Understanding & Avoiding Foreclosure

Recent Statistics
Foreclosures in the U.S. have reached epidemic proportions. The foreclosure crisis is mainly
being driven by the massive unemployment and pay cuts being experienced by broad sections
of the U.S. population. California, Arizona, Nevada, and Florida continue to lead the U.S. in
foreclosure rates.

In 2007, 610,000 families in the U.S. lost their homes to foreclosure. During 2008, approximately
1 million families lost their homes to foreclosure to – an increase of almost 64%. In addition, 2008
saw an increase of almost 81% in pre-foreclosure filings. Approximately 2.3 million properties
entered some stage of foreclosure during 2008.

2009 was even worse! There were almost 2.8 million homes in the U.S. that received a pre-foreclosure
notice; and it is forecast that 2010 will once again set another record.

How Foreclosure Works
Foreclosure is the process through which a lender repossesses a property in an effort to recoup
money owed them by a borrower. When a borrower stops making payments according to the terms
of a loan, a lender will issue a Notice of Default. Usually, the lender will make attempts to get the
borrower to bring the loan current, by either demanding all past due payments, or sometimes
they will allow an alternative payment plan (see homeowner options). If a borrower is unwilling or
unable to comply, the lender will issue a Notice of Trustee Sale.

In this process, the lender will ultimately force the sale of the property through an auction – called
a trustee sale. The “Notice of Trustee Sale”, must be published in the local newspaper. The borrowers
will also receive a notice advising them of the details of the auction, which will be taped to their front
door. The lender will establish a minimum bid, which is typically equal to the amount that the borrower
owes (including penalties and fees). A reconveyance company will hold the auction in a public place,
and the winning bidder will take title to the home.

If nobody bids for the home, the lender takes title directly, and the home becomes the property of the
lender. If the former owner or tenant still occupies the home, they will be evicted. The lender will then
go ahead and list the property for sale with a Realtor.

The Effects of Foreclosure
Foreclosure generally has a far reaching impact on a borrower. Losing your home to foreclosure can
have lasting emotional consequences for all involved.  Psychologists have indicated that the escalating
pace of foreclosures and the rising fears of many homeowners about keeping up with their mortgages
are creating a whole range of emotional problems such as anxiety disorders, depression, and other
addictive behaviors. Often it brings a sense of hopelessness.

Foreclosure will also have a devastating effect on a borrower’s credit. Their credit score (FICO score)
will plummet making it very difficult to obtain “any” credit. It may also make it difficult and/or expensive
to rent another home. A foreclosure on a borrower’s credit report may preclude that borrower from
purchasing another home until 7 years have passed.

                                           Foreclosure can be avoided!
     Protect Your Dignity, Protect Your Credit – Call the Foreclosure Relief Team!

                                          Call today – 805-660-9459

          If you or someone you know is facing foreclosure, please call us today!

                                           Better options are available!