One of my jobs, as a Real Estate Broker for Key Masters Real Estate, is keeping everyone in the boat!  Sometimes it’s like battling the Angry Birds! It is often an uphill battle to keep Buyers from bailing out an swimming for the shoreline.  They usually calm down…. once the Buyer understands the Loan Officer is not picking on them.  He is actually working extremely hard…. rowing the boat for them.  

I guess the bottom line of the following article is…don’t shoot the messenger…or blast a hole in the boat!  Everything is more difficult now, but the rewards will come later when the Real Estate Market rebounds like Tim Tebow, rushing for the goal line, with 2 minutes left in the game!  You know you are going to take a couple of hits, but the headache will be worth it!  Please enjoy this article from Forbes, you can find a reference at the end of this blog.   

Securing mortgage approval and satisfying credit underwriting guidelines are not the difficulties plaguing mortgage consumers. It’s in meeting the rigorous documentation requirements that most people fall flat. The good news is, the fix is
simple. Just scan, photocopy, fax, and deliver every aspect of your financial life. Then, shortly before closing, check everything again.

Mortgage consumers who enter the mortgage approval process ready to battle their chosen mortgage lender will come out with a nightmare story to tell. As the process, requirements, and guidelines are the same for everybody, your mindset is the game-changer. Accepting the redundant documentation necessary for lender approval will make everyone’s life easier.

When I was a kid, my father occasionally issued directives that I naturally
thought were superfluous, and when asked why I needed to do whatever it
was he wanted me to do, his answer was often: “Because I said so.” This never
seemed to address my query but always left me without a retort, and I would
usually comply. This is exactly what consumers should do during the
mortgage approval process. When your lender requests what seems to be over
-documentation and you wonder why you need it, accept the simple edict –
“because I said so.” You will find the mortgage approval process much less
frustrating.

So, what’s the perfect loan? Well, it’s one that (a) pays back the lender and (b)
pays back the lender on time. Underwriting the perfect loan is not the goal
that mortgage lenders aspire to today.

The real goal is the perfect loan file.

Mortgage lenders have suffered staggering losses and gone out of business
because of the dreaded loan repurchase. As mortgage delinquencies
increased, FannieMae and FreddieMac began to audit mortgage loans they
had purchased and discovered substandard and fraudulent underwriting
practices that violated representations and warranties made, stating these
were high quality loans. Fannie and Freddie began forcing the originating
lenders of these “bad” loans to buy them back. So a small correspondent
mortgage lender is forced to buy back a single mortgage loan in the amount of
$250,000. This becomes a $250,000 loss to a small mortgage business for a
single loan, because it will never be repaid.

It doesn’t take many of these bad loan buybacks to close the doors on many
small mortgage operations. The lending houses suffered billions of dollars of
losses repurchasing loans from Fannie and Freddie, and began to do the same
thing for loans they had purchased from smaller originators.

The small and medium sized mortgage originators that survived created
underwriting guidelines and procedures to eliminate the threat of future loan
repurchase losses. The answer? The perfect loan file.

It’s no longer necessary to have excellent credit, a big down payment and
stable employment with income sufficient to support your debt service to
guarantee your loan approval. However, you must have a borrower profile
that meets the credit underwriting guidelines for the loan you are requesting.
And, more importantly, you have to be able to hard-copy-guideline-document
your profile.

Every nook and cranny of your financial life has to be corroborated, doubleand
triple-checked, and reviewed again before closing. This way, if the
originating lender has created a loan file that is exactly consistent with
published underwriting guidelines and has documented while adhering to
those guidelines, the chances are that your loan will not be subject to
repurchase.

Borrowers also need to prepare for processing and underwriting. Processors
and underwriters are the people trained and charged with gathering
(processors), all of your required-for-approval financial documents, and then
approving (underwriters), your loan. You can assume these people are well
trained and very experienced, as they are tasked with assembling and
approving a high-quality-these-people-will-pay-us-back loan file. But just
how do they go about that?

