Foreclosure Is Not The End Of Home Ownership

As you may already know, many people throughout the country are facing foreclosure. It's gotten so bad that some believe the government needs to step in and help. Others believe that irresponsible lending practices is the main cause of the problem and it's best to allow what's happening to run its course, rather than spend tax dollars on repairing what corporations screwed up.

I lean more towards the latter of the two options. This is mainly because in reality our government is broke. The national debt is well over 9 trillion dollars and increases by around 1.4 billion dollars each day. If the government interferes, it will only put the country deeper into debt and this will only make matters worse for all of us.

Don't get me wrong. I understand how painful it is to go through a financial crisis. I've been in foreclosure before. If the government stays out of the issue, what will most likely happen is that the bank owned properties will be auctioned off to the highest bidders who will then either lease the property or owner finance it.

That's right, owner financing... And what does this mean to you if you're in foreclosure? Don't count yourself out of the home ownership world just yet!

Many investors who buy rental property are also open to the idea of providing owner financing. This means they will act as the bank and your monthly payment will go towards paying for your home. It works exactly the same as if you were dealing with a major corporate bank. The difference is that your lender will be someone you've probably met.

This is a great way to rebuild your credit. Let the investor you're dealing with know that you want to make sure you get credit for making payments on time with the credit institutions (Equifax, Transunion, Experian.) After being current with your investor / lender for a few years there's a good chance you'll be able to qualify for a loan with better rates and terms through a larger lender and refinance.

Right now, the best thing to do if you're in foreclosure is to determine whether or not you can keep your home. If you cannot, do whatever it takes to avoid your property foreclosing. Just because you have decided to give your property back to the bank, it doesn't mean that you will have a foreclosure on your record.

Once you've resolved the issue with your bank, you may need to rent a while. Sign a short contract (no greater than six months.) Even though you may be in a pinch, there's a good chance that whoever you decide to rent from is in great need to find a tenant so use this to your advantage and negotiate the best possible short-term rental agreement. You can always reaffirm the contact for another 6 months if you do not find a buying situation by then.

Next, get busy working and saving money. You'll need the money for a down payment with whoever you decide to do an owner finance with. Keep you eye out for investors who offer owner finance options and let them know who you are. Stay in touch with them while you save and they will be on the lookout for good deals that will work for both of you.

When you're ready to buy again, before you sign on the dotted line make sure YOUR attorney reviews the closing documents. By law, the buyer is entitled to pick the closing attorney. Don't side step this advice or you will be sorry.

Tell your attorney to review the closing documents to make sure there's no b.s. going on. Better yet, have your attorney create the docs for you. An honest seller will not have a problem with this. There will probably be a few revisions and your goal at the end of the day is to have an agreement that everyone can be happy with.

Sign on the dotted line and you're a homeowner again : )

I hope this helps you see the silver lining of the foreclosure cloud!

If you're in foreclosure right now and need specific, step-by-step instructions to resolve your foreclosure go to:

http://www.theforeclosureassistant.net

There's a Foreclosure eGuide written by yours truly that will help you get through this with a lot less drama!

Michael Medley is the author of the Foreclosure eGuide.

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