They Foreclosed on The House I'm Living In - Now What?

Every state is different when it comes to foreclosures. And in times like these, things have changed.

Even here in Las Vegas, it used to be if they foreclosed on your house, the sheriff showed with someone from the bank up a day to two later to evict you, lock you out and then make arrangements for you to come back and get your stuff. But these are troubled times, and there are large numbers of homes being foreclosed on every day.

Currently, at least in Las Vegas, if your house is not purchased at auction by an investor or new owner occupant, the bank will assign your property to an asset manager. This could be a real estate agent or an asset management company who takes care of the property until the bank is ready to list the house. The asset manager or agent will come by and do an occupancy check to see who's living in the house.

If its a rental tenant, they have different rights than the previous owner. If you're a tenant with a lease, the bank has to, by law, give you at least 90 days to make arrangements to move. They may offer you cash to move sooner, or if you have a lease that doesn't expire for a longer period of time, they are supposed to honor the terms of your lease. This doesn't mean you don't have to continue to pay rent, it just means you'll pay it to the asset management company or whoever the bank chooses while you make plans to move. Another alternative is to go get prequalified and buy the house you're living in.

If you are the previous owner, the process is a little different. After they do the occupancy check and discover you are still living in the house, they will probably still offer you a cash for keys offer, giving you 30 days to move and also offering you up to $1500 to move and leave the property in good condition. But make no mistake, you have to move out. You have no rights, and the bank is just trying to protect their interest by offering you cash so you won't trash and strip the property when you move. They could call the sheriff and have you evicted if they wanted to.

Once the title went back to the bank (and it usually only takes 1 day to record back into the banks name), you're tresspassing and subject to immediate eviction.

Another scenario is when an investor buys the house. They may actually come and try to make a deal with you, offering to rent the property to you for a couple of years, and possibly sell it back to you on a lease option. Depending on your current financial situation, this may or may not be a good option for you. Rent may be less than what your house payment was, and you don't have to move. They will probably want an option payment, but you haven't paid a mortgage payment for 6 or 7 months so hopefully you now have a little cash set aside.

Lastly, a new owner occupant may have bought the property at the auction. This is now beginnning to occur more frequently. They have the right to evict you. They too may offer you a small financial incentive to move or they may show up with the sheriff. Its their call. Remember, once the property sold to someone else, you're trespassing.

Foreclosure is a difficult situation and no fun for anyone. This process as I described may or may not work in other states or even cities across the country. Take the time to find out how it works where you live. Talk to a couple of agents who specialize in foreclosures in your town.

Please don't put your head in the sand. No one wants the sheriff to show up and tell them they have to get out NOW!If you're behind on your mortgage, or you think you're going to be, call a professional and find out what your options are. The sooner you do, the more options you have. They may include a loan modification, forensic audit, deed in lieu, short sale or foreclosure. Some processes are just bandaids, some are real solutions depending on your situation.

There is lots of help out there, and a lot of it is free.

Heather Peck

Rosen & Company West

702-595-7380

LasVegasExpert@yahoo.com

http://www.heathersellsvegas.com/

In today's economy, lenders are just plain nervous. They are taking longer and longer to approve loans, running the buyer through every ringer they can find, sifting through their background like their all out do defraud the government, and making sure that they know absolutely everything they can about the borrower.

I've been working with a buyer who had some credit challenges. There was some old debt to pay off, debt-to-income ratios to lower, and scores to improve -- just a little bit. Then, a dark ghost came out of the closet. A tax return filed two years ago contained what the underwriter thought were irregularities so they called the IRS to verify what the borrower had put on their mortgage application. I think the most shocking thing is that they actually called the IRS.

Gone are the days of you just have to breathe to get a loan. Questionable loan officers were doctoring bank statements and pay stubs. Potential borrowers were lying about their income. Now they actually - VERIFY what you put in your application. Even if the loan officer doesn't verify it, if the underwriter has the slightest inkling that something isn't right, they're going to call whoever they have to in order to see if you're telling the truth.

So before you go choose just any loan officer to prequalify you, understand that your financial background is subject to a great deal of scrutiny. You'll need to be prepared to provide proof of where you get your money, explain why you may have extra cash in your account, and that everything on your tax returns is legitimate. If you're recently divorced, how your debt was split up can affect your ratios which may affect how much house you can buy.

Everyone wants you to succeed. The real estate agent wants to sell you a house. The loan officer wants to get you a loan, and the title company wants to close the file. But the underwriter, that person who evaluates your loan and decides if you're who you say you are and your financials are what you represent, that's the one who can make or break your deal. So make sure you've taken care of any ghosts in your closet before you go shopping for a house.

You'll be glad you did.

Heather Peck

Rosen & Company West

702-595-7380

LasVegasExpert@yahoo.com

http://www.heathersellsvegas.com/