The process begins with the filter – the loan originator (a.k.a loan officer,
mortgage consultant, mortgage adviser, etc.) – tasked to match the
qualifications of a particular mortgage deal to the appropriate underwriting
guidelines. It is the filter’s job to determine if a loan scenario is approvable
and to gather the documentation to support that determination. It is here, at
the beginning of the approval process, where the deal is made or broken. The
rest of the approval process is just papering the file.
The filter determines whether the information provided by the borrower can
be validated and documented. This is simple, since most mortgages are
approved by automated underwriting engines such as Desktop Underwriter,
and the automated approval generates a list of the documents needed to
paper the loan file. An underwriter can, at this stage, request additional
supporting documentation evidence at their discretion, as not all
circumstances neatly fit into the prescribed underwriting box. If the filter
creates a loan file with accurate information, then secures the documentation
resulting from the automated underwriting findings, the loan will close
uneventfully.

So, let’s begin with the pre-approval call. Mortgage pre-approval is typically
accomplished with a telephone interview. A prospective borrower calls a
mortgage rep (filter), and the questions begin. There will be lots of questions
as this critical phase of the process is akin to the discovery period in a trial –
you’ll need to disclose everything. Expect to answer queries on what you do
for a living, how long you’ve been employed in your current field, and what
your salary is. If there is a co-borrower, they will have to answer the same
questions.

Every dollar in checking, savings, investments and retirement accounts, also
known as assets to close, as well as gifts from relatives and non-profit grants,
has to be accounted for. Essentially everything appearing on a borrower’s
asset-radar-screen has to be documented and explained.
If you were previously a homeowner and sold your home in a short sale, or if
you own a home now and plan to keep it as an investment or rental property,
there are new and specific underwriting guidelines created just for you. In
these cases, full disclosure of your credit and homeownership past can
potentially eliminate unforeseen mortgage approval woes. For instance,
FannieMae has a new underwriting guideline called “Buy-and-Bail,” for
current homeowners’ planning on keeping their existing home as an
investment/rental property. Properties not meeting the 30% equity test for
“Buy-and-Bail” result in additional asset requirements to purchase a new
home. Buyers with a short sale history may have to wait two to three years
before they are eligible for mortgage financing again. Full vetting of your
previous mortgage life will save you the dreaded we-have-a-problem call from
your mortgage lender.

It all comes down to your proof. If the lender asks for a specific document,
give them exactly what they are asking for, not what “should be OK,” –
because it won’t be. This is where the approval process tends to go off the
rails, when the lender asks for specific documentation and the borrower
supplies something else. Here, too, is where both sides get frustrated. So if the
lender asks for a bank statement and there are 5 pages for that bank
statement, send them all 5 pages, and not just the summary. If you send them
the summary page and they ask again, don’t complain that the lender keeps
asking for the same thing when you never sent it in the first place. This may
sound elementary, but the vast majority of mortgage approval process woes
stem from scenarios just like this.

The reason the mortgage approval process is now so rigorous is simple.
Avoiding defaults and loan buybacks has become the primary goal of
mortgage lenders. Higher standards are reducing loan defaults, which
should mean fewer foreclosures in the future. Government data shows that
less than 2% of loans originated in 2009, that were resold to Freddie Mac and
Fannie Mae went into default after 18 months, down from more than 22%
default rates for 2007 loans.

So when your lender requests specific documents from you, give it them just
“because they said so.”

You can thank my dad for that.

This article is available online at:
http://www.forbes.com/sites/moneybuilder/2012/03/09/the-perfect-loan-file-2/
The Perfect Loan File -
http://www.forbes.com/sites/moneybuilder/2012/03/09/the-perfect-loan-file-2/print/ 3/23/2012

ACN offers Independent Business Owners the opportunity grow their business to Infinity and Beyond.  The only limitation is what we place on ourselves.  The harder you work in ACN…the higher the rewards will be.   To check out the career opportunities with ACN, go to www.acnhomestore.acnrep.com.  For Products and Services go to www.acnhomestore.acndirect.com.

Foreclosure alternatives were developed by both lending institutions and the government to offset losses incurred by banks during the foreclosure process. The Mortgage Bankers Association reports losses in excess of $50,000 to banks on each foreclosed home, making the foreclosure alternatives listed in this section highly sensible for them to consider.

