Four years of housing crisis, foreclosure myths still scatter the minds of real estate consumers.

• MYTH no.1 Foreclosure occurs fast. Nearly 60 percent of families seeking foreclosure counselling named a lost job/unemployment or wage cut as the culprit they were facing foreclosure according to Neighbor Works America.

Naturally in most states, foreclosure process can happen in as few as 6 months though it is currently much longer for the average foreclosure to obtain to finished. According to JP Morgan Chase, the average borrower who loses a property to foreclