Foreclosures on Long Island, New York

October 23rd, 2007 category: Real Estate News

Foreclosures, pre-foreclosures, short sales are in evidence on the North Fork of Long Island. A quick explanation:

A pre-foreclosure arrives in the form of a lis pendens - the homeowner is notified that the bank will be claiming the property from the mortgagee. It is essentially notification to the homeowner of a pending lawsuit.

As payments are skipped out of necessity (with a market that has properties available for less than the LOAN BALANCE for these unfortunate sellers) the “payoff” increases by the amount in arrears, with additional penalties. An individual desiring a sale is finding that, month after month, the payoff amount is getting increasingly (and alarmingly) out of line with the current value of the home.

If you are in a situation that requires input, a good site to check out is: www.banking.state.ny.us.com. Most of your questions can be answered here, and they indicate that potential assistance is available. Another site is offered by the Community Development Corporation of Long Island. They can be reached at: 888-995-HOPE.

Many homeowners have been stunned with the speed at which mortgage payments have accelerated, and are discovering that the adjusted payments are simply too high. A recent meeting held with one such homeowner was an example of a nightmare: a retiree, this homeowner refinanced two years ago. While the payments remained in the 2000./month range for a time, the increases came fast and furious- her loan is now adjusted every three months. It is hovering in the 4,100. month range.
Working with this type of listing is a true challenge- if at all possible, homeowners need to contact not only their mortgage company, but any federal entities (local) that are paying attention to this issue for additional assistance. The initial attorney fee quoted to this homeowner was $4000. with $2000. up front- there is help available for those unable to afford this cost.

Foreclosure verbiage to be aware of:

Arrears: being overdue in an installment payment

Beneficiary: An individual entitled to receive assets or money from a trust or an estate. A lender is a beneficiary with a deed of trust or note as security for a loan.

Bid: An offer by an interested party requiring payment of a designated price for a property which is about to be sold at auction

Chattel: Personal property, such as household items

Closing costs: Expenses extraneous to the sale of real estate, which includes loan, title, appraisal, closing fees.

Deed in Lieu of Foreclosure: With lender approval, the owner deeds the property to the lender in order to avoid foreclosure. Lenders are inclined to avoid a “deed in lieu of” without clear title, and the owners offer an affidavit that provides that they are acting of their own volition.

Default: Failure of borrower to make payments in full or as stipulated by the lender.

Demand Letter: This is also referred to as a “letter of intent to foreclose”, or a “breach letter”.

Equity Right of Redemption: the right to avoid foreclosure by removing all encumbrances (interest, fees, debts outside of the current loan amount).

HUD1 statement: A form typically provided by the bank that includes the costs of purchasing the home.

Instrument: any written legal document.

Loss Mitigation Department: at banks, the department that assists homeowners in avoiding foreclosure.

Notice of Default: a notice sent by the bank to the borrowers with the purpose of curing the loan/late payment.

Notice of Rescission: a notice sent by the bank to the borrowers when the deficiency is “cured” and current.

Short sale: the sale of a property that is either below, or at market level that is LOWER than the loan balance.

IF YOU ARE FINDING YOURSELF IN THIS SITUATION, CALL US FOR ADDITIONAL RESOURCES:

Options Realty

621-727-2227

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This entry was posted on Tuesday, October 23rd, 2007 at 10:48 pm and is filed under Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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