Foreclosure and foreclosure alternatives are completely separate processes. The homeowner must initiate the foreclosure alternative process. Alternatives such as loan modifications and short sales can take months to complete and are subject to the bank’s approval. In the meantime, the foreclosure process, if initiated by the bank, continues at the same time. Therefore, it is vital that the homeowner act quickly and correctly.

Foreclosure alternatives can prevent foreclosure only when they are initiated early in the foreclosure process, the bank decides to remove any foreclosure sale date, or when the alternative is approved and completed.

Hope for the Best, Prepare for the Worst

No foreclosure alternative is guaranteed. However, as long as homeowners are proactive their chances of preventing foreclosure and taking control of their financial future drastically increases. To find out what rights and options are available to you, go to our SSAA.Org website at www.ShortSaleKeyMasters.com.

http://acnhomestore.acnrep.com/v.asp?I=1B11406D5F0E&

Key Masters Real Estate is a Full Service Company with Metro Brokers that offers you the best Real Estate and Relocation Services available.  Servicing Buyers and Sellers in Highlands Ranch, Centennial, Denver, Englewood, Aurora, Parker, Castle Rock, Littleton….and all cities in the Denver Metro Area and Mountian Properties.  Tom Guest is the Broker Owner of Key Masters Real Estate.  They employ 5 agents, Cindy Dunn, Julie Reddington, Kathy Soltero, Christina Morris and Jesse Sardakowski.

“Visit Key Masters and I guarantee we hold the key to making your home search enjoyable and successful!”

Tom Guest

Key Masters Real Estate

Broker Owner

President Metro Brokers

303 718 1182

Who’s Buying and Where?

The landscape of the housing market has seen some changes following the economic fallout.

Premium content from Denver Business Journal – by Dennis Huspeni

Date: Friday, April 29, 2011, 4:00am MDT

Related:Commercial Real Estate, Residential Real Estate

Kathleen Lavine | Business Journal

Tom Guest, broker/owner at Key Masters Real Estate, is president of Metro Brokers for 2011. He says about 60-80 percent of the business recently has been in the foreclosure market.

You can’t talk about trends in the Denver residential real estate market without acknowledging the proverbial elephant in the room: foreclosures and short sales. But Realtors and analysts are seeing signs of life from other market segments, such as luxury homes.

“At least 60-80 percent of business now has been in the foreclosure market,” said Tom Guest, president of Metro Brokers, with 1,400 agents.

“If you’re a Realtor and not been in the foreclosure market, or some aspect of it, you’re struggling. But a lot of people are looking now. The majority are looking for a primary residence and the first-time homebuyer is back.”

That trend stems, in part, from falling apartment vacancies and rising rents, analysts said.

When rental rates start to equal a mortgage payment, more people start looking to buy. Couple that with still favorable mortgage rates, and a trend starts to emerge.

“People are buying for location and value now,” said Mike Rinner, executive vice president of The Genesis Group, an Englewood-based real estate market research and analysis firm. “When times are good and this is the place they’d like to live, value is not as important. … But in bad times, value and location are both important.”

“There’s been so much negative news, but there are a lot of positive things this year,” said Coldwell Banker’s Zac Nelson, who has worked the Denver market for almost 10 years. “One of them is the luxury market.”

Million-dollar homes start to move

Lon Welsh, founder and managing broker of Your Castle Real Estate, said statistics show the luxury market is heating up.

“The cheapest 10 percent of the market, under $85,000, clearly shows it’s a seller’s market,” Welsh said. “But on the high end, those over $460,000, it’s very much a buyer’s market.”

A statistic called “months of inventory” illustrates that fact. It’s how many months it would take the market to sell out, based on current sales figures and number of homes for sale.

While there are only 4.6 months of inventory for homes under $85,000, there are 9.1 for homes over $450,000.

In addition, the price of luxury homes has dropped as sellers become more realistic about what the market will bear, Nelson said.

