Buy and Bail

A NEW TWIST ON WALKING AWAY FROM A MORTGAGE

In the hardest hit housing markets, some borrowers with a mortgage worth much more than their home are buying a second home before walking away from their primary residence - a strategy known as Buy and Bail.

How It Works: Borrowers can qualify for a second loan by proposing to rent out their existing residence to cover the second mortgage payments. Once they are approved for a loan, they walk away from the existing home instead of renting it out.

Consequences: Homeowners with a foreclosure will take a big hit to their credit and won't be able to purchase a home for five years under new Fannie Mae guidelines. Also, lenders might sue for personal assets and for fraud.

Lenders Respond: Fannie Mae says that later this month, it will release tougher loan qualification guidelines designed to ensure that individuals who plan to rent their first home after buying a second home show proof that they can make both payments.

Visit the Real Estate Open Networkers

Foreclosure Capital Hit With Wildfires

Stockton, California has the highest foreclosure rates per capita of any city in the United States. As if that weren't enough, four wildfires destroyed 7 houses, 20 condominium units and a small apartment building today.

Two firefighters suffered minor injuries battling the blaze. The number of people displaced is unknown at this time.


Real Estate Open Networkers

May Foreclosure Report for Broward County

In May of 2007 there were 1299 foreclosure actions filed. This May, the court reported that 3090 foreclosure actions filed.

Miami Dade county to the south and Palm Beach county to the north were reporting similar numbers.

Saint Lucie County is being hit harder than most counties in the state.

With all these foreclosures, the real estate market is being flooded with inventory that is driving down real estate prices by the week. According to one Realtor, "50 to 75 per cent of the houses I show are short sales or foreclosures." "These type of properties are in low end housing developments as well as million dollar neighborhoods as well," he added.

Real Estate Open Networkers

Foreclosures Filings Jump in 2008

Real Estate filings across the nation have jump substantially in 2008.