The Realtor & Investor's Complete Step by Step Guide To Mastering Foreclosures By State (Insider Secrets to Finding, Listing, Selling AND Profiting from Foreclosure Properties in ALL 50 States!)
By Mark Gibbons
()
About this ebook
Why " The Realtor and Investor’s Complete Step-by-Step Guide to Mastering
Foreclosures by State..." eBook and why now??
When you scan the search engines and stuff you are probably a little overwhelmed by all the varieties of books on foreclosures (nothing on foreclosures by state, though) that are out there. I mean who wouldn't want to write a book (or two, or three) about a subject that is probably ALWAYS in the evening news, right?
Well, that was NOT our motivation on bringing you this eBook. Our motivation was to simply give the best information we possibly could in an effort to just "do our part" as real estate professionals to help other real estate professionals through what may be one of the most difficult things they could deal with as real estate professionals - the foreclosures by state crisis in this country.
You see, guys, this mess we are in is not really going away any time soon. Yeah, we hear the same talking "pin-heads" on the news and other media outlets that you do but do you really think THEY know what's going on when they are typically the same ones who a few short years ago were saying BUY, BUY, BUY when people should have been told SELL, SELL, SELL??
Nah!!
But, I digress...This eBook (and a hard copy is also available if you so desire) is simply designed to give you information (and a LOT of it at that) to help you make sense of what is going on TODAY and how you, as a Realtor or investor, can carve a niche out for yourself from it.
WE HOLD NOTHING BACK HERE!
We just wanted to level the playing field, so to speak, with this eBook. If you are a realtor, or investor, you can spend weeks, if not months, (not to mention thousands of dollars) compiling all this information for yourself about foreclosures by state...probably much longer...and unless you have nothing but time (and disposable income) on your hands that should not be your first, or most prudent, choice.
SO WE'VE DONE ALL THE WORK FOR YOU!
Like we said earlier, there are a lot of books you could buy that give very limited information about this or that, as it relates to foreclosures, but this is the only book that we know of that gives you clear, complete and comprehensive, step-by-step information all about foreclosures by state and what you can do to capitalize on this market NO MATTER WHICH OF THE 50 STATES YOU ARE IN!!
When you add this robust eBook to your reading/learning library, you will find contained within it's pages:
1. The REAL cause of all these foreclosures out there (the answer may surprise you).
2. Why the "Big G." is the worst place to turn to to fix the problem.
3. How to wade through all the "legalese" out there and MAKE MONEY anyway!
4. The different types of deeds out there and what they mean to you, the seller AND the buyer.
5. The differences between a mortgage and trust deed foreclosure.
6. How a judicial foreclosure works.
7. How a "Power of Sale" works.
8. You may be a "newbie" to foreclosures, real estate or both but that doesn't mean you have to make this HUGE "newbie mistake"!
9. The sneaky little technique now used by the lenders to virtually eradicate ALL those buyers who want to use "stated income criteria" to get a loan.
10. If you were thinking the real competition for foreclosures by state is other Realtors or investors you would be DEAD WRONG!!
11. The absolute BEST source for your future clients and how to get this information for less than a cup of java a day!!
12. Why you NEVER ask for a "foreclosure list".
13. The BEST way to contact these distressed home-owners BY FAR!!
14. What is the one thing you MUST BE CERTAIN the seller has before you take the listing or have them sign a contract.
15. How to take ALL this information and make anywhere from $10,000 - $50,000 a month, OR MORE!!
...and much, much more!
Truth be told, even if you are a home-owner facing foreclosure by
Mark Gibbons
Mark Gibbons is the Lead Business Developer for MYM Business Services, LLC. His professional background has been in the areas of speech communication, marketing, executive wardrobe creation, business development, entrepreneurialism, relationship marketing, insurance, sales, real estate investing and psychology. He has traveled extensively to several countries and enjoys exploring new places and cultures. As an avid public speaker, he has spoken before several groups including business, civic and religious organizations on topics ranging from “Proper Dressing for the Business Professional” to “The Five Pillars of Effective Networking”. He now shows businesses the power of the HMA Marketing System which, for the past 20+ years, has helped small to medium sized businesses increase revenues and profits into the tens of millions of dollars. He is currently exploring his passion for "all things literary" by co-authoring, editing and publishing several eBooks including: "HOW TO SELL MORE BY USING THE RIGHT WORDS FOR ADVERTISING ANYTHING", "How To Lower Property Taxes (Legally)", "How To Make QUICK Cash ($1000-$5000 FREE & CLEAR within 30 days)", and more . These other works may be available elsewhere. You can reach Mark directly at 954-MOREBIZ (667-3249).