“I’ve seen several price adjustments of hundreds of thousands of dollars; some even came down a million,” Nelson said. “Most hit a breaking point, and they’re tired of having their home on the market. They were living in a 2005 market. There’s only so much marketing a Realtor can do. In the end, it comes down to price.”

Nelson pointed to National Association of Realtors statistics for the Denver market that showed 2,849 homes from $500,000 to $1 million sold here in 2010, compared with 2,632 in 2009 — an 8 percent jump. For homes selling for more than $1 million, the growth was even more pronounced: 444 homes at a million-plus sold last year, up 13 percent from 388 in 2009.

“While the luxury market is recovering, we’re starting with a lower base,” Genesis’ Rinner said.

“The tax credit last year depleted small home inventory and ran up prices, while the high end was neglected,” Welsh said in one of the analysis reports Your Castle specializes in. “This year has a much more balanced inventory, and appreciation has been more balanced, too.”

The federal government’s $8,000 first-time homebuyer tax credit and $6,500 credit for existing homeowners expired April 30, 2010.

Where’s the action?

Denver’s core has hot spots regarding number of homes sold and on the market.

“I’m seeing a lot of movement in Washington Park and Capitol Hill,” Guest said. “Those older properties are drawing a lot of interest. People wanted to move in before, but they couldn’t afford it. Now the prices are coming down a little.”

Nelson said the general trend has been for people to buy closer to urban areas, while trying to hang on to suburbia.

“While it’s still around the core, the market still is and will continue to be neighborhoods that are walkable and bikeable, near the light rail and where the future light rail will be,” he said.

That’s why there’s so much activity in the area northeast of downtown, north of City Park.

Another factor for that area, Nelson said, is that a single-family home can be purchased for around $150,000 there, where the same home would cost $250,000 or more farther into suburbs such as Arvada, Highlands Ranch or Lone Tree.

Rinner noted he’s seen a lot of activity in areas that are “pushing the envelope in price.”

“They have nice, new, master plans where the builder has brought a lower price with value engineering,” he said.

Rinner mentioned such developments as Blackstone and Beacon Point, both in Aurora, and Whisper Creek and Taylor Morrison, both in Arvada.

“That’s a value play there,” he said of the Whisper Creek homes. “It’s tough to get into an Arvada home” for those prices.

Judging by statistics from the Colorado Housing and Finance Authority (CHFA), and experts’ anecdotal evidence, the metro area home buyer’s profile has changed since the end of the Great Recession.

While there’s been little change in the number of buyers ages 25 to 44, according to Jaime Gomez, CHFA’s chief operating officer, there are markedly fewer younger buyers and a lot more older buyers.

“There’s been a decrease in the number of 18- to 24-year-old buyers,” he said, noting that CHFA deals with first-time homebuyers in the affordable housing market for homes up to $350,000.

In 2008, 19 percent of CHFA’s loans went to buyers in that age group. By 2010, that number dwindled to 13 percent. Conversely, there were 17 percent of buyers above 44 in 2008, and that jumped to 22 percent in 2010.

CHFA, a state-created lender, works to provide financing to homebuyers, small and medium-sized businesses, and apartment developers.

Number of younger buyers declining

“We think there are a couple of reasons for that,” Gomez said. “Everyone knows the national job market is difficult, especially for people in that age group who are just out of high school or college trying to find a job. They might be staying in school longer or saving enough money to get into a home.”

Lenders also are looking for more credit history, especially since the lending rules have become more stringent after the Great Recession.

That also could explain the spike in the older demographic, whose members have more credit and a longer credit history, he said.

As far as resales, Nelson said there are more among those 30 to 40.

“You just see a younger push, with the buyers using technology and social media to do research and getting recommendations on where to buy,” Nelson said. “It may just be coincidental, because the prices coming down allowed more opportunity for buyers to qualify — along with lower interest rates.”

Gomez also provided a telling statistic about the increase in minority homeowners, which jumped from 23 percent in 2008 to 32 percent in 2010.

“That’s a pretty significant increase in the last two years,” he said.

