| There are many issues and possibilities that | | | | to lose on the mortgage if it goes all the way through |
| homeowners need to be aware of when they fall | | | | foreclosure and is sold at sheriff sale. Properties |
| behind on their mortgage. Foreclosure laws, general | | | | typically sell for far under the market value at the |
| timelines, how and when the sheriff sale will be | | | | foreclosure auction, and banks that have made loans |
| conducted, and what options are available to help | | | | far higher than the market value can lose more than |
| them are just a few of these important issues. With so | | | | half of the original loan amount. Homeowners |
| many local real estate markets declining in value, | | | | attempting to work out payment arrangements with |
| though, numerous manipulations or downright fraudulent | | | | the bank will have a stronger negotiating position if |
| practices are being discovered on a daily basis. No | | | | they know that the bank has so much at stake. |
| issue has been more devastating than that of | | | | Of course, knowing the true current value of their |
| overvalued properties that were highly leveraged by | | | | homes will also give homeowners a better idea of |
| banks who knew the homeowners would not be able | | | | whether or not the property is worth saving at all. If |
| to pay for them for the long term. One of the most | | | | they purchased the home to live in and keep, then it |
| important items homeowners should have when | | | | may be worth trying to work out a loan modification or |
| attempting to avoid losing their homes to foreclosure is | | | | apply for a foreclosure loan from a different mortgage |
| an accurate valuation, so they are aware of any | | | | company. However, if the house was purchased |
| sudden decrease in the value of their homes. | | | | primarily as an investment that has lost a significant |
| There are numerous reasons to receive an accurate | | | | portion of its value in a few short years, with no |
| value, both in terms of finding out how to fight | | | | short-term recovery in sight, the foreclosure victims |
| foreclosure legally and through more common | | | | can examine the possibility of giving up the house and |
| methods. An overvalued appraisal that was done by a | | | | dealing with the financial consequences later. Especially |
| lender during a refinance may indicate fraudulent | | | | if the bank is not willing to work with them, it may be |
| inducement of debt, which means the bank gave the | | | | better to move on, rather than trying to prevent |
| homeowners a loan that the bank knew would never | | | | foreclosure despite an uncooperative bank. |
| be able to be paid back. There are numerous | | | | Overvalued appraisals were, unfortunately, quite a |
| examples in the news and online of homeowners who | | | | common occurrence in the pre-bust real estate |
| cashed out equity in order to do repairs or continue | | | | market. With investors caring about the quality of the |
| their consumption lifestyle, and they found out their | | | | loans they purchase, and lenders attempting to give |
| properties had gone way up in value, according to the | | | | mortgages that will not quickly default, accurate |
| bank's appraiser. | | | | appraisals are now being sought. These are exposing |
| However, now that they are facing foreclosure, these | | | | many of the worst practices of the boom, as home |
| same homeowners have found out that those | | | | buyers, real estate agents, mortgage brokers, lenders, |
| appraisals were only done in order to give them as | | | | and appraisers colluded to give homeowners the most |
| much money as they qualified for, based on very | | | | money they could qualify for, whether or not the home |
| loose lending guidelines. With the tighter lending policies | | | | was actually worth that much. Small starter homes |
| now being practiced by banks, coupled with numerous | | | | quickly rose in value, and everyone became an |
| other foreclosures across the country, these artificially | | | | investor, looking for the lowest monthly payment right |
| inflated values have dropped drastically in some areas, | | | | now, rather than taking a more stable, although higher, |
| sometimes by 40% or more. This makes it almost | | | | payment. Having an accurate estimate of the value of |
| impossible for homeowners to find some solution that | | | | their properties can give these homeowners the tool |
| will stop foreclosure, because, even considering a | | | | they need to begin finding out the truth of what kind of |
| down payment of 20%, they will owe more than the | | | | loan they were given, how they played into the hands |
| home is worth. The bank will have to accept less than | | | | of these commission- and profit-seeking companies, |
| what they are owed if the foreclosure victims attempt | | | | and the fact that they are left with the mess and the |
| a loan to avoid foreclosure or selling the house. | | | | danger of losing their homes. But an accurate valuation |
| Having an unbiased, accurate value of their property | | | | will also help foreclosure victims start making realistic |
| will also allow homeowners to determine what options | | | | plans about what they can do to save their homes, or |
| they are qualified for, and how much the bank stands | | | | whether they are even worth saving at all. |