Real Estate Information Archive

In our present economic situation, many people are currently facing the loss of their homes. However, because foreclosure is expensive for lenders, mortgage insurers, and investors, the FHA, HUD, Freddie Mac, Fannie Mae, and private companies are being required to work with borrowers who are experiencing money problems. As a result, lenders do have workout options to help you keep your Chicago home. Warning: Do not mistakenly assume that your mortgage situation will correct itself; you must take the steps suggested below to avoid, or at least forestall, foreclosure.

1. ACT NOW! Time is of the essence. Do not ignore letters or calls from your lender. If you do, chances are that action to foreclose will begin quickly.

2. CONTACT YOUR LENDER:  When you reach the lender, you should be prepared to provide him/her with your account number; a brief explanation of your circumstances; income documents or evidence of unemployment, public assistance, or business losses; and a list of your household expenses. Ask about a reduced interest rate, refinancing, lengthening the term of the loan, and a repayment plan for missed payments. In all probability, the lender will mail you a loan workout package. It is important that you complete and return these forms quickly.

3. DO RESEARCH; Reread your loan documents to determine what is said about unpaid mortgage payments. Learn about specific foreclosure laws in your state Get in touch with the government housing office where you live.

4. CONSIDER SELLING: Lenders will most likely suspend foreclosure proceedings while your Chicago home is on the market and possibly even eliminate mortgage payments during this time. Explore a short sale.  If the market value of your house is less than you owe, your lender may consider taking the sale proceeds and forgiving the rest of the debt. Or you might give your deed to the lender in return for the loan balance being cancelled. Check with an attorney or housing counselor before taking these actions.

5. BEWARE OF SCAMS! Avoid “foreclosure prevention” companies who offer to negotiate with your lender, will cost you thousands of dollars, and may even “rescue” your home away from you. Do not sign anything from these firms!

6. SET PRIORITIES: Pay the mortgage on your Chicago home before paying credit card debts, doctor bills, or the like. Can you sell a second car or other assets? Could you take a second job to ease the situation? Your lender needs to know that you are serious about trying to find a solution to your financial problems and are willing to make sacrifices to do so.

7. EXPLORE ALL OPTIONS:

        a. Get legitimate help. Contact a HUD approved housing counselor (1-800-569-3287) or 1-888-995-HOPE) for free or low-cost guidance. Help is also available from the National Foundation of Credit Counselors (1-866-557-2227). Also, check with your local bar association or a neighborhood legal services program for pro bono legal representation.

        b. Look into government benefits such as fuel assistance, food stamps, or property tax abatements to help you through this difficult period.

It is important that you be both aware and proactive in your fight to keep your Chicago home!

I am a Certified Distressed Property Expert (CDPE). I have the training, knowledge and experience needed to help save your Chicago home from foreclosure. The clock is ticking. Don’t hesitate. Give me a call for a private consultation.

The most important piece of a person’s financial life is their credit score. Whether buying a new home, applying for a job, refinancing your home, paying off debt, or getting utility service, your credit score will drive the outcome. One would think that Americans are all aware of what the scores are measuring and what factors play a part. But, most Americans do not know enough about the three digit rating or what is involved. Do not let these credit score myths get in your way when preparing for the purchase of your next Chicago home.

Myth: Checking a credit report can either damage or lower your score. A credit report can be conducted by you or someone like an employer as many times as desired with out having any impact on your credit score. Reviewing your credit report will never change your credit score. Just make sure that reports are retrieved through the bureaus or a legitimate score seller.

Myth: Age, sex, and income are factors that affect your score. None of this information plays a role in determining your score. A higher income may make it easier to pay off debts, but income and net worth have no impact of credit scores.   

Myth: A credit score can be destroyed by shopping for a loan. When seeking to extend credit, too many inquiries can have a negative impact your credit score. However, when several inquiries are made by the same type of lender with in a 14 day period they only count as one inquiry against your credit.

Myth: Your score can be hurt by credit card offers. When companies offer you their credit cards it does not have any affect on your score. Unless, your take advantage of all the offers and carelessly use all of the credit available. The number of credit cards a person manages does not matter. The important thing is maintain a low ratio of used to available credit.

Myth: Credit scores of married couples are shared. A credit score can only belong to one person, just as one person can only have one score. A married could does not share a credit score, but their scores could have an affect each others. When opening a joint account, the information accumulated from that account’s activity will be reflected on both people’s credit report. If all of the couple’s accounts are joint, then their scores will be somewhat similar.

Myth: Closing unused accounts improves credit scores. Unused accounts most likely contain available credit, which is an important part of a credit score. Closing unused accounts removes available balances from the equation. This causes your ratio of used to available credit to increase, ultimately affecting your credit score.

Myth: Paying off bills is a quick way to boost credit. Over time, a good record of properly paying bills will improve credit. Credit reports reflect your long term history, scores do not change overnight.

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HAFA or Home Affordable Foreclosure Alternatives, is a program initiated by President Obama on November 30, 2009. HAFA helps families in distress who are having difficulty selling their homes. HAFA along with HAMP, the Home Affordable Modification Program, to revitalize the real estate market. HAFA provides incentives to families to take advantage of selling their Chicago home by means of a short sale (the home is sold for less than the value of the loan), or a deed-in-lieu of foreclosure (the home owner voluntarily gives the deed to the lender.  

HAFA helps families quickly sell their Chicago homes by giving them pre-approved short sales terms before listing the property. They are fully released from future liability for the first mortgage debt, and can receive $1,500 for borrower relocation assistance. HAFA also allows investors and servicers to receive financial assistance for administrative costs, processing fees, etc. The program sounds simple, but is actually quite complex with many guidelines and rules. HAFA officially began on Monday, April 5, 2010 and will end on Monday, December 31, 2012.

Here you can watch ‘An Animated HAFA Story’, an informative video explaining HAFA…

I am a Certified Distressed Property Expert (CDPE), trained in helping families in distress avoid foreclosure. Are you or someone you know behind on mortgage payments? You do have options! A short sale may be what is needed to save your, your family and your credit. Please contact me anytime for a private consultation.