Gomez attributed that to lenders previously targeting minorities with risky adjusted-rate-mortgage (ARM) loans.

Those have become scarcer since the recession, and those buyers are following the “flight to quality” and using more conventional, 30-year, fixed-rate loans that CHFA offers.

CHFA doesn’t offer ARM loans.

Metro Broker’s Guest said he’s seen more employers bringing in new hires.

During the recession, there were a lot of talented, unemployed workers and less reason to move people. That’s starting to change.

“There definitely is a re-emergence of the relocated buyer,” Guest said. “There was a lot of shopping in the fourth quarter, and the budgets for companies hit in the first and second quarter, so there’s been more activity.”

It is possible to purchase a home right after going through a Short Sale!

By far the easiest mortgage to obtain is a FHA loan:

1) 3.5 percent down payment, based on the purchase price of the home (e.g., $7,000 on a $200,000 home), or a gift of that same amount;

2) 3 percent to 6 percent of the purchase price, on top of the down payment, for closing costs, or a credit from the seller of the same amount; and

3) 640 FICO credit score — the middle score of those generated by the three credit bureaus (some banks will lend to borrowers with middle scores lower than 640, but will require more than the minimum down payment).

Lenders will want you to document income, asset and job history documentation, current paycheck stubs, two months’ bank statements and two years of W-2 forms or tax returns, and:

• a minimum of two years have passed since the discharge of a bankruptcy;
• a minimum of three years have passed since a foreclosure;
• anywhere from zero to three years have passed since a short sale, depending on the circumstances surrounding the short sale.

Contact Key Masters Real Estate to guild you in the right direction to purchase your next property.  We are experts in the purchase of Short Sale Properties, Bank Owned and Foreclosures.  We have lenders who can assist you in getting qualified for your next purchase.  Visit our website to search for Bank Owned and Foreclosure Properties at www.KeyMastersRealEstate.com .

and Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments and the lender files a public default notice. The foreclosure process can end one of four ways:

1. The borrower/owner pays off the default amount to reinstate the loan during a grace period known as pre-foreclosure.
2. The borrower/owner sells the property to a third party during pre-foreclosure, allowing the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.
3. A third party buys the property at a public auction at the end of the pre-foreclosure period.
4. The lender takes ownership of the property, usually with the intent to re-sell. The lender can take ownership through an agreement with the borrower/owner during pre-foreclosure or by buying back the property at the public auction.

1. Buying during pre-foreclosure (NOD, LIS)
2. Buying at public auction (NTS, NFS)
3. Buying bank-owned properties (REO, GOV)

Read our Foreclosure Overview for more detailed information about the foreclosure process, or go to our foreclosure state laws section.

5 Steps to Buying a Foreclosure

STEP 1. Find a Property

Buying a home in foreclosure can begin with you logging into RealtyTrac and decide where you want to search for property. RealtyTrac allows you to search by county, city or zip code. We recommend starting with a broader search (like county or city) and narrowing the search later if necessary.

Decide the status of foreclosure for which you want to search. You choose the status under Property Status on the Property Search page.

1. Select Pre-Foreclosure for Default Notices or Lis Pendens.
2. Select Auction for Trustee Sales or Sheriff’s Sales.
3. Select Bank Owned or Government Owned for REOs (repossessions).

See Step 4 in this guide for more about the different property statuses.

The Advanced Property Search allows you to enter other search criteria, such as price range and number of bedrooms and bathrooms. We recommend that you leave all those other criteria at “no minimum” to “no maximum” when you first search to get the best results. We also recommend you don’t change the Recording Date Range when you first search.

If you use the Advanced Search, leave the search Sort by “Entered On” and the Basic Property Type as “Residential,” unless you are specifically looking for Commercial property.

If you want to receive daily e-mail alerts of new properties posted on RealtyTrac that match your search criteria, follow these instructions.

On the Search Results page, you can sort your results by date, address, price or number of bedrooms or bathrooms. You can also view the results on a map by clicking the “View Map” button at the top of the search results. Click “Get Details” on any property to see the detailed information for that property. On the property details page, you can click the “Save Listing to My RealtyTrac” link to save the property to the My RealtyTrac page.

