreclosure mediation session.

• Mediation must take place within the county where the borrower of lives, unless both parties agree to a change of location.

• Model Notification form must be sent to all parties at least 30 days before the mediation session, if used.

• Payment of fees to mediator must be paid within 30 days of the assigned letter from department of commerce.

• Within 23 days of receiving of the referral to the foreclosure mediation letter from the department of commerce, you’ll need to complete and send in the initial package for the Home Affordable Modification Program also known as HAMP to both the mediator and the beneficiary.

HAMP package includes forms:

  • Request for Modification and Affidavit (RMA) form.  (A three-page form that includes household income expenses debts assets in tax returns for the past two years as well as hardship affidavit if applicable.)
  • Tax forms 4506 – EZ or form 4506 T for the previous two years
  • Verification of income
  • Dodd-Frank Certification Form

At any time if the mediator believes you are not acting in good faith they may cancel the mediation and the bank or other beneficiary may proceed with a foreclosure sale.  Examples of not acting in good faith are the following:

  • Not providing the HAMP package on time
  • Not providing the mediation fee on time
  • Lack of response to mediators e-mails
  • Lack of response to mediators calls

This new program requires lenders to notify borrowers prior to foreclosure of the availability of foreclosure counseling and the potential for mediation.  Understanding the mediation process can be confusing and time-consuming.  Having a knowledgeable law firm like Advantage Legal Group on your side, can help you find your best options, done in a timely matter, and show that you are acting in good faith.

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Defense Against Foreclosure

Posted on by Jonathan Smith

Defense Against Foreclosure

Defending Against Foreclosure

If you are facing the loss of your home or fear that you may soon be facing a foreclosure, a law firm can help you to develop a strategy that may include defending against the foreclosure, negotiating a modification, refinance, short sale, or implementing a strategic default plan.  A Foreclosure Defense Law Firm assists clients in all stages of the pre-foreclosure and foreclosure process.

30 Days to Respond

It is important to act or seek assistance as soon as possible to ensure that you do not lose some of the many options you have when faced with a foreclosure.  There are deadlines in the foreclosure process as well as certain requirements that the banks must follow, in order to successfully foreclose on a home.  Once you are served with a summons and complaint from the bank, you have only thirty days to respond and defend against the foreclosure.

Defenses to Foreclosure

Challenge a foreclosure by bringing a defense such as unconscionability or lender mistake.  Homeowners and their attorneys are challenging foreclosure actions in many different ways.  Here are some of the most common defenses to foreclosure.

How to Raise a Defense to Foreclosure

Courts are sympathetic to challenges to foreclosure actions; attorneys are raising many different types of defenses.  Below is a description of the most common of these.

Common Foreclosure Defenses

  • The Terms of the Mortgage Are Unconscionable – It usually is not enough to simply claim that the foreclosure is unfair; rather, you have to come up with a specific justification for your position that has previously been recognized by the courts.

  • You Are a Service member on Active Duty – If a foreclosure is initiated while you are on active duty, you can automatically receive a nine-month postponement.

  • The Foreclosing Party Did not Follow State Procedures – If your challenge is successful, the court will issue an order requiring the foreclosing party to start over.

  • The Foreclosing Party Can’t Prove It Owns the Mortgage- If your mortgage has been sold and bought by many different banks, lenders, and investors, proving just who owns it can be difficult for the last holder in the chain.

  • The Original Lender Engaged in Unfair Lending Practices- You may be able to fight your foreclosure by proving that your lender violated a federal or state law.  Lenders violate TILA law when they do not make certain disclosures in the mortgage documents, including the annual percentage rate, the finance charge, the amount financed, the total payments, the payment schedule, and more.

  • The right to rescind the loan – the key remedy in foreclosure actions is the borrower’s ability to retroactively cancel or rescind the loan.

  • State-law remedies for “high-cost” loans – A few states have special protections for people facing foreclosure on “high-cost” mortgages.

  • The Mortgage Servicer Made a Serious Mistake – You may be able to challenge a foreclosure based on mistakes such as:

    • Crediting your payments to the wrong party.
    • Imposing excessive fees or fees not authorized.
    • Substantially overstating the amount you must pay to reinstate your mortgage.

To learn more about these defenses and other ways to avoid foreclosure contact a foreclosure Defense Lawyer.  A Foreclosure Defense Lawyer will:

  • Provide you with a free consultation
  • Review your documents and information
  • Outline a strategy to defend your home

Fear losing your home? Foreclosure looming?

Posted on by Jonathan Smith

Fear losing your home? Foreclosure looming?

You held out for this long but your lender has finally sent you the” letter.”  However, the letter talks about consumer debt counseling and mediation.  This is part of the Washington Foreclosure fairness act.  Lenders must inform you of your rights before a Foreclosure can be processed.  Bankruptcy is a valuable option to consider.  Understanding and knowing your options will help you to come out ahead.

Bankruptcies are on the decline?  You might think so as the economy recovers but bankruptcies are actually on the rise in many areas.  If you have recently been sent a letter from your bank or lending institution, it is time to contact an Attorney or consumer debt counselor that is recognized by the court system.

