Home Foreclosure - Deal with It Before It Deals with You
June 6th, 2009
Recently a friend shocked us with the news that her home was in foreclosure. The reality of her situation hit home – literally - when she was served papers from the local sheriff’s department notifying her that her house was to be auctioned next month as part of a sheriff’s sale. She called us in a state of panic, asking what she should do.
After she explained what had happened, it was clear that fear had gotten the best of her as the late notices began to pile up. She never called the bank when she missed payments to see if she could work out some arrangement to get caught up. Lenders can offer potential alternatives in these situations but you must ask questions to get information from them. She never thought to ask her lender about a short sale or find out if she had enough equity in her home to sell it outright. In a nutshell, she was too afraid and too ashamed to do anything for almost a year.
Now she’s worried about not only losing her home, but the impact a foreclosure will have on her ability to buy a home again in the future. Carol Adams with Essential Mortgage offers this advice. “If applying for a conventional home loan, a foreclosure must be at least 5 years old and [for] FHA loans, it must be at least 3 years old. Very often when [foreclosure] happens, a person wants to pay cash and not become indebted [again]. Your credit score will not improve, however, unless you reestablish credit.” You also need to make sure this new credit is paid timely.
We’re hoping our friend can find a path through this mess and re-establish her family in a new home someday. But if you find yourself in this situation, don’t put your head in the sand when you fall behind on your mortgage payments. Take action now because if you don’t deal with it, you’ll lose your home and potentially even more.
As always, if you have any questions call me at 985-707-5035 or email me pbennett@latterblum.com. If you’re moving anywhere in the country, I can get you there!
Posted by:
Patricia Bennett
Share With a FriendMore Free Money!
June 4th, 2009
There is a lot of confusion about the $8000 real estate tax credit. It is actually called the American Recovery and Reinvestment Act of 2009, it is part of the economic stimulus package to help revive the housing market which means for you, more free money!
First, you have to be a first time homebuyer. This is broader than you would think—it means that you can’t have owned a primary residence for the last three years. So investment property you might own doesn’t count and if you have a flooded/gutted house from Katrina it doesn’t count. But if you own a house and you have lived in it anytime in the last three years—it counts and no tax credit for you. There are some income limitations so check out this web site to find out more.
Secondly, you have to buy the house between January 1, 2009 and November 30, 2009. If this is a program you are interested in then get cracking because you have to go to Act of Sale by November 30, 2009. But you don’t have to wait until next year to get this money, you can file an amended return for 2008 and get the money this year even though you bought the house in 2009.
Thirdly, you MIGHT be able to get this money up front and use it to help with closing costs. The federal government has approved this bridge loan program, but it is not currently available in Louisiana. The bridge loan would have to come from a non-profit or state housing finance authority like the Louisiana Housing Finance Authority (LHFA) but they decided not to participate.
Lastly, it’s an $8000 credit whether you are single or married. Some mistakenly have thought that a single person would only get half of the tax credit amount but it is $8000 per property.
If you are still confused or if you just need help finding a house so you can take advantage of this tax credit and get some free money by calling call Kelli Wright at 504-613-7902.
Posted by:
Kelli Wright