Property Details

The Property Details page should always include the address of the property and the name of the owner, trustee or lender involved with the foreclosure, depending on the property status. Also included should be an estimate of the unpaid loan balance, which will appear either as the Balance, Opening Bid or First Loan Amount.

The Estimated Property Market Values provided are based on comparable sales. Click on Comparable Sales to view a report that includes up to 15 recently sold neighborhood properties and an analysis of property values in that neighborhood.

The Trans Date and Trans Value represent the date and purchase amount the last time the property changed ownership.

The Balance or Opening Bid provides a good estimate of the amount owed on the loan in foreclosure. The Default Amount (usually only relevant for Pre-Foreclosure properties) is the amount the owner/borrower is behind on payments. Click on Lien & Loan History to view a report that lists additional debts encumbering the property.

The Recorded date is the date when the document with the foreclosure information was recorded with county records. The Entered On date is the date RealtyTrac entered the foreclosure information on the website. You can also click on most of the field names on the Property Details page for a definition.

Some fields of information are missing simply because the field is not relevant to the status of foreclosure. For instance, you will never see a sale date on Pre-Foreclosure properties because the auction date has not been scheduled yet. When the sale date is set, the property will appear with Auction status.

Some fields of information are missing because they were not available from the recorded document that has the foreclosure information. This usually applies to property details such as photo, year built, bedrooms and bathrooms and square footage. RealtyTrac continues to search other data sources to find as much of this information as possible on each property.

STEP 2. Get Financing

Obtaining financing not only gives you an estimate of what you can afford, it also enables you to move quickly once you locate a property that interests you. When you approach a borrower/owner or a foreclosing lender about a property, secured financing will demonstrate that you are a serious buyer and are ready to buy quickly.

You can apply for financing with RealtyTrac’s financing partner. The application is free. Subscribers can click on the Get Financing tab on any member page after you log in or click on financing links on the Search Results or Property Details pages. You will be able to apply online or by phone.

STEP 3. Contact an Agent

If you’re a first-time homebuyer and you’ve never purchased a home, let alone a foreclosure property, it is beneficial to contact a local real estate agent who can guide you through the process of buying a foreclosure. If you work with an agent, make sure they know your priorities. Ask any potential agents if they have experience with foreclosures. Especially for first-time buyers, a good agent can be a comforting and helpful resource.

You can contact an agent using the RealtyTrac Agent Network. There is no cost to contact an agent, although you should ask the agent how much he or she charges for commission. Subscribers can click on the Contact An Agent tab on any member page after you log in or click on any corresponding links on the Search Results or Property Details pages.

STEP 4. Contact Owner

Depending on the property status, the seller will be the owner in default, the trustee or the foreclosing lender. To determine the property status on RealtyTrac, look at the Foreclosure Status gauge on the Property Details page.

Buying a property in pre-foreclosure involves approaching the borrower/owner and offering to buy the property. The borrower/owner can walk away with something to show for any equity in the property and avoid a bad mark on his or her credit history. The buyer has time to research the title and condition of the property and can realize discounts of 20 percent to 40 percent below market value.

If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction. Buyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner.

If the lender or government agency takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender usually sells the property to recover the unpaid loan amount. The lender typically clears the title for any buyer, but the potential bargain is often less than a pre-foreclosure or auction property.

Contact Owner: Pre-Foreclosure

When a property is in pre-foreclosure (NOD, LIS), the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. The pre-foreclosure period can last several months, so you may need to be patient when trying to contact the owner in default.

The first step is to call the trustee or attorney listed on the Property Details page to confirm if the property is still in foreclosure. The trustee or attorney has the most up-to-date information if the owner has sold or reinstated the property. The trustee or attorney cannot answer other questions about the property.

If you haven’t done it already, you’ll want to evaluate the property’s value and check for any additional loans or liens encumbering the property so that you can make an informed decision about whether the property is a wise investment. On the Property Details page, click on the Comparable Sales section to view a report that evaluates the home’s market value based on comparable sales in the neighborhood. Click on the Loan & Lien History section to view a report that lists additional encumbrances on the property.

