If you or someone you know are thinking about foreclosure or are behind in the monthly mortgage payments, then we encourage you and anyone else to read about our Alternatives. 

Did you know:

* EVERY foreclosure listed for sale IS IN THE MLS!
* MOST Pre-Foreclosures are listed for sale in the MLS!
* Pre-Foreclosures can be your VERY best investments!
* Pre-Foreclosures CAN be bought WITHOUT your getting a mortgage!!!!! (incredible...but TRUE)
* Virtually EVERY foreclosure is listed AT THE FULL APPRAISED PRICE! But...because they are all sold AS-IS and they   ARE Foreclosures....they tend to sell for below market value and DO represent very good bargains.
* ALL foreclosures are sold with a Special Warranty Deed instead of the usual General Warranty Deed....this means that you CAN NEVER go back to the seller (mortgage company) in case of ANY title problem! You really have nothing to worry about because the seller buys title insurance just like all other regular sales!
* Many foreclosures are cleaned, painted and carpeted to bring the mortgage companies the highest prices! (except for HUD's)
* BEFORE the actual foreclosure, (pre-foreclosures) most all mortgage companies WILL take an amount WAY BELOW THE AMOUNT OWED!!!!
* HUD is just a regular foreclosure that had an FHA mortgage!
* HUD foreclosures are a little bit different than other foreclosures.....they accept bids for the first week....then, if they do not like the bids....they keep it listed like an other foreclosure/MLS listing: looking at each offer as they come in.
* HUD has historically NOT accepted ANY offer less than 93% of asking price!
* The foreclosure process REQUIRES the property to be auctioned of at the court house steps (first Tuesday of every month).....the beginning bid is equal to the mortgage balance! 
* You MUST have CASH to buy at the courthouse steps....AND it is VERY risky!! Most buyers wait until the Lender takes the house back (at the courthouse steps) and then they are ALL listed in the MLS.
* You MUST be pre-approved for a home mortgage IN WRITING before ANY offer can be submitted on a Foreclosure!

All of us want a bargain.
There are no better bargains in real estate today than the purchase of distressed properties at substantially less than fair market value. The process is not complex, but success in this field requires a large amount of time to research and a more modest amount of money.

Five Ways to Acquire
In general, there are five basic ways to acquire foreclosures at discounted prices. All but one of them permit the buyer to pay for qualified assistance from other sources such as a real estate agent, title and / or escrow company. Unfortunately, the most popular technique (buying properties at the trustee's sales) allows no such luxury. The purchasing process at the trustee's sale requires each buyer to make his own thorough investigation of both title and debt on the chosen property within a limited time frame.

Delinquent Seller
The first and simplest way to buy properties under the fair market value arises when the delinquent (not defaulted) owner is uncovered. The delinquent owner will not have made recent payments of principal, interest, taxes or insurance and / or may have reduced the value of the property through benign negligence or lack of funds. When the delinquent owner realizes that he will be unable to meet the commitments on promissory notes and trust deeds for an extended period, he may choose to sell his property even at a discounted price rather than proceed through the foreclosure process. But because of his pride or self-esteem he may choose to wait it out hoping for a miracle and not realize that time is not on his side, then it becomes too late to shun the unavoidable NTS auction.   

The wise buyer will point out to the delinquent (and later defaulted) owner how he will be harmed by proceeding through the brief foreclosure process to the trustee's sale. At that point, the owner will lose his property, lose his equity, reduce his credit standing as a result of the recorded foreclosure and may have taxable income due the IRS for the amount of the debt reduction (elimination of the trust deed debt) resulting from the trustee's sale. Selling to an interested buyer at a discounted price may well be the most convenient solution for the troubled, delinquent owner.

Defaulted Seller
The property owner becomes a defaulted owner when the trustee for the beneficiary records a Notice of Default. During the following three month plus three week periods, a Notice of Trustee's Sale also will be recorded and published in a local adjudicated newspaper once a week for three weeks just prior to the trustee's sale. Live-in buyers of the property of the defaulted owner may negotiate any reasonable purchase price and terms for the property with the defaulted owner. Investors who seek to purchase the primary residence of a defaulted owner of one to four units and who are not related to that owner must work with the equity seller under the restrictions of two California Civil Codes which can make such purchases more difficult. These restrictions require the use of a special contract with a Notice of Cancellation, permit the equity seller to pursue the equity purchaser for unconscionable advantage for two years after the sale, and eliminate the use of outside assistance in the pursuit of a foreclosure property. Investors who unwittingly or intentionally become foreclosure consultants to equity sellers may also place themselves in jeopardy under certain conditions.

Trustee's Sale
Most purchasers of foreclosures prefer to acquire their properties at the trustee's sale. At this time, it is possible to make property purchases without being in contact with the defaulted owner or foreclosing lender. Money talks. Anyone with money may make a purchase regardless of credit, race, religion, etc. The verbal auction permits the highest bidder to acquire a property by paying off only the remaining balance on the foreclosing loan regardless of the fair market value of the property. Debt recorded after the date of recording of the foreclosing loan is eliminated. Problems of unanticipated repair ,eviction, payoff of superior loan(s), possible IRS redemption and inadequate research can present formidable obstacles to the inexperienced buyer.

REO Lender
When a trustee's sale is held with no bidder present, the property is said to be "sold" to the foreclosing lender. The REO lender usually will sell the property rather than retain the property as part of the lender's non-performing assets. Finding that lender who will well the property newly acquired at the trustee's sale at a substantial discount is not easy although it is possible through a careful selection of lender sources of such properties. Individuals (not lending institutions) normally present better opportunities to purchase at a discount.

Friendly Junior Note
The fifth way to buy foreclosures is just a bit more complex but is an attractive way to acquire properties with less competition than purchasing at the trustee's sale. If the holder of the junior loan to the foreclosing loan agrees to sell his promissory note and trust deed at a substantial discount, the purchaser of the junior loan may cure the underlying senior loans and then foreclose himself on the newly acquired junior loan. The sale of the property through the junior loan can bring immediate return on the face value of the junior loan of the acquisition of the property with attractive equity

Note: The first step in purchasing a home, any home, is to get pre-qualified. If you’re purchasing a foreclosure home, then you have to be pre-approved with a letter from your lender. Next step is to avoid any Foreclosure seminar, because they want to charge you ($2,500.00) for the class, hands-on workshop and most don’t work. Watch out for the “SUBJECT TO” application, it can come back on you and you will get sued. There are a lot of scams out there waiting to take money from anyone. To get the most current NOD’s in your area, contact a title company for a list of properties with names and address’s. Once you have the list, contact the distressed owner and make an appointment, be very careful of what you say. We do not suggest that you go knocking on their front door. You don't know what type of character you will confront. At this stage, their attitude or disposition might not be what you expected. Don’t offer to pay 50% to 75% of their equity and take over their loan, it won’t work. Most distressed owners have a large default loan that is almost as much as their equity. The REO market isn’t as good as it looks. Banks are in the money business, and they know a good deal when they see one. The NTS can sometimes be a real nightmare; you can’t inspect the property before you make a bid on it. If you are lucky enough to find a home at 10% to 30% off market value, chances are that's what it will cost to make the home livable. Have you ever seen a foreclosure home thrashed? Once you've seen one, you'll understand what the 25% to 50% off market value really means. The moral of the story is that; if it sounds to good to be true, homes for 50% off market value, chances are it is. After all, why aren't all the people doing it?

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