Handling the Foreclosure Crisis

Foreclosures are still on the rise. On January 13, 2011 City Business reported that the New Orleans area had the 95th highest foreclosure rate in 2010 among 203 markets tracked nationwide. Foreclosure activity was up 36.25 percent over 2009 in the area comprised of Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John and St. Tammany parishes. There were 7,822 filings for a foreclosure rate of one in every 57 housing units.

If you or someone you care about are one of the many homeowners worried about this happening to you, are you asking yourself, "Where do I turn for help?"  First let me say that there is nothing to be embarrassed about and there are many other people in your position.  You need to seek help now before the problem gets worse.  Most people are afraid to turn to their local Realtor because they think they will have to pay money out of pocket that they don't have.  What they don't realize is that an experienced Realtor in the area of Short Sales and Foreclosure can actually help them, and most of the time without the homeowner spending any extra money.  You can talk to your Realtor to find out if a Loan modification is best for you, or if selling your home would be best.  They can show you what questions to ask your Mortgage Company, or in some cases with your authorization, talk to them for you.

Maybe you are not the one facing foreclosure but worried because it is happening all around you.  Below are several links to more resources to guide you.  This will explain more on how to talk to your Mortgage Company, what a short sale is and how this may help you.  If you are a homeowner in a neighborhood with foreclosures, you may want to read up on how this will effect you. 

Our next Blog will be the next Chapter on Foreclosures to continue this Foreclosure Resource Guide.  So please tune in...

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  Foreclosure Alternative: The Short Sale

  A short sale is far from hassle-free, but it’s a better alternative than foreclosure. And now you’ve got a little help from your friends in D.C. Here are the facts about short sales and how to get started. Read
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  How the Foreclosure Crisis Costs You Money

  Foreclosure may seem like someone else’s problem, but when it happens in your neighborhood, it’s going to cost you money, too. Read
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  How to Talk to Your Lender About Foreclosure

  When facing foreclosure, the first step is to get in touch with your lender to discover your options. Read

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FIRST TIME HOMEBUYER INCENTIVES & 7 STEPS FOR HOMEBUYING

7 Steps to Take Before You Buy a Home 

First Time Homebuyers are often a little worried about getting started in the process of buying a home and don't know what to do first.  Below are 7 steps that most experts would agree on, and having a Realtor you trust to walk you through these steps is proven to be very helpful.  By doing your homework before you buy, you’ll feel more content about your new home.  Having a good Realtor on your side looking out for you can be an important key- but for a first time homebuyer...  Priceless
 

1. Decide how much home you can afford
Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider the necessary homeowner costs which must be covered: property taxes, insurance, maintenance, utilities, and community association fees, if applicable.


2. Develop your home wish list
Be honest about which features you must have and which you’d like to have.  Remember, this is your first home, and you may be able to work up to those like to haves the next time, but you need to be able to make payments on this one first.

3. Select where you want to live

Drive through the neighborhoods you think you may be interested in.  You may want to make a list of your top-five community priorities, such as commute time, schools, and recreational facilities.

4. Start saving
Have you saved enough money to qualify for a mortgage and cover your downpayment?  Even though ideally you should have 20% of the purchase price set aside for a downpayment, an FHA loan only requires 3.5% downpayment which can be a lot easier for a first time homebuyer to obtain.  A small downpayment preserves your savings for emergencies and you will still need to consider closing costs.

But Remember...   The lower your downpayment, the higher the loan amount you’ll need to qualify for, and the higher your monthly payment.

5. Ask about all the costs before you sign

A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area—including home inspections, title and attorneys’ fees. Keep in mind the extras you’ll also want to buy after you move-in, such as window coverings and new furniture but don't buy these until you are closed on your new home.

 6. Get your credit in order

Your REALTOR® can help suggest several mortgage representatives to find out how your credit stands and you can pick the one you feel most comfortable with.  You can also order your credit report directly - You’re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion.  A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 - 640 for a home mortgage.

 7. Get prequalified

Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.

If you’re self-employed, you’ll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Other web resources are listed in link below in the Homebuyer Training Voucher Program under Cerified Home Buying Training Agencies.

Get a free credit report from each of the three credit reporting bureaus