If the trustee confirms the property is still in foreclosure, and you believe the property could be a wise investment, you should contact the owner in default as soon as possible. The quickest way to make contact with the owner using RealtyTrac is to click on the “Contact Owner” link on any Property Details page to send a postcard to the owner. You can print a postcard and mail it yourself or have RealtyTrac mail a postcard for you. You can choose pre-written wording for the postcard or type your own wording. If you save a property to My RealtyTrac, you will be able to view a record of when you sent a postcard for the property.

If the owner does not respond to a postcard you can try to send another postcard (the owner may have a change of heart as the end of the pre-foreclosure period approaches) or you can wait to see if the property is scheduled for auction and attend the auction.

One option is to call the owner if you can track down the phone number. Another option is to go to the property and try to contact the owner in person, as long as you recognize the ownership rights of the owner. We don’t recommend either of these options if you don’t have previous experience.

Contact Trustee: Auctions

Before the auction, you may have a chance to work out a last-minute deal with the owner in default. Usually a property is scheduled for auction just a few weeks before the auction occurs, so you may have to move quickly if you want to contact the owner.

Auctions can be postponed or canceled anytime, so no matter what the auction date listed on RealtyTrac (even if it’s in the past), it’s always a good idea to contact the trustee or attorney to confirm. We recommend you call when you first locate the property and the day before the property is scheduled for auction. The trustee/attorney has the most up-to-date information if the auction has been canceled or postponed. The trustee/attorney cannot answer other questions about the property.

Some auction properties on RealtyTrac allow you to bid online for the property. If this is the case, you’ll see a “Bid Now” button on the search results page and “Bid Now” links on the property details page. Just click on any of those to be taken to a bidding page where you can see more details about the bidding and submit a bid if you wish.

If you haven’t done it already, you’ll want to evaluate the property’s value and check for any additional loans or liens encumbering the property so that you can make an informed decision about whether the property is a wise investment. On the Property Details page, click on the Comparable Sales section to view a report that evaluates the home’s market value based on comparable sales in the neighborhood. Click on the Loan & Lien History section to view a report that lists additional encumbrances on the property.

If you believe the property could be a wise investment, you can attend the auction to bid on the property. RealtyTrac usually has the auction date, time, location and opening bid. If any of this information is missing, you can often get it from the trustee or attorney. If you’ve never bought at auction before, we recommend you attend several auctions just to observe before you attend an auction to bid.

View our State Foreclosure Laws Overview for more details.

Contact Owner: Bank Owned

If the property is Bank Owned (REO), your first step is to contact the lender, whose information is usually on RealtyTrac’s Property Details page. You should contact the lender directly and ask for their REO or asset management department to find out how you can view and possibly make an offer on the property. REO means “Real Estate Owned” by the lender. It’s another way to say the property has gone through the foreclosure process and has now been repossessed by the foreclosing lender.

If you haven’t done it already, you’ll want to evaluate the property’s value and check for any additional loans or liens encumbering the property so that you can make an informed decision about whether the property is a wise investment. On the Property Details page, click on the Comparable Sales section to view a report that evaluates the home’s market value based on comparable sales in the neighborhood. Click on the Loan & Lien History section to view a report that lists additional encumbrances on the property.

Some bank-owned properties on RealtyTrac will give you the option to contact the property’s listing agent directly. You’ll see a link to do this either at the top of the property details page or in the Contact section of the property details page.

RealtyTrac usually has the name of the lender/bank listed on the property, but if you have trouble finding a phone number or address for them through the Internet or otherwise, below are suggestions for tracking down the lender.

1. Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you contact the lender and who can check if the property is already listed on the market with a real estate agent.

2. Use the History of Notices tool to check if RealtyTrac has any further information on that property. To use this feature, click on the “History of Notices” link on the Property Details page (under property photo). This feature will give you a list of records RealtyTrac has for the property. Other records may have more information, such as the lender name, address and phone number that was missing on the original property record.