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The Realtor & Investor's Complete Step by Step Guide To Mastering Foreclosures By State (Insider Secrets to Finding, Listing, Selling AND Profiting from Foreclosure Properties in ALL 50 States!) - Mark Gibbons
THE REALTOR AND INVESTOR COMPLETE STEP-BY-STEP GUIDE TO MASTERING FORECLOSURES BY STATE (Insider Secrets for Finding, Listing, Selling AND Profiting From Foreclosure Properties in ALL 50 States!) - Smashwords Edition
(a print edition of this book is also available at select retailers)
By … Arlene Paukert, Mrs. Real Estate
&
Mark E. F. Gibbons
© Copyright 2006-2099 – Road to Wealth, Inc. All Rights Reserved.
W. Palm Beach, FL 33411
E-mail: service@roadtowealth.com
The Realtor & Investor’s Complete Step-by-Step Guide to Mastering Foreclosures by State
© Copyright 2012-2099 by Road to Wealth, Inc./Arlene Paukert & Mark E.F. Gibbons
Reproduction or translation of any part of this work beyond that permitted by Section 107.108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful.
Forms and scripts may be reproduced, photocopied, or scanned by the purchaser of this book only for his or her own use but not for resale. Purchasers of this book may use all materials and forms included in this book without written permission of the author or publisher.
Requests for permission for any other purpose or further information should be emailed to:
Arlene Paukert
Mark E. F. Gibbons
Road to Wealth, Inc.
West Palm Beach, FL 33411
Email: service@roadtowealth.com
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
****
DISCLAIMER
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. However, the subject of real estate is so vast and subject to different laws and regulations in every state and these laws and regulations are subject to change. If legal, accounting, or other expertise is required, the services of a competent professional should be sought.
Neither the author nor the publisher are claiming any financial results because each individual is different, has different approaches, beliefs, and abilities. Examples of earnings potential are for illustration purposes only. Please seek appropriate counsel for any tax or legal questions.
The information presented herein represents the view of the author as of the date of publication. Because of the rate with which conditions change, the author reserves the right to alter and update his/her opinion based on the new conditions. This book is for information and entertainment purposes only. While every attempt has been made to verify the information in this book, neither the author, publisher, affiliates, nor partners assume any responsibility for errors, inaccuracies, or omissions. Any slights of people or organizations are unintentional. If advice concerning legal, real estate, or related matters is needed, the services of a fully qualified professional should be sought. This book is not intended as a source of legal or accounting advice. You, the reader, should be aware of any laws that govern business or real estate transactions or other business practices in your country, state, or county. Any reference to any person or business whether living or dead is purely coincidental.
****
TABLE OF CONTENTS
FOREWORD
CHAPTER 1 - Introduction to Foreclosures
CHAPTER 2 - The Legalese
(aka Basics) of Foreclosure
CHAPTER 3 - My First Foreclosure …A Disaster
CHAPTER 4 - Why Foreclosures Will Be Important For Your Business
CHAPTER 5 - How To Find Pre-Foreclosure Properties
CHAPTER 6: How to List Your Pre-Foreclosure Leads
CHAPTER 7 - The Foreclosure Procedure
CHAPTER 8 - The Foreclosures by State Laws & Procedures (in alphabetical order)
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
CHAPTER 9 - Anatomy of Short Sales
CHAPTER 10 - How To Do A Short Sale
CHAPTER 11 - Bankruptcy and Short Sales
CHAPTER 12 - The Land Trust
CHAPTER 13 - If You Decide to BUY Pre-Foreclosures
CHAPTER 14 - How to SELL Pre-Foreclosure Properties
CHAPTER 15 - The Foreclosure Teamwork Makes the Dream Work
Strategy
CHAPTER 16 - Keep it Simple!
