localmentor asked:

www.localmentor.com host Michael Jake shows how a wholesale house flip happens. A walk through of a typical REO, Bank Owned House, Estate House, tired rental property, and how the deal was Found, How it was Funded, and how the profit was made and how much! Learn more Colorado Creative Real Estate Investing Techniques at www.localmentor.com

The following are legal defenses to foreclosure to beat the bank:

1. Truth in Lending Act (TILA) violations enabling rescission. If your loan is a refinance, the bank must have provided you a set of disclosures at the time of closing.  If these disclosures are inaccurate, the loan is statutorily rescindable under TILA.  For example, in a foreclosure action, the finance charge must have been accurate within $35 or the loan may be rescindable.  This means the loan is cancelled and all money paid to the lender is refunded.

2. Truth in Lending Act (TILA) violations enabling damages. If you purchased the property  with the loan or used the proceeds to refinance and proper disclosures were not given, then you may be entitled to money damages to offset the foreclosure.

3.       Home Ownership and Equity Protection Act (HOEPA). This is a very powerful federal law governing high cost refinance loans.  If your loan is under $150,000 or the initial rate was above 8%, you should evaluate your loan for violations of this act.  Violations here enable rescission and substantial money damages that can be in excess of the loan’s dollar amount.

4. Failure to Provide a Correct Notice of the Right to Rescind. There is a specific notice that must be provided to refinance customers at closing.  If this form is inaccurate or incorrect, the loan is rescindable up to three years after the closing date.

5. Breach of Contract. Many times the lender will do things that are unfair or unjustified before starting the foreclosure process.  Just as you have an obligation to pay the mortgage, the lender has a responsibility not to interfere with your ability to do so – like force placing insurance making the payments substantially more expensive than they should have been.

6. Real Estate Settlement Procedures Act. This federal law governs many types of disclosures that lenders must provide at the time of closing, in addition to prohibiting things like kickbacks and unearned fees.  It enables damages, and sometimes rescission if the error triggers TILA.

7. Fair Debt Collection Practices Act. This federal law requires servicers or lenders who obtain the mortgage after default follow specific protocol in attempting to collect on the debt.  A failure to follow this law enables statutory damages and attorney’s fees.

8. Fair Credit Reporting Act. This federal law governs lenders ability to report information about the mortgage and requires the accurate reporting of negative information.  Violations of this act also enables damages and attorney’s fees.  Punitive damages might be available under this act.

9. Real party in interest. This is a procedural defense to foreclosure that can be extremely effective at stopping the lender’s ability to foreclose.  It essentially questions the ownership of the mortgage and questions whether the foreclosing party is, in fact, the holder of the mortgage and note.

10. Unconscionability. This defense is focused on the events surrounding the creation and closing of the mortgage loan.  A violation here gives the court great leeway in deciding whether the mortgage should be voided or changed.

11. Failure to state a claim upon which relief can be granted. This general defense attacks the lender’s ability to foreclose and is can be used in conjunction with one of the other foreclosure defenses.

12. Failure to establish conditions precedent. Want to get a foreclosure action thrown out of court right away?  Use this defense that attacks the lender’s pre-foreclosure processes.

13. Failure to comply with FHA pre-foreclosure requirements. FHA requires every lender to mail a booklet called “How to Avoid Foreclosure” and set up a face-to-face meeting with the borrower before foreclosing (in most cases).  If the lender does not take these steps, then it cannot foreclose.

By: Foreclosure Fight

About the Author:

Whether you are a seasoned investor or just a beginner, likely you have heard of the acquisition strategy of “Subject To.” I am here to tell you that this needs to be a key tool in your investment tool belt! My favorite variation of this technique is purchasing “Subject To” and selling on a “Lease Option.” Wow, if you want to clear a room, just start throwing those two word combos around! Non-investors and some investors alike are puzzled by this terminology. OK, so what is a “Subject To,” you ask? Well let me tell you: It is one of the most profitable forms of acquiring investment property with little or no money out of your pocket. Do I have your attention? Yes, I said potentially NO MONEY DOWN! Do you know anyone that would turn down a profitable deal with little or no money out of pocket?? If you are one of these scant few, please call me when you are presented with this opportunity and decide to “pass!” But for the wise investor, this method allows you to become the owner of record and leave the mortgage in the seller’s name! Here is the concept: First you find a motivated seller (or better yet, they find you!). Most of the time, these sellers are going to have little or even no equity in their properties. This may be true or simply their impression of value. One of the most important questions you can ask is “What is your payoff?” Follow this up by asking, “Would you sell it for that amount?” If you don’t ask, you won’t know. This will save you a lot of time (and money!). Once you have determined your seller is motivated enough to proceed, you explain that you can purchase their home by leaving the existing financing in place. You can obtain ownership, while the loan stays in the sellers’ name. Think of all the possibilities this affords you as an investor:

• To start with, you eliminate the majority of fees and closing costs associated with new mortgages.

• Since there is not a new lender, there are no additional finance charges! Think of the extra money you can pocket.

• Next, there is no qualifying for this type of financing.

• Think of the tax advantages (ask your CPA).

• It does not affect your credit standing, your debt ratio, or even require you to have an income! This presents a tremendous amount of opportunity.

• You can purchase with this method, and hold for long term (rental), you can flip the property to another investor or retail buyer, or use it as a construction loan short term while doing repairs and then refinance or resell.

All in all I think you get the idea that the possibilities are limitless! What more could you ask for than unlimited funding for your deals and no bank restrictions or guidelines. Invite everyone you know, that has a remote interest in investing, to our October GAREIA Augusta Chapter meeting, as we will be discussing this technique and other topics in further detail. I will show you how to build $30,000-$40,000 net profit or even more into each deal with little or no money out of pocket!

Mark G. Estates asked:

A lot of people these days are preaching about the buying and holding method of gaining wealth with real estate. There indeed may come a time in your life or business when you’ll want to hang on to a piece of property, although you’ll only be interested in keeping certain types of property. If you’re just starting out, flipping a house may be an ideal way to get started.

Basically, there are three ways that you can flip a house, although each one has its own terms, motivation, and type of property. The first method is known as retailing. What this means, is that you buy a house in bad shape, do the repairs to fix it up, then turn around and sell it. There are a variety of houses in need of repairs out there, and several ways that you can quickly flip a house to net profit. All you need to know are the techniques that will get you the most money in the least amount of time.

The second way you can flip a house is though wholesaling. Wholesaling involves finding a home for sale then flipping it to an investor for a fast, yet small profit. To do this, you’ll need to know the real estate investors in your area, the types of homes that flip the best, and how to fund your property so you can flip it to them. If you live in a big area or a city, you’ll find that using the wholesaling method of flipping houses is actually easier to accomplish.

The third way to flip a house is by assigning the purchase. Using this method, you’ll commit to buy the house. Instead of closing the deal yourself, you’ll assign it to a real estate investor – of course for a small fee. The investor will take the contract over and close the purchase themselves – flipping the house. This can be very profitable, especially if you invest in the right home. You don’t need to have your contract worded any special way to be legal, although you will need to determine the assignment fee.

If you’re looking to break into the real estate market and make big bucks, you’ll need to learn all about flipping houses. Flipping houses is very profitable, especially once you have learned the basics. The first and third methods are the best, although they will both take quite a bit of work on your part. Restoring homes isn’t easy, and you’ll need to have a team qualified to handle any repairs. Assigning the purchase may be difficult when you first start out, although it will get easier with time. If you stay at it and do your best to make a profit – you’ll be an expert at flipping homes in no time at all.

Kari Hoopes asked:

Buying a home can be a satisfying or frustrating experience depending how financially ready you are to own a home. Just the process of buying a home can be very expensive with the major expense of purchasing a home being the down payment. The purpose of a down payment is to pay the bank fees to get the mortgage setup and generate some equity in the home to hedge the risk the bank is taking. In years past, this down payment could be very small, but with the fall of the housing market in 2006, those days are long gone, making it prohibitively expensive to buy a home. When there are fewer buyers and less credit around, sellers begin to offer other ways to sell their home. The “Lease Option” is one such method. A Lease Option is technically a lease (rental) with the option to purchase. You are renting the home but have the right to purchase the home at anytime during the rental period at a pre-determined price.

A lease option can be a very favorable way to purchase a home because it provides the advantages of home ownership without the disadvantages of ownership. The main advantages include: (1) No mortgage fees (2) less for a down payment (3) limited risk if the value of the home falls but you profit as the home appreciates. When structured property, there really are no disadvantages to a lease option relative to purchasing the home with a mortgage. When compared with renting, the major disadvantages of a lease option include: (1) pay more money upfront than renting (2) you are responsible for repairs, not the landlord. Each advantage and disadvantage is discussed in greater detail below.

1. Advantage: No mortgage fees. Because a lease option is technically a rental, the agreement is between you and the seller. Because the bank is not involved, there are no bank fees, meaning that you don’t have to come up with the $5000 to $9000 that it costs to get a mortgage. However, eventually you will have to get a mortgage if you decide to stay in the home long term.

2. Advantage: Less for a down payment. Like the mortgage fees, because the agreement is between you and the seller, the money down is negotiable, and sometimes not required at all, though the amount down typically ranges between $5000 and $10000 dollars. This is still better than the bank will require.

3. Advantage: Limited risk and leveraged returns. A lease option is an option to purchase, not an obligation to purchase. This means that when the lease term expires, if the home has lost value, you can choose to walk away. You give up your down payment, but are not saddled with a home that cannot be sold. However, at the same time, if the home increases in value, because the purchase price is set, you can purchase the home for less than it is worth on the open market. This key element makes lease option homes potentially a great investment, because you can leverage your money with such little risk. For example. If you purchase a $300,000 home with a mortgage, you would need to bring about $20,000 at closing ($15,000 as a 5% down payment and $5000 to cover mortgage fees). If the home’s value increased 5% over two years, the home would be worth $315,000. Your $20,000 turned into $30,000 ($15,000 in equity to start + $15,000 in appreciation); a 50% return on your money over 2 years. However, if the home decreased 5% in value, the home would be worth $285,000, and your $20,000 investment turned into $0.00. However, if the same home was bought as a lease option, then $5000 down would turn into $20,000 ($5000 in equity to start + $15,000 in appreciation); a 400% return on your money over 2 years. If the home decreased 5% in value, the home would be worth $285,000 but you can walk away having only paid the upfront down payment of $5000. In this example, the lease option reduced potential profits by 75% and increased potential returns by 350%.

5. Disadvantage: Pay more money upfront. Typically a lease option requires a greater amount of money upfront than renting. This is not always the case and depends on how desperate the seller is the lease the home. Generally you can expect to pay twice what you normally would put as a deposit on a comparable rental.

6. Disadvantage: Responsible for repairs. One nice thing about renting is that the landlord is responsible for repairs. In a typical lease option, you are entirely responsible for maintenance of a home.

There are both advantages and disadvantages to buying a lease option. When compared with the buying the home with a mortgage, there is really no disadvantage and when compared with renting, a lease option is a relative low risk investment for little additional out of pocket expense. The key, however, is in the terms of the agreement between you and the landlord. The terms are negotiable, so make sure you do so. To summarize, a lease option can be a win/win situation for both buyer and seller. If you are looking for a home but don’t have enough for a regular down payment or are not sure if the market is going to get worse before better, consider a lease option and rest easy.

Real Estate Advisor asked:

Now seems to be the best time to invest in properties in college towns where housing demand is high due to a soaring rental market according to the New rules of real estate by Business 2.0 Magazine. With home prices still out of home buyer’s range, and homeowners selling their homes due to rising interest rates, rents are expected to increase nationwide. This makes buying investment property in rental markets such as college towns an attractive option, one that is already being pursued by investors. Rents are expected to rise by 5 % by the end of this year according to the National Association of Realtors (NAR), and investors are looking at college towns with increased interest.

There are two major reasons why it is prudent to buy investment property in college towns now. When compared with other rental markets, the rentals in apartment buildings in college towns are much stronger and hence more profitable. This has been augmented by the fact that apartment buildings in college towns are fewer in number. This demand for apartment buildings has also increased due to the rising admissions in colleges mostly from the Gen Y or the echo boomers, which has further increased the asking rates in the college town rental markets. These properties have a low vacancy rate, especially in buildings located near the campuses. Investors in commercial apartment buildings also get to increase their rent with the mounting demand making such investment a highly profitable venture.

So if you are a prospective landlord who has decided to encash this favorable situation, then you can start with choosing the college town that has the lowest ratio of university-owned beds to the student population. As Michael Zaransky, co-founder of Prime Property Investors in Chicago says, prospective investors would do well to pick the college towns that have the ratio of university-owned beds to students at 30 % or lower. One should also look into colleges that propose to expand their student ranks by 2 or 3 % every year.

Investors should also need to take into consideration the disadvantages involved in owning commercial apartment buildings in college towns. The business could be trying sometimes, and involves risks with college policies liable to changes and the difficulty involved in predicting volatile student demand. However, considering the high rate of returns that the investment has to offer, the pros seem to far outnumber the cons making buying investment property in college towns a smart option.

Real Estate Advisor asked:

Second home sales have been increasing over the last few years with more people becoming second home owners. In 2005 alone, 40 percent of the homes sold were second homes. Demographics, all time low mortgage rates, and healthy rise in home prices have contributed to this development in the second home market. Besides these, a major factor that has helped augment the buying and selling of second homes is the real estate professional.

The National Association of Realtors conducted research on the profile of second-home owners in 2006. According to the NAR report entitled ’2006 Profile of Second-Home Owners’, a majority of second home sales transactions are conducted using the services of real estate agents.

The statistics are remarkable; 64 % of vacation home buyers purchased their home using the services of a real estate agent by the end of 2005 – a marked increase from less than 50 % of vacation-home buyers in 2003. Also, 65 % of investment-home buyers purchased their home with the help of a real estate agent – an increase from 53 % of pre-2003. In comparison, only 14 % of vacation-home buyers and 7 % of investment-home buyers purchased directly from builders from 2003 to 2005.

The growing role of the real estate professional is evident from the following figures:

1. Of vacation home sales made, 71 % of them were second homes and 74 % of the sales were made using the services of a real estate agent.

2. Of the investment properties sold, 85 % of them were previously owned and 62 % of the sales were made using the services of a real estate agent.

The use of real estate agents in second home sales transactions varied according to the home’ location.

1. Buyers used a real estate agent more frequently while purchasing a vacation home located in a suburb/subdivision (56 %) or a rural area (57 %) than for homes in other locations.

2. About 66 % of buyers who purchased an investment property in an urban/central city area or in a suburb/subdivision, used the services of a real estate agent more frequently than those who purchased a home in other locations.

Real estate professionals continue to be the first source of information to second-home buyers (38 % of vacation-home buyers and 34 % of investment-home buyers). The real estate professional also plays a major role when second-home owners plan to buy additional properties. If you are thinking of buying a second home or vacation home, seek out the services of a real estate agent to guide you through your next home purchase.

1. The percentage of second home owners who are more likely to use a real estate agent in their next home purchase is quite high. Among vacation-home owners it is 79 % and investment-home owners 73 %.

2. Among second home owners, 65 % of vacation-home owners and 64% of investment-property owners are more likely to use a real estate agent in their next home sales.

Given these statistics, it is no wonder that the real estate agent plays a pivotal role in helping people buy and sell second homes. So whether you are a second-home buyer or seller, enlist the services of an agent for a smooth, hassle free real estate transaction.

Real Estate Advisor asked:

Buying a home is a big-time real estate investment and has to be done with great prudence. Knowing where not to buy a home is as important as are the dos and don’ts of buying a home.

Of the many top ten lists on CNNMoney.com, there is listed the top ten overvalued cities in America where it is better not to buy a home for the next two years or so. The report states a variety of reasons for the unfavorable market conditions.

Five cities in California – Bakersfield, Fresno, Merced, Sacramento and Stockton, figure among the top ten cities that have the least possibility of home price appreciation. Home prices have reached a new high (by nearly 60%) in these areas over the past two years. With an economy driven by agriculture and relatively higher unemployment rates anticipated for that area, the real estate market is predicted to slump in the region.

Although three cities in Florida are recommended as good real estate buys, the report also cites four others in Southwest Florida that fall among the very bottom of the list. With home prices here expected to plummet very soon, cities like Fort Myers, Naples, Punta Gorda and Sarasota are those that one would do best to avoid for a year’s time or so, while buying a home or a condo.

Market prices are expected to decline in the Jersey Shore (New Jersey) area that saw a radical boom in the last two quarters. Although home prices in the third quarter have rebounded from the slight drop during the second quarter, the bubble is expected to burst soon and the overpriced market is likely to stabilize. The popular seaside cities of New Jersey, Atlantic City and Ocean city are anticipated to fall under the unfavorable list.

In Phoenix, Arizona, a hot favorite among investors last year, sliding home prices may to be an unavoidable occurrence in the next 12 months. With home prices dropping by more than $100,000 in some residential developments and investors trying to sell off their property, it is safer to wait for a year or longer before investing here.

Economists at Moody’s Economy.com also predict a sharp decline in Riverside and San Bernardino counties, California’s Inland Empire.

The bottom ten cities that are likely to see major drops in median home prices during the coming year are Stockton, (leading the list with a predicted fall of 9.7%), Merced, Reno/Sparks, Fresno, Vallejo/Fairfield, Las Vegas, Bakersfield, Sacramento, Washington, D.C and Tucson.

Given these fluctuating real estate market conditions, one should exercise a great deal of caution when investing in real estate. It makes sense to get the expert advice of a real estate agent to advise you about your next home purchase, since agents often have access to the most up-to-date real estate market data and neighborhood pricing trends.

John Marshall asked:

In the short span of life, a person face inescapable demands and fulfilling it becomes a challenge without the proper amount. To ***** such circumstances and hurdles hard money loans UK can assist you with the required amount if considered. So, it can well be traced that hard money is configured to aid in situations of emergency financial shortage.

In the market, Hard Money Loans UK are interrupted in various references because the cost and exorbitant charges of interest rates. The purpose that applicants can serve with the aid of hard money UK is elucidated with an example: if you are thinking of selling your property with a little bit of renovation and repairment, then considering hard money is the best suited. The hard money loans UK are crafted for UK citizens. Thus, with the aid and prop of hard money loans UK the applicants can earn a little bit and repay the loan without and strain.

To make the services more popular and promote them in a lucid manner, hard money loans UK are unleashed under different tags like business hard money loans, residential hard money loans and such. Because of such outstanding services, in less time this loan policy has become one of the highly recommended of critics and financial experts. The approval process is formatted in simple and easy to follow consuming less time. Hard money loans UK are secured loans and for the approval of this loan applicants have to pledge property in the form of collateral. Any property, residential or commercial can serve the purpose of collateral having value. Collateral carrying equity of higher value can pave the way for applicants to borrow more amount than mentioned.

Hard money loans UK can be approved from home or office with the help of online application practice. It gives results in instant saving the effort and valuable time of the applicants.