3rd topic in Options:  Are You At Risk of Foreclosure? Series

A Deed in Lieu of Foreclosure occurs when the borrower agreed to trade the property to the lender in exchange for the cancellation of the note.  This foreclosure alternative is more likely to work where there is a long foreclosure timeline.  The lender will be able to get the property much sooner than going through the foreclosure process, which lessens the probability of the property being in disrepair as well as eliminates the lenders costs to foreclose. 

Market conditions as well as Colorado-specific laws will influence whether and  how a lender accepts a deed in lieu of foreclosure.  Typically, lenders are less willing to consider a deed in lieu of foreclosure in declining markets.  However, in appreciating markets, lenders may accept properties in lieu of foreclosure.

Colorado does have a deficiency law, so speak with a real estate attorney before signing or agreeing to any lender documents.  It may not make economic sense to give back a "deed in lieu of" unless the Lender Acceptance Agreement clearly stipulates that the homeowner does not have an obligation for the deficiency amount.  Again, always seek professional advice for details and all related stipulations and repercussions.  

 
*Excerpts from Realtor.com  

Appraisal - An Important Step in the Mortgage Process

Be an Informed Buyer and Seller

What is an Appraisal?  A real estate appraisal helps to establish a property's market value-the likely sales price it would bring if offered in an open and competitive real estate market.   

Why do Lenders require an Appraisal? Your lender will require an appraisal when you ask to use a home or other real estate as security for a loan, because it wants to make sure that the property will sell for at least the amount of money it is lending. 

Appraisals are detailed reports, but generally they include:

• Details about the subject property, along with side-by-side comparisons of three similar properties.

• An evaluation of the overall real estate market in the area.

• Statements about issues the appraiser feels are harmful to the property's value, such as poor access to the property.

• Notations about seriously flawed characteristics, such as a crumbling foundation.

• An estimate of the average sales time for the property.

• What type of area the home is in (a development, stand alone acreage, etc.).

Final loan commitment usually hinges on a satisfactory appraisal. The bank wants to be sure its investment is covered in case you default on the loan. If the property appraises lower than the sales price, the loan might be declined.  This effects both the buyer and seller. There are many reasons why an appraisal would come in low. Don't panic, there are options for both buyers and sellers: the buyer can make up the difference in cash, the seller can lower the price, the seller can offer to carry a second mortgage for the difference, second appraisal ordered, supply a list of comparables, and canceling the transaction are some of the options.

* Excerpts from AppraisalInstitute.org 

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Election Day

City of Colorado Springs 

Date:  Tuesday, April 5, 2011

Deadline for ballot drop-off:  7:00PM, April 5, 2011

Ballot Items:

Mayor; Council Member At-Large; Council Member-District 3; Council Districts

Mayor Attendance

Questions? City Clerk's  Office/Elections Office: 

(719) 385-5901