Whether you have been laid off, had medical issues with bills piling up, or just got in over your head with consumer debt, you are not alone.  Now you are afraid you are going to lose your home.  There are ways to help save your home.  Check out the New Washington program to help people just like you.  It is called the Washington foreclosure fairness act.  This act helps homeowners just like you to help are you negotiate with your lender.  It requires a wonder to notify you of the process before the foreclosure process starts.  The process includes consumer debt counseling and mediation with the lender.  You will need to have an Attorney or a debt counselor on your side to go into the mediation process.  Advantage legal group out of Bellevue can help you find your best option, walk you through the process, and hold your hand through the process.

It will become much clearer through the Washington foreclosure fairness act and with the aid of an attorney to be knowledgeable about your rights and responsibilities, and how to save your home.  First being in the mediation process actually stops the foreclosure.

Advantage Legal Group offers free seminars in Seattle and around the Puget Sound area.  These free seminars cover many options for distressed homeowners.  Knowing what options are available to you and what makes sense for your family will give you the confidence to go through the foreclosure process, mortgage mediation process, or short sales process.  These are only a few of the strategies that the seminar covers.  Understanding your financial situation and the types of strategies that are out there for you will help you to figure out your defense.  Is mortgage modification the option for you?  What is your best option, deed in lieu of foreclosure, mortgage modification, short sales, mortgage mediation, and what will your Foreclosure defense strategy be.

If after the seminar, you need more information Jonathan Smith a Seattle Bankruptcy  Attorney will schedule a free consultation with you to go over even more specific situations.

Additional Financial Resources:

 

What Happens if the Bank Forecloses on My Short Sale?

Posted on by Jonathan Smith

What Happens if the Bank Forecloses on My Short Sale?

It happens quite often…more than you realize…that a home in process of a short sale is foreclosed on. It is a common misconception that the lender won’t file a foreclosure lawsuit against you if you are currently in the process of negotiating a short sale or loan modification.

Example:

Debbie lists her home for a short sale in November and receives a contract from a buyer. While waiting for the bank’s approval, at the end of April gets served with foreclosure papers. How can this be if she has a contract on the property?

It can be. And again, it is quite common. You should expect to get served with a foreclosure lawsuit four months or so after you stop making mortgage payments. When you try to complete a short sale, it more often than not takes a month or two to get it under contract and 45 to 90 days to get approval from the lender. If you fail to respond to the foreclosure within 20 days, you will be in default and will have waived valuable rights in defending the lawsuit in case the short sale falls through. It is recommended that you see an attorney about responding to the lawsuit.

With the right and proper sequence of actions, it is possible to get foreclosure postponed so that you can successfully short sale your home. It takes knowing when and how to be proactive.  Advantage Legal Group can help you determine the best course of action for your foreclosure situation.

For more information on mortgage mediation, foreclosure, short sales, bankruptcy and all things related to personal finance, check out Bellevue Bankruptcy Blog. These topics and issues can be confusing and stressful, but help is available! Contact us today!

More tips on Short Sales:

 

Should I Hire a Lawyer for a Mortgage Mediation or Foreclosure?

Posted on by Jonathan Smith

Should I Hire a Lawyer for a Mortgage Mediation or Foreclosure?

Should I Hire a Lawyer for a Mortgage Mediation or Foreclosure? – If your lender has failed to approve previous effort to modify your loan, often mediation is the best way to go. What is mediation? Foreclosure mediation is a meeting where a homeowner and mortgage lender negotiate potential modifications or other alternatives before an impartial Judge in an attempt to reach an agreement. And this kind of mediation requires the expertise of a lawyer.

Related: What to Expect in a Bank-Owned Home

Why hire a lawyer? The most common question asked when someone is facing foreclosure is, “What will give me the best chance to avoid this?” Although circumstances involved always vary greatly, the answer ALWAYS remains the same. And that answer is this, ” to fully and most completely use all your rights and remedies including foreclosure defense, loan modification, mortgage mediation, and bankruptcy, you MUST be represented by a foreclosure lawyer…an EXPERT foreclosure lawyer.”

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You need a lawyer with TONS of experience and you need one NOW.  So, be sure to ask your potential representation how long they’ve been representing clients like you, how long their practice has been devoted to foreclosure prevention and then review evaluations of recent clients.  Remember, get to work on this immediately as delay, indecision and denial are the enemies of foreclosure prevention.

Beware of scams and make sure your lawyer is an expert. Anyone who generally guarantees they’ll save your home is either a scam artist or ignorant or both. Additionally, the person at the bank may be a brand new hire who knows nothing or someone who actually knows what they’re talking about. Either way, the next time you call, you may get the new hire. You want an expert, the same expert, and throughout the whole process.

An expert can help you understand the debt and tax consequences of a short sale, protect you from pitfalls and scams, assure you that, should foreclosure happen, you have the right to stay in your home for as long as your rights and remedies allow and enable you to plan where you’ll live next without fear of the sheriff showing up and ordering you to leave. An expert lawyer can also, in most cases, help you to be debt-free when you leave should foreclosure be inevitable in your case. And of course, an expert lawyer can help you come to an agreement with your lender that avoids foreclosure altogether.

