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Foreclosure Auction in Midtown

Updated: Sunday, 07 Jun 2009, 7:57 PM EDT
Published : Sunday, 07 Jun 2009, 4:02 PM EDT

    A foreclosure auction in Manhattan was packed with house-hunters looking for a bargain.

    More than 120 properties from New York, New Jersey, Connecticut, Pennsylvania, Massachusetts and Rhode Island were up for grabs.

    Watch the report from Fox 5's Carolyn Gusoff (video, left).

    Thousands packed Sunday's auction at the Grand Hyatt on East 42nd Street.

    All the homes were owned by banks. Prospective buyers were able to tour the homes in advance.

    There were condos, single-family houses and duplexes and some starting bids were as low as $500.

    Some were in good shape and some advertised as fixer-uppers, with problems such as mold, water damage and vandalism.

    The Real Estate Disposition Corp. ran the auction.

    Protesters held a rally outside the Grand Hyatt and called for a moratorium on all foreclosures and evictions, which they say allow the mortgage industry to profit from other people's misery.
    .
    Below are resources for people dealing with foreclosures.

    AUCTION.COM

    FINANCIALSTABILITY.GOV

    TIPS FOR AVOIDING FORECLOSURE

    A foreclosure is the legal process whereby property rights to one's home are stripped away due to inability to maintain the obligations of a mortgage. The process can take anywhere from 6 weeks to 18 months, depending on you live.

    If you are having trouble paying your mortgage, foreclosure is not a foregone conclusion. The Department of Housing and Urban Development has tips for avoiding foreclosure.

    1. Don't ignore the problem.
    The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

    2. Contact your lender as soon as you realize that you have a problem.
    Lenders do not want your house. They have options to help borrowers through difficult financial times. 

    3. Open and respond to all mail from your lender.
    The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems.  Later mail may include important notice of pending legal action.  Your failure to open the mail will not be an excuse in foreclosure court.

    4. Know your mortgage rights.
    Find your loan documents and read them so you know what your lender may do if you can't make your payments.  Learn about the foreclosure laws and time frames in your state (as every state is different) by contacting the State Government Housing Office. 

    5. Understand foreclosure prevention options.
    Valuable information about foreclosure prevention (also called loss mitigation) options can be found on at: portal.hud.gov/portal/page?_pageid=33,717348&_dad=portal&_schema=PORTAL .

    6. Contact a HUD-approved housing counselor.
    The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide.  Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

    7. Prioritize your spending.
    After health care, keeping your house should be your first priority.  Review your finances and see where you can cut spending in order to make your mortgage payment.  Look for optional expenses -- cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

    8. Use your assets. 
    Do you have assets -- a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income?  Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home. 

    9. Avoid foreclosure prevention companies.
    You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender.  While these may be legitimate businesses, they will charge you a hefty fee (often two or three months mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

    10. Don't lose your house to foreclosure recovery scams!
    If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home!  Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.

    If Your Problem Is Temporary

    • Reinstatement: Your lender is always willing to discuss accepting the total amount owed to them in a lump sum by a specific date. They
    • will often combine this option with a Forbearance.
    • Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time after which another option must be agreed upon to bring your loan current. A forbearance option is often combined with a Reinstatement when you know you will have enough money to bring the account current at a specific time in the future. The money might come from a hiring bonus, investment, insurance settlement, or a tax refund.
    • Repayment Plan: You may be able to get an agreement to resume making your regular monthly payments, in addition to a portion of the past due payments each month until you are caught up.

        If it appears that your situation is long-term or will permanently affect your ability to bring your account current:

    • Mortgage Modification: If you can make the payments on your loan, but you do not have enough money to bring your account current or you cannot afford the total amount of your current payment, your lender may be able to change one or more terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways:
    •     Adding the missed payments to the existing loan balance.
    •     Changing the interest rate, including making an adjustable rate into a fixed rate.
    •     Extending the number of years you have to repay.     
    • Claim Advance: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor to bring your account current. The repayment of this loan may be delayed for several years.

      If Keeping Your Home Is Not An Option

    • Sale: If you can no longer afford your home, your lender will usually agree to give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to obtain the services of a real estate professional who can aggressively market the property.
    • Pre-Foreclosure Sale or Short Payoff: If the property's sales value is not enough to pay the loan in full, your lender may be able to accept less than the full amount owed. This option can also include a period of time to allow your real estate agent to market the property and find a qualified buyer. Monetary help may also be available to pay other lien holders and/or help toward paying a few moving costs.
    • Assumption: A qualified buyer may be allowed to assume your mortgage, even if your original loan documents state that it is non-assumable.
    • Deed-in-lieu: Your lender may agree to allow you to voluntarily "give back" your property and forgive the debt. Although this option sounds like the easiest way out for you, generally, you must attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. Also, this option may not be available if you have other liens such as judgments of other creditors, second mortgages, and IRS or State Tax liens.

    • Copyright AP Modified, Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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