Attention all investors: As foreclosures continue to mount to record numbers, there are any number of opportunities for investors to acquire foreclosed properties relatively inexpensively. One of these that is seeing more and more use with the rising tide of foreclosed properties is the auction. Frequently, large lenders will bundle chunks of their REO portfolio of properties together and have a professional real estate auction firm dispose of the properties by public auction. Advertised in advance, they usually provide catalogs of the properties to be sold at a given auction, along with times and dates of not only the auction, but also when the properties can be viewed by prospective buyers before the auction date.

These can be very worthwhile ways to obtain real estate below market prices. As an example, I listed a foreclosure in northern California for $575,000. Only a year earlier it had been purchased by the folks who lost it to foreclosure for $605,000. After three months with only minimal interest from potential buyers and their agents, the owning bank added it to an auction. It sold there to its present owner for $416,000! That's not a misprint! Roughly 1.5 years after going for $605,000, it was purchased by an investor for nearly one third less than its former price. There are many other similar opportunities in some of the auctions now happening. Check on-line for info.

This is for those facing possible foreclosure and still able to obtain a new loan. Usually, if you fall into this group of defaulting owners, this is your first time in these straits, and your credit is, with the exception of your present circumstances, still fairly good. You can still qualify for a loan, although the new loan will likely be higher than the rate would be for someone not in your situation. Having said all of that, as rates continue to come down into the high 5's for 30 year fixed rate loans, this is definitely the time to seek a new loan to pay off the one that is currently causing you problems. Assuming you are employed and have resolved whatever issues led to your current default, you should immediately get in touch with your lender to see about replacing the existing loan with a new one at a lower rate than your current rate. You may be pleasantly surprised.

Are YOU in Trouble?

As the foreclosure tsunami continues to roll forward, many folks are unaware of the fact that they CAN do something to stall or avoid completely the potential loss of their home by foreclosure. The MOST IMPORTANT THING TO DO: As soon as you miss a payment, or think you're going to have problems keeping up with the payments for whatever reason, CALL YOUR LENDER!! Put them on notice of your problems and ask to speak to whomever oversees such situations. It is in the bank's interest to help you avoid losing the house to them. If they foreclose, they lose money, have more regulatory scrutiny and the problem of selling your home, none of which they want.
Although it varies by state, once you miss a payment, the bank must formally record a notice of default to actually start the foreclosure process. Once that is done, they have about three month and change that must pass before they can actually have the house sold at public foreclosure auction. So, the sooner you take control and call them, the better your chances will be at keeping your home. They may agree to change the type or terms of your loan; they may agree to defer some of your payments--but you MUST MAKE THE CALL!

Just a quickie! For those of you facing default and/or foreclosure in the state of Colorado, a new state law has just been passed that may give you a small breather. It extends the time you are permitted from when you are initially declared in default until the time the lender holding your note can foreclose. It also allows you a little easier time on reinstating your loan--you may not have to pay the not in full to avoid foreclosure under the new terms. Interested? Contact your attorney in Colorado or drop us a line.
Most important of all--Have a Happy and Healthy New Year!!