Friday, February 6, 2009

Lethbridge Foreclosures and Bank Owned Properties

For the past 25 years foreclosures and bank owned properties have been a rarity in Lethbridge. Yes there has always been one or two that appear on the market, typically due to bankruptcy or judicial actions, but certainly no where near the number that one would expect in a city of this size nor near the levels seen back in the early 80's. This situation is already starting to change and there has been a marked increase in the number of homes that are currently in arrears or in full blown foreclosure proceedings. Many of these homeowners would be able to stop the proceedings and save their homes if they had the foresight to take action earlier. However, what I have found is that by the time the homeowner realizes that they are in a hole that they cannot get out of and need to take some action, their efforts are too late.

Homeowners do not realize that once you start to miss payments, your credit score drops like a rock. You may have a house with $100k equity in it, but if you miss payments and your credit score falls, there are almost no lenders who will help bail you out. Despite the fact that you have tons of money invested in your house, the only solution if you wait this long is to sell the property. Banks are quite lenient at first when you miss a payment. They really do not want to own your house, they are in the money lending business not the property babysitting business, so they will work with you to see that you continue to pay them money on an ongoing basis as long as they possibly can. But, once you miss payments, ignore their letters and phone calls, they have no other option but to send your mortgage to their collections and legal department. At this point, you will be stuck with a raft of new fees and expenses which will add onto the missed payment amounts. Once this happens, most homeowners are beyond recovery. If you did not have the money for the last 3 payments, you certainly do not have the money for the last 3 payments plus a couple thousand bucks for a lawyer and court costs.

Homeowners, if you are having trouble making your payments on a regular basis you need to take action ASAP before it hurts your credit score or the debt starts to spiral out of control. Do not be embarassed or ashamed, it happens to far more people than anyone realizes. Call me ASAP if you are finding yourself at the beginning of such a crisis.

That being said, these properties often create opportunities for buyers and investors. Maybe the homeowner needs assistance and would be willing to stay and rent back the home. Maybe the homeowner needs a small cash equity loan and is willing to pay an above market interest rate. Maybe there is an opportunity for the buyer and the seller to come to some sort of agreement that helps them both out.

As a mortgage associate and a real estate broker, I often catch wind of distressed situations and am called in to help. This often happens long before the property ends up in foreclosure and my goal is to prevent that from happening to anyone. If you think the best property deals ever reach the MLS system or the crappy paper publication printed and inserted into our horrible excuse for a newspaper, you are mistaken. The best deals never last that long. If you have an interest in helping distressed homeowners out or maybe picking up a distressed sale property, give me a call and let me know what your needs are.

Here are a few of my favorite past articles from my Lethbridge real estate and mortgage blog you might have missed or wish to recommend them to a friend.

Common Financial Problems - Avoid these financial mistakes
Get Your Credit Score UP - Invaluable insight into your credit score
Mortgage Guidelines Get Tighter - Harder and harder to borrow money
Is Your Mortgage Company Out of Business in 2009? - What to do when your bank goes broke
What is wrong with MLS - Is your info being abused?
Survivor - Real Estate Edition - Let's vote a few more off the island

Robert May is a Realtor, as well as the broker and owner of Rainbow Realty of Lethbridge Alberta. He is also a licensed mortgage associate and financing expert with Canada First Mortgage of Calgary Alberta. He has been in the real estate industry since 1993 and offers full MLS real estate services to Lethbridge and surrounding area, as well as mortgage financing, refinancing/renewals, preapprovals, and home equity financing to Lethbridge and Southern Alberta. He can be found online at

Let me share my 15 years experience in the local Lethbridge real estate and financing market with you! It is the first step towards making a profitable real estate decision.

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