3. You can use RealtyTrac’s Xamine tool to check if the property is listed with a real estate agent. RealtyTrac’s Xamine tool can be accessed by clicking “What’s Next>Evaluate The Property” on any Property Details page. On the Xamine worksheet, select the MLS tab and click “Search” at the bottom of the page. If the property is not listed with an agent, then you will need to contact the lender directly.

4. You can contact the local property assessor to find out the owner’s name and mailing address. Since the property is bank owned, the property assessor should have the bank or lender listed as the owner. Go to statelocalgov.net to find the local property assessor in your area.

Contact Owner: Government Owned

Many government-owned properties are already listed with a real estate agent, and you should see a link to contact that agent in the Contact section of the property details page. If the listing agent’s information is not available, you can contact a local agent using RealtyTrac’s Agent Network (click on the “Contact an Agent” tab at the top of any member page on the website). Or you can try to contact the government agency listed directly.

STEP 5. Make an Offer

If you have never purchased a foreclosure property before, we recommend that you have a real estate agent help you prepare and make an offer. Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network.

To get an estimate of the potential bargain for any property, you need to find out the estimated market value of the property, how much is owed on the property and if the owner has any other loans or liens encumbering the property. On the Property Details page, RealtyTrac usually provides the estimated market value and the estimated balance of the loan in foreclosure, called either the Balance, Opening Bid or First Loan Amount.

Click on the Check Loan & Lien History section to view a report that lists additional loans or liens on the property. Click on “Check Comparable Sales” to view up to 15 recently sold neighborhood properties and an analysis of property values in that neighborhood.

Add together any outstanding loans and liens and estimated repair costs and subtract that total from the estimated market value of the property. You can plug the numbers into RealtyTrac’s Xamine tool and it will calculate the potential bargain for you. RealtyTrac’s Xamine tool can be accessed by clicking “What’s Next>Evaluate Property” on any Property Details page.

Based on your research of the potential bargain, you can make an offer. Usually the offer amount is somewhere below the market value but above the total outstanding liens and estimated repair costs. If the property is a pre-foreclosure or bank owned, you could prepare an offer similar to a typical purchase offer, contingent on a full inspection and title search.

If the property is selling at auction, you will need to make your offer, or bid, at the auction. In many states, bidders are required to pay in cash in the form of a cashier’s check at the auction. You probably won’t be able to conduct a full inspection and title search when you buy at an auction, so it’s important to do careful research before attending an auction.

In conclusion, the foreclosure process is involved but can be very rewarding.  Contact Key Masters Real Estate for additional information at Info@KeyMastersRealEstate.com.

You would think by the barrage of negative news reports that just about every other home was going into foreclosure. Certainly this is not the case. In fact, the housing market has stabilized in the past six months. The latest report from the Mortgage Bankers Association shows that the percentage of homeowners that were behind at least one monthly payment fell from 9.1% in the third quarter to 8.2% in the fourth quarter. Also, the 2010 delinquency rate fell from over 10% in the beginning of the year to 8.2% at the end of the year.

The 2% drop in mortgage delinquencies follows the recent drop in the Unemployment Rate and the steady increase in Existing Home Sales and Consumer Confidence. These are significant signs that the housing market is closing in on a true market equilibrium.

What does it mean for investors…inventory levels for Bank Owned homes will be decreasing and as prices rise we may see less Short Sales. There are plenty of opportunities in this market and it gets even better as prices are moving up. Don’t be left behind… When you are getting less than 1.0 percent return on that CD sitting in the Bank…. Real Estate will return to be one of the best investments now that the market has corrected.

The 2% drop in mortgage delinquencies follows the recent drop in the Unemployment Rate and the steady increase in Existing Home Sales and Consumer Confidence. These are significant signs that the housing market is closing in on a true market equilibrium.

What does it mean for investors…inventory levels for Bank Owned homes will be decreasing and as prices rise we may see less Short Sales. There are plenty of opportunities in this market and it gets even better as prices are moving up. Don’t be left behind… When you are getting less than 1.0 percent return on that CD sitting in the Bank…. Real Estate will return to be one of the best investments now that the market has corrected.