Consumer Resources: REO Properties, Foreclosures and Short Sales in Montgomery County Maryland

While foreclosure is relatively low in Maryland compared to the rest of the country, the rate and number of foreclosures in the state has risen substantially. 'Short Sales' have risen dramatically, where owners offer their property for sale for less than what they owe on it, with prior agreement from the mortgage company(ies). Offers on these properties are subject to the approval of the bank(s).

If you are a buyer interested in short sales or foreclosures, please e-mail me at bobmyers4homes@gmail.com for a customized list of properties that I can show you. Please specify location and type of home. 


Worried About Foreclosure?
At settlement you gave the mortgage company the right to take ownership of your property through a process called foreclosure if you stop paying on your mortgage.

When you miss payments, even for as little as 60 days, you may be considered in default. The bank may start a collection process that puts you at risk of foreclosure.

If you are missing mortgage payments, or if you have received a notice from your lender asking you to contact them, don't ignore it. Call the bank immediately to find out what your options are.  Our Team has had clients who were able to renegotiate their interest rate and/or come up with a payment schedule to get caught up on their home in Montgomery County MD.
General information about the types of foreclosure sales and the foreclosure process in Maryland can be found at www.foreclosures.com/www/pages/state_laws2.asp?state=md.

 

Local Foreclosure Help for Maryland Home Owners

Here are some of the Maryland resources for those who may face foreclosure:

The NeighborWorks Center for Foreclosure Solutions was created to preserve home ownership in the face of rising foreclosure rates. Anyone in Maryland who calls 1-888-HOPE will be automatically connected to the staff at St. Ambrose Outreach Center, the official Maryland foreclosure counselors for the NeighborWorks Center. Homeowners who live in Baltimore may dial 311 to be connected automatically to qualified housing counselors who can advise them about foreclosure issues. For more information go to www.nw.org

The Baltimore Homeownership Preservation Coalition has trained professional housing counselors available to give consumers sound advice, contact their lender and connect consumers with local housing counselors at various Baltimore Homeownership Preservation Coalition member sites. The service is free, confidential and available 24 hours a day, seven days a week. To get more information call 1-888-995-HOPE or go to www.preservehomeownership.org

Consumer Credit Counseling Service of MD & DE, Inc., an accredited non-profit community service organization, helps individuals and families resolve financial problems through confidential budget counseling, debt management repayment program, and community education. For more information, call 1-800-642-2227 or go to www.cccs-inc.org.

The Maryland Department of Housing and Community Developments (DHCD) HOPE Initiative offers the Lifeline Refinance Mortgage program, which provides a refinancing option to Marylanders who are currently facing problems with an adjustable rate or other unfavorable mortgage. Contact 1-877-462-7555 or www.mdhope.org for help with nonresponsive loan servicers, mortgage fraud investigation or counseling on loan programs.

The U.S. Department of Housing and Urban Development (HUD) has created Tips for Avoiding Foreclosure, which provides information on housing counselors and legal assistance in Maryland, and information on its FHA Secure program, which helps homeowners refinance their adjustable rate mortgages. For more information see www.hud.gov/foreclosure/index.cfm.

HUD also has a list of qualified housing counselors. Contact a HUD-approved Housing Counseling Agency or call 1-800-569-4287 or TTY (800) 877-8339. For more information go to www.hud.gov/foreclosure/index.cfm.

 

Options for Avoiding Foreclosure = The Short Sale

Many homeowners facing rising interest rates on their sub prime adjustable rate mortgages and flat or falling home prices, are being advised to use a short sale to help them out of the difficult situation of mortgage delinquency or foreclosure.

 

What is a Short Sale?

A short sale is an "arrangement" between the current owner of a home and the current mortgage lender holding the mortgage to accept an offer for less than the total amount owed to pay off the home loan which also includes other obligations such as closing costs, property taxes, transfer tax, and/or commission.

In some cases, sellers may be in default on their mortgage and are potentially facing oreclosure. Life changes such as a divorce or job transfer may force a sale of their property, but some sellers find themselves in an upside down situation, meaning that they owe more than they can potentially realize from the sale of their property.


Short Sale Basics

The buyer of a property being sold in a short sale should be aware of several key issues. The contract is usually contingent upon the agreement of the sellers mortgage lender to accept the net proceeds of the sale as full payment for the underlying debt. This is often a long process, which can delay an anticipated settlement date, and buyers and agents should be prepared for this possibility. Indeed, the fact that the property is a short sale should be disclosed in the comments section of the Multiple Listing Service listing. The sales contract should also include a third party addendum, outlining that the contract is contingent upon the agreement of the sellers mortgagee to accept the net proceeds of the sale as full payment of the underlying outstanding debt.


Help with Short Sales

As always, if you are considering a short sale, or any real estate transaction, whether you are a seller or a buyer, it is important to seek competent legal and financial professional advice. Be sure you deal with a real estate professional with experience with short sale transactions.

 

Homeowners Beware: Foreclosure Rescue Scams

Distressed homeowners who face foreclosure are understandably frightened and looking for relief. They are prime targets for advertisements that promise help and rescue from their financial woes. Unfortunately for many homeowners in this already precarious position, they can unwittingly make their situation even worse, sometimes signing over the deeds to their most valuable asset as part of a foreclosure rescue.

In an article published in the June 25, 2007 edition of Business Week Online, The Foreclosure Rescue Racket, reporters Dean Foust and Brian Burnsed outline the general mechanics of these schemes. An individual or group contacts desperate homeowners from an online list compiled when mortgage lenders file a notice of trustee sale with the courts, the first step in the foreclosure process. Under the guise of helping the homeowner, the individual or group contacts these homeowners and convinces them that they can avoid losing their home by refinancing it.
The rescuer then arranges a deed of transfer with a rent to own plan, which will allegedly allow homeowners to buy back their home at some point. However, buried deep within the stacks of paper work is some form of quitclaim or gift deed, in which the homeowner has actually signed away his home to the investor. The rescuers then charge the former owner astronomically high rents which the homeowner cannot pay, making i impossible for him to stay in the home. Eviction follows, and the investor may then sell the home.

Not all programs to help homeowners keep their homes are scams; there are some legitimate services. To avoid the scams, consumers should follow certain best practices. First, call your mortgage company to see if it is willing to work with you to bring your payments current. Many established mortgage companies have created workout programs in response to rising
foreclosure rates and are willing to work with homeowners. Consider reaching out for help from reliable sources, including trusted counseling national nonprofits such as Neighborworks (1-888-HOPE), or local groups, including St. Ambrose Resource Center in Baltimore. Finally, seek expert and independent advice from a lawyer before signing any documents.


Articles and Publications for Consumers

The National Association of REALTORS has created several brochures to helpconsumers deal with issues concerning foreclosure and protecting their homes:

Concerned About Your Existing Mortgage? is available at http://www.realtor.org/home_buyers_and_sellers/protect_your_home.html.

It includes links to counseling services and foreclosure prevention programs.

Smart Home Financing, available at http://www.realtor.org/home_buyers_and_sellers/smart_home_financing.html provides consumers information about basic home finance and how to avoid predatory lending.

The U.S. Department of Housing and Urban Development has prepared Foreclosure Frequently Asked Questions for Maryland consumers, available at http://www.hud.gov/local/index.cfm?state=md

Freddie Mac has created a useful guide, How to Avoid Foreclosure Go to www.freddiemac.com/corporate/buyown/english/avoiding_foreclosure/

Fannie Mae also has some useful tips for avoiding foreclosure and working with your lender. Go to  http://www.fanniemae.com/kb/index?page=home&c=homeowners