Yes, these kinds of lawyers can be expensive but hiring an expert almost always benefits you not only financially but emotionally. The benefit of avoiding the loss of your home is obvious. But should you lose your home, remember, as mentioned before, there are pitfalls and scams to avoid and knowledge to be learned about debt and taxes that come with certain mediation agreements.

To contact an expert representative today, visit Advantage Legal Group.

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Foreclosure Rescue Scams Are Out There – BEWARE!

Posted on by Jonathan Smith

Foreclosure Rescue Scams Are Out There - BEWARE!

Foreclosure Rescue Scams Are Out There – BEWARE!

Washington, as well as other areas, have a growing problem of foreclosure rescue and mortgage modification scams that could cost you thousands of dollars OR your home should you fall victim. Scammers will usually make promises they can’t keep such as ensuring GUARANTEES of certain outcomes for a fee and/or pretending they have direct contact with your mortgage servicer.

If you think you may be a victim of one of these kinds of scams, file a complaint NOW.

To help you avoid such scams follow these tips:

If you see/hear promises to save your home and lower your mortgage or debt payment, beware of con artists. If you are struggling to pay your mortgage, keep these tips in mind:

On your own or with help from a HUD-approved housing counseling agency, you can apply to the federal Making Home Affordable (MHA) program.  For more information call 888-995-HOPE.

ONLY your mortgage servicer can grant a loan modification. This is how you know it’s impossible for a third party to guarantee or pre-approve your HAMP mortgage modification application.

If they want you to pay a fee upfront, beware. In most cases, charging fees in advance of a mortgage modification is actually illegal. Paying a third party won’t improve your likelihood of receiving a mortgage modification anyway.

If an individual or company claims to be affiliated with HAMP or has a logo or some display representing themselves as such, check out the said connection by calling the Homeowner’s HOPE Hotline at 888-995-HOPE.

Also, be leery of anyone that offers money-back guarantees.

ESPECIALLY beware of anyone who advises you to discontinue contact with your mortgage servicer or to stop making mortgage payments.

Never sign over the deed to your property to any individual or organization unless you are working directly with your mortgage company to forgive your debt.

SEE ALSO:

What to Expect in a Bank-Owned Home

Why You May Need an Experienced Lawyer During Foreclosure

Posted on by Jonathan Smith

Why You May Need an Experienced Lawyer During ForeclosureWhy You May Need an Experienced Lawyer During Foreclosure

Life, unfortunately, isn’t always full of brightly colored rainbows and delicate butterflies and we might end up finding ourselves in a position where we are unable to pay our mortgage and fear the potential of facing the Foreclosure process. While it is believed that this process comes and goes with no possible way out you often don’t think that you will need any legal help, however, that isn’t necessarily the case. By using an experienced team of lawyers you will be able to look into multiple different options that are available to you as well as discuss in detail and ultimately decide which option is the best fit for you and your family. Mortgage Mediation, Mortgage Modification, Short Sales and even Bankruptcy are all options when you are facing a Foreclosure.

Fighting battles alone can often lead to success, although the changes may be slim, but when you have people fighting along side you, you have a better chance of winning. The main thing to understand is that your options are not limited. As individuals, we are scared of the notices we may see being plastered to the front door of our home, however, one thing to cling to is that many of these notices are simply scare tactics and aren’t legally able to advance the process whatsoever. By hiring the right team to support you, you will be able to fully understand what notices to look for, what notices are just scaring tactics, and what each notice means and how to proceed. Don’t let the multiple notices on your door fool you and discuss each notice with a professional so you are fully knowledgeable and aware of how the processing is accelerating and at what speed.

There are three different notices that will be posted that you will need to keep an eye out for:

Notice of Pre-Foreclosure Options, Notice of Default, and finally, Notice of Trustee Sale. Notices with any other titles will not hold a legal merit and will likely be there as an attempt to make the process go faster by your foreseeable forfeit of your home. To ensure you stay ahead of the game, contact legal professionals before these notices are posted when and if at all possible. You will be aware if your mortgage payments haven’t been made so contacting a legal team before the process starts will allow you to have more time to discuss the processes and ask questions so that you don’t feel rushed once the ball starts to roll.

[Related Post:  The Difference Between Selling to an Investor VS. with an Agent]

Not only will you be able to ask questions, get answers and have a team fighting for you but you will also get the best representation during your Foreclosure. Stay on top of the game and be ready to catch the curve balls that are thrown your way. Facing Foreclosure is not the end and it is most certainly not the only way to resolve the problems you are facing. If you are in Seattle, Bellevue, Tacoma, Everett, King County, Snohomish County or Western Washington, click here to get in contact with the lawyers that are standing by to assist you.

Having a great team behind you is important if you are planning on avoiding a foreclosure but there may be other options. Having an investor buy your home outright may also be a viable option.  – Thank you to Peter Westbrook REI for our guest post this week. Peter buys properties as-is in any condition throughout northern California.