CHAPTER 17 - Odds and Ends
, or FAQs, About Foreclosure
BONUS PAGE - TOOLS OF THE TRADE
****
FOREWORD
Foreclosures are still at an all-time high across the country. While there are signs that the slowing market may be heating up again (in certain areas of the country it NEVER STOPPED BEING HOT) and The Fed lowering those interest rates to levels not seen in decades, all those exotic
loans have come due and are now payable. As a result of all this and the now much stricter federal lending guidelines, this will easily create 60 million foreclosures TOTAL over the next 2-3 years, barring extreme government intervention.
This market was truly poised to explode and HAS!
It doesn’t matter if you are in a hot
real estate market or a cold
real estate market, there are plenty of foreclosures for you to list and sell. If the economy is strong, there will always be people who, for many reasons – job loss, illness, or divorce, to name a few – cannot make their mortgage payments and default on their loan. In a weakened economy, the number of mortgage defaults skyrockets – which creates even more opportunities.
Don’t rush through the book. Think about what you are reading and how you can incorporate the information and techniques into YOUR business.
Arlene Paukert
a.k.a. Mrs. Real Estate
P.S. – However, if you are a homeowner, or a new real estate investor, this book will be able to give you some keen insights into what YOU can expect the market to do/not to do as it pertains to your little piece of the American Dream
. As such, don’t overlook this book and the nuggets contained inside that could also help you!
Back to TOC
****
CHAPTER 1 - Introduction to Foreclosures
An estimated 80% of home mortgages are what they call exotic
loans. They are ARMs (Adjustable Rate Mortgages) starting with a 1% interest rate – or less. In recent years pre-2006, the government allowed all the lenders to go wild with no restrictions on loans. If you could fog a mirror, you could qualify for a home mortgage. The stated income loans got totally out of hand.
The problem is … the fix is NOT in new government guidelines. Too late for that. Here’s why:
Let’s say you bought a $300,000 home. The real mortgage payment amortized over 30 years would make your mortgage payment somewhere around $3,000. However, by taking out one of the exotic
loans, you would only have to pay $900 a month.
Why? In many cases, the lender gave you a menu of five different payments for you to choose for that month. It’s just human nature for people to select the lowest payment. For the lender it doesn’t matter because they keep adding the difference onto the back of the loan – creating negative amortization for the borrower.
Here are some of the obvious problems …
The majority of people could not make the monthly payments on a fully amortized loan.
By choosing to make the lowest payment, they forced the lender to add the difference onto the back of the loan.
Real estate values have gone down, while interest rates have gone up. The equity that homeowners were counting on to equalize the negative amortization was wiped out.
The new federal guidelines for home mortgages forced people to abandon their homes. When/If they refinanced, they won’t be able to afford the high monthly payments of a fully amortized loan … many won’t even be able to qualify for these loans.
Since the majority of exotic
loans are usually for terms of 3-5 years, we can expect millions of foreclosures over the next several years.
The new federal lending guidelines will have an impact on home buyers as well. They will be limited in the type of financing they can obtain, thereby limiting the number of houses that will be sold.
Lastly, politicians on the local level have been spending money like drunken sailors. They obtained these funds by taxing properties to the max. This, too, has caused problems for homeowners. Between the new higher monthly mortgage payments and sky-high property taxes, many homeowners may have to leave their homes and be foreclosed upon.
Back to TOC
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CHAPTER 2 - The Legalese
(aka Basics) of Foreclosure
What is a foreclosure? It is the legal way the owner (the lender) of a mortgage (called the mortgagee or grantee) is able to begin a multi-stage process that ends with the property securing the mortgage being sold at auction or turned over to the lender. In some states the mortgage is called a deed of trust and the lender is called the beneficiary.
If terminology like mortgagee, grantee, trust deed, or beneficiary seems confusing, then you realize why we are beginning with explanations of certain terms used in documents, which are the basis for foreclosures.
There are special key
words used in the foreclosure process. These words carry exact meanings to different stages of real estate, including the land, improvements to the land (like a home built on it), rights to the property, pledges to borrow and repay, etc. These key words include terms like deed, note, mortgage, trust deed, security deed, mortgage foreclosure, trust-deed foreclosure, judicial foreclosure, power of sale, etc.
