Foreclosures in Florida especially Naples are on the rise due to the economic crisis. Naples Foreclosures have left residents in the lurch but they are a boon for foreclosure buyers but how do they proceed to buy foreclosures.
First it is key to understand the process of foreclosure. Any real estate transaction has two documents: promissory note as well as the mortgage. The Note will contain the borrowed amount, interest rate and loan duration. The Mortgage pledges the property as collateral for non payment of the note.
Home owners who default on mortgage payments have several options other than out right foreclosure. They are: a) Loan modification b) short sale c) Deed in Lieu of foreclosure
Loan modification involves negotiating with lenders to decrease monthly installments, or prolonging the loan term. Short sales are selling the property at a lower rate than that amount owed in the promissory note. The lender supports the short sale as he makes a better deal than the possible losses he will incur after a foreclosure sale.
The concept of deed in lieu of Naples foreclosures is the situation when the homeowner stops foreclosure by transferring property title on to the lender directly. This is possible if junior liens are absent on the property. Similar to a short sale the home owner as well as the lender forms a contract which specifies the conditions for acceptance of the deed in lieu.
When a home owner fails to pay the amount due in the note and a modification, short sale or deed in lieu is not possible, the lender has three legal courses before him:
a) Sue on the promissory note b) forecloses on the mortgage and c) enter into a single law suit that sues on the note and forecloses on the mortgage.
In May 2008, a new taskforce was formed in Colliers County to save homes from foreclosure. It is a collaboration between Legal Aid service of Colliers County and the Collier County Bar association. The new group based its efforts on education, prevention and intervention. It works in tandem with local associations like the Great Naples Chamber of Commerce. They have conducted work shops on topics like how to work with your lender and how to avoid Naples Foreclosures.
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