Nkodas Travel site

Posts Tagged ‘Foreclosure’

If you are waiting for government help to stop foreclosure, you will need to wait until President Elect Obama and the new congress is seated before you have any financial difficulty.  That’s because the existing program, Hope for Homeowners (H4H) is great for the government but not so good for anybody else.  When the initial plan was unveiled by the Federal Housing Administration (FHA) the anticipation was that it would help to save over 400,000 homeowners from foreclosure.  H4H went live on October 1st, 2008 and in the first two months relatively few homeowners have taken advantage of it. There will be many articles touting it as a great thing that will help many people.  To me, it is a fairly stupid idea.

H4H requires lenders to take a serious haircut and for borrowers to give up their equity.  At first look, it seems like a good idea.  Under further investigation I think it falls apart.  Let’s take a look at how the FHA describes this will work.  For purposes of discussion, we will presume that you paid $250,000 for the house with a 10% down payment.  The example information below is taken directly from the FHA website.                                                                                          

These are examples of how the unique equity and appreciation sharing elements of this program work.  Keep in mind that these are only examples, and your actual experience will depend on many things, including how much your home increases or decreases in value1  Read more...

Government tax foreclosure for sale homes draw the attention of many investors, these properties are often beautiful homes and very affordable. The reason why they are so affordable is that the Government has so many of them on their inventories, they are also responsible for paying taxes on these properties and in order to escape from this, they allow them to go on sale at prices whereby they will be purchased.

For anyone wanting to settle down in a new home, or purchase a vacation home, it is possible to purchase foreclosure sale homes. In fact in the US presently we are seeing more foreclosure properties being purchased than any other kind of real estate purchase. Investing money in Government tax foreclosures for sale is a way to make good returns on investment or find the dream home you have always wanted.

Using the services of a reliable listing company is one way of finding just the right foreclosure for sale home. These services have access to many resources that we as lay people do not have. It is also convenient as all you have to do is provide your budget and criteria to the listing service and they will short list the homes available on your behalf. This saves trips to the county courthouse and wading through thousands upon thousands of properties to find the right one. Government tax foreclosures for sale may also be found in real estate magazines and newspapers. This also applies to bank and other lender foreclosure sales.  Read more...

With continuing record foreclosure rates, more people, pundits, and politicians are calling for more direct involvement by the government in the market. Freezing rates, punishing banks, and offering rates as low as 0% to borrowers have been proposed. But holding the banks themselves accountable through government intervention will not serve the overall purpose of convincing banks to begin making prudent lending decisions again. In fact, it was government intervention in lowering interest rates and offering cheap credit that significantly contributed to the real estate bubble to begin with.

Rate freezes and low interest rates

The problem with creating rate freezes or giving extremely low interest rate loans to those with poor credit is that many of the largest banks that would be making these loans are owned by shareholders who are attempting to capitalize on the highest returns and lowest risk that banks can offer. Many of these investors include pension funds, mutual funds, insurance companies, individual investors, and other institutional investors.

If the government got involved and started regulating interest rates and lending programs directly, many of these large investors would take their money out of the financial institutions, looking for better returns in other markets. How happy would any person be if their 401(k) was returning 0% for18 months with a low interest loan with a freeze? Probably not very pleased at all. What if it was returning a negative rate, because collecting 0% interest does not pay for the direct costs banks have when making loans, and profits would have to be taken out of the principal amounts coming in? This would be even worse, because no one wants a negative investment return.  Read more...

The Federal Housing Administration and Housing and Urban Development and other government agencies own homes that are a government foreclosure house. A government foreclosure home becomes awarded back to its appropriate government agency and then is listed as a government foreclosure house. It is then resold at a public auction and resold to the highest bidder. Home buyers and investors alike consider this a prime investment. Purchasing a government foreclosure house comes with various benefits, such as saving thousands of dollars off the property’s  market value, while making a large profit from the home. However, being aware of the government agency regulations, before investing in a government foreclosure house is essential. Being familiar with the bidding process and purchasing procedures is in the best interest of home buyers and investors.

One misconstrued idea is that investing in a government foreclosure house, is only available to certain individuals or those of low incomes, who qualify for purchasing the home. When the truth is actually that almost anyone can make such a purchase. It is commonly misunderstood that a home buyer or investor can purchase a government foreclosure house for hardly any money at all. This is not true, although there may be some lucky buyers who may locate a great house for 40% below its market value, the average savings, are generally somewhere between 20 – 30% below market value.  Read more...