We’ll start with the definition of foreclosure and then move on to the key words and phrases involved with the foreclosure process.
FORECLOSURE – A legal remedy available to a mortgagee or grantee (the lender) when the borrower does not comply with the terms of the security instrument. An orderly process is begun and continues through various stages until the property pledged in the security instrument is sold at public auction to satisfy the lender’s claim.
DEED – A written document that transfers title to real estate. There are different types of deeds, depending on where you are located. Different areas use different deeds.
GENERAL WARRANTY DEED – The grantor (the seller) agrees to defend the grantee (the buyer) against all attacks against title. The deed contains language that the seller warrants the property is freely his to sell and that no one else is claiming the property belongs to them.
QUIT CLAIM DEED – The grantor releases any claim he may have on the specific property. Its purpose is to remove a potential or actual cloud on the title to the property. It does not warrant anything. The warranty deed is preferred to any other type because it conveys, in most cases, the most comprehensive degree of ownership. It evidences that ownership in the granting and conveyance of clauses of the deed. I strongly suggest you don’t use a quit claim deed as many courts don’t want to recognize it. Since people may ask you about it, I included it here.
TRUSTEE’S DEED – A conveyance of title from a trust to another party. The grantor of the trust, through its fiduciary or agent, is called the trustee. The trustee acts only upon written direction of the beneficiaries of the trust.
CERTIFICATE OF SALE – A document executed in many states by the county clerk, which conveys title to real estate to the successful purchaser at a foreclosure sale. It doesn’t guarantee anything. It just says that an individual bought a certain property and that no warranties are made of any kind.
NOTE & MORTGAGE – A mortgage consists of two parts:
The note, which is considered to be evidence of the debt.
The mortgage contract, which secures the debt.
The note is the promise to repay the loan. In the mortgage contract, the borrower agrees to be subject to certain legal action if he doesn’t repay the loan as promised.
The borrower is called the mortgagor because he gives a mortgage to the lender, to whom he owes money. The lender is called the mortgagee.
TRUST DEED – A security instrument similar to a Warranty Deed. The seller is the grantor or trustor. The third party appointed by the lender to hold the trust deed is called the trustee. The lender is the beneficiary.
Again, this is a security instrument and should not be confused with other types of trusts.
SECURITY DEED – Georgia is the only state using a security deed to secure a loan on real estate. The owner of the property is called the grantor and the lender is the grantee. As the grantor, the owner actually vests title to the holder of the security deed and has only equitable title until the debt is paid. The laws in Georgia state that a mortgage is merely a lien. A security deed actually passes title to the property.
There are different foreclosure procedures across the country. We’ve included an entire chapter regarding the process in each state. In here we’ll just give you some of the general basics.
It goes without saying that the lender will use the easiest and quickest method to foreclose on the property. The prime requirement in most states is that there be an orderly process by which the grantor or mortgagor is given a final opportunity to cure the default.
If the default is not cured, then there must be an equitable procedure to expose the property to public sale in order to yield the best price.
The objective and the result are the same whether the sale is judicial or by power of sale.
Generally, the breach of any obligation of the grantor or mortgagor under the security instrument will create a default. This includes failure to pay taxes, insurance premiums, or even not keeping the property in reasonably-good condition.
Mortgages and security or trust deeds are used as collateral for the loans. The lender is looking to the property as its quality collateral – not the ability of the borrower to repay the loan.
However, some states have statutes that attempt to protect the homeowner against being unfairly pressured into signing away the major equity they have built up over the years they have owned the property. An example is the state of California. They have a unique 5-day right of recession period during which an investor cannot do anything to pressure a homeowner who is in default if that homeowner decides to cancel the equity purchase contract on their home.
MORTGAGE VS. TRUST DEED FORECLOSURE – The differences between a mortgage or trust deed is important only in the event of a default.
The homeowner can lose his property very quickly if he signed over a trust deed or security deed with power of sale. If his mortgage or trust deed can be foreclosed on by judicial process, he has more time – due to the process that must go through different stages until the sale can take place.
Statutes differ from state to state. In Michigan, a mortgage that creates a lien on property is generally sold by power of sale procedures. Florida, however, uses the judicial process to foreclose on a mortgage.
JUDICIAL FORECLOSURE – The lender files suit against a borrower after the borrower has been delinquent in paying monies owed or performing some other duty required by the terms of the mortgage or deed of trust.
Before the suit is filed, the lender usually sends the borrower a certified letter notifying him of the breach of the terms, and giving him an opportunity to bring the loan current. If not, the lender files the foreclosure and accelerates the note
secured by the mortgage.
In Florida, if the default isn’t cured within a statutory period, usually 20 days from the time certain events occur, the lender will file a motion for final judgment. Most of the time the lender will even accept reinstatement of the mortgage even after this motion has been granted by the court.
SALE – Once the sale date has been set, the lenders can become more difficult to deal with. If the loan is guaranteed by the FHA or VA, they can be made to accept a reinstatement, almost up until the time of the sale.
If the borrower does not reinstate the loan, the property is sold at public auction. Some states allow homeowners who lost their property in foreclosure to repurchase the property – for all cash in the amount of the highest foreclosure bid – within a specified redemption period.
POWER OF SALE – This method of foreclosure is much simpler than a judicial foreclosure. The power of sale
clause gives the trustee or grantee (lender) the right to sell the property at public auction without filing a lawsuit.
The lender tells the trustee to record a default. The trustee then verifies with the borrower that a default has occurred. If the default has occurred, the trustee will proceed through the stages prescribed by law until the property is reinstated or sold at public auction.
Under a security deed, the title is already vested with the lender. The lender’s objective in foreclosing is to obtain relief from the loan being in default and extinguish the borrower’s equitable title.
DISCLAIMER: Please consult with proper legal counsel before implementing any of the ideas put forth in this book. The foreclosure process is very complex. All 50 states, plus many counties and cities have different laws and regulations. Furthermore, those laws and regulations are always subject to change - even since the publication of this book. Neither the author, editor, publisher or distributor will be held liable for your actions or lack thereof.
(Editor’s Note: Our actual hardcopy book comes with access to several essential forms and resource information which are NOT included in our eBook edition. However, you may also find additional info not provided here by simply going to http://www.roadtowealth.com/forecl.htm. There you will be able to take advantage of some exceptional resources that we have available to help you better understand and apply the contents of this jam-packed eBook!)
Back to TOC
****
CHAPTER 3 - My First Foreclosure …A Disaster
Thinking back at what happened, I just can’t believe that the largest real estate office in Las Vegas – with all the experienced people in management – let me go out on a limb with my first foreclosure transaction. This is a true story … and an excellent lesson for the newbies
in the business.
That’s what I was at the time … a newbie.
I was totally green and completely inexperienced in real estate and foreclosures.
The broker told all the new agents to get the newspaper, call For Sale By Owners (affectionately called FSBOs), go to see them, and get their listing. So, that’s exactly what I did.
I saw this ad in the paper and called. Shirley F. had been trying to sell by owner without much luck. So, I got the listing … this was my second listing, having been in the business for all of two weeks. Of course, I took the listing at 7% commission.
The house was showing signs of neglect because the seller didn’t have any money to do the necessary repairs. However, the property was in a superior location. Anyway, step one for an agent is to get the listing. If you are an investor, your first step is to put the house under contract.
If you don’t have the listing or a purchase contract, the lender won’t even talk to you.
This was my second FSBO listing within a few days. I thought, Yahoo, I am on the way to making serious money!
At the time, I didn’t realize that taking the listing is only Part A. Selling the house is Part B. A successful closing and cashing the commission check is Part C.
Since I was well-trained by my broker as to taking listings, I asked the seller for the mortgage paperwork, the deed of trust, and the monthly statements. A quick look at the monthly statements told me that this woman had already accomplished a record. She had stayed in the house for more than 24 months without paying a nickel to the mortgage company!
When I appeared on the scene, the lender was losing patience and was ready to go ahead with the case. The sale was scheduled to take place in two weeks. I made several calls to the lender and their lawyers. She had around $24,000 in unpaid monthly payments. There was around $14,000 in attorneys’ fees. Her ex-husband was a Veteran, so they purchased the house with $1 down … which meant