| Possibly the most overlooked way to stop | | | | However, despite the fact that the market is |
| foreclosure is for a friend or family member to | | | | currently favoring buyers due to the lowering of |
| purchase the property that is being foreclosed | | | | prices, this is also a difficult time for home buyers |
| and allow the original homeowners to remain living | | | | who need to borrow money to finance their |
| there, and this is a much better option than the | | | | purchase. Many lenders have gone out of business |
| tried-and-true "beg, borrow, or steal" alternative. | | | | now, while others are following more strict lending |
| In essence, this can follow the same process as | | | | guidelines and loaning far less than even six |
| using a private investor to save the home, but it | | | | months ago. Qualifying for a mortgage with no |
| is usually easier for foreclosure victims to trust | | | | money down and less than excellent credit is |
| their friends or family before they trust a real | | | | simply no longer an option. If the foreclosure |
| estate investor. Especially with the possibility of | | | | victims and friend or family member have a |
| running into a foreclosure scam, using someone | | | | savings fund or can liquidate other assets to save |
| well-known presents a more secure option. There | | | | the house from foreclosure, though, they will |
| are a number of considerations before attempting | | | | have a significantly better chance of getting a loan |
| this method of stopping the foreclosure process, | | | | with a competitive interest rate. |
| all of which homeowners and potential buyers | | | | If this option is open for homeowners facing |
| need to be aware of. | | | | foreclosure, and they are able to find a |
| The first problem that any buyer will have to | | | | compassionate family member or friend who can |
| confront is if the family member that is | | | | help them stop foreclosure, it is wise for all |
| purchasing the house out of foreclosure has the | | | | parties involved to put together an insurance plan |
| same last name as the foreclosure victims | | | | to prevent foreclosure from happening again. Just |
| themselves. Lenders will often refuse to make a | | | | a few lessons that homeowners can take include |
| loan in this situation, as it is not a third-party, | | | | saving up an emergency fund to pay the |
| arms-length transaction. The parties are related | | | | mortgage in the event of a financial hardship, not |
| and there is a pending foreclosure, so the | | | | refinancing the property every few years and |
| purchase resembles a family bailout that is | | | | treating the house as an ATM, and considering the |
| attempting to use a new mortgage to take care | | | | house as a place to live rather than another bank |
| of a family member, rather than a buyer and | | | | account. In the event of a future financial crisis, it |
| seller getting together to complete a real estate | | | | is also vitally important to contact the mortgage |
| transaction. Mortgage companies would like to | | | | company as soon as the problem begins and |
| avoid getting into the middle of homeowners' | | | | inform them of any late payments. Also |
| intra-family affairs, especially if there is a recent | | | | important is gaining as much knowledge and |
| history of financial problems. So foreclosure | | | | foreclosure advice as possible from the current |
| victims will have to locate a family member who | | | | situation, so that it will be much easier to respond |
| has a different last name or use a friend, if they | | | | quickly if problems come up again. |
| wish to pursue this method of avoiding | | | | There are a number of important benefits that |
| foreclosure. | | | | using a friend or family member as a real estate |
| Secondly, if the friend of family member does not | | | | investor can give the foreclosure victims. These |
| have a down payment or excellent credit, it will | | | | include the possibility of keeping the house, finding |
| be very difficult to qualify for the loan to | | | | a trusted source to help out in a financial hardship, |
| purchase the house out of foreclosure. Currently, | | | | and not having to pay real estate commissions. |
| the real estate market provides some great | | | | The problems that homeowners have in this |
| deals, because all of the foreclosures have | | | | situation, such as finding someone with a different |
| depressed home values in certain areas. This | | | | last name to help out, and getting the home |
| makes many homes much less expensive. In fact, | | | | buyer qualified for the new mortgage, may be |
| some areas of the country are experiencing | | | | difficult to overcome, but the rewards are being |
| decreases of over 50% year-to-year, while | | | | able to stop foreclosure through a secure solution |
| values are stagnant or slightly declining across the | | | | with fewer worries of being taken advantage of. |
| board. The foreclosure victims may find that they | | | | Homeowners in foreclosure need as many options |
| owe much more than their home is currently | | | | as possible to keep their homes, and this can |
| worth, and the possibility for a short sale may | | | | provide one of the most mutually beneficial |
| present itself, if the lender is willing to work out a | | | | solutions, and is in keeping with the local solutions |
| solution. | | | | we have recommended in previous articles. |