Resource Author Francisco Rodriguez H.
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As the world simmers from the sub prime mortgage crisis, the question that is on every ones mind is, will the real estate market recover, and if not could the Government afford another round of mass foreclosures? Homeownership is predicated on employment, and as unemployment sky rocketed in the last year and continues to remain in the hundreds of thousands, how can Americans afford to keep something they can’t pay for?

I was surprised on several occasions when negotiating with second mortgage lenders. The negotiators did not know about the rules and the priorities of differed lien holders. Here is the most important rule: at the public sale the second mortgage is completely wiped out. They get nothing. The real estate market is experiencing the lowest point of the bell curve. Almost 80% of the houses in foreclosure are upside down, which means that the fair market value is lower than the amount owed on the first mortgage. There is nothing left over for the second and the following mortgages, if any.

All of the contracts involving a short sale are subject to the lender’s approval. The first mortgage allows the second mortgage to receive some funds, but usually no more than 10% of the balance on the loan. Here is how to proceed:

Why Are Foreclosures So Cheap?

It is in the nature of their pricing that a fallacy commonly occurs; foreclosed homes are dingy, run down houses. The truth, however, is different. The quality of these properties is usually outstanding, with a large portion of these houses being recently remodeled homes or condos. Home buyers are often bewildered as to why these great looking houses are sold at such low prices. It is nearly unbelievable and seems too good to be true, like a dream come true!

To get an answer to these queries let us learn about the procedure behind foreclosure. Foreclosure occurs when a homeowner cannot pay their mortgage. The bank which had issued the mortgage then becomes the owner of the property, and sells so that the remainder of the debt can be cleared. Hence when you buy such properties you actually relieve the bank of the burden. The bank does not aim at profit making, it is interested in getting back the amount it had given out as a loan and they want to do it quickly.

Armed with this information the question comes posed to you: What decisions should you do if you are facing foreclosure? If you are unemployed and have no prospects of getting rehired what are your options in keeping your home? The tax revenue that comes from your home is vital for the economy. Don’t let fears of foreclosure stop you from keeping your home and living the American Dream. You have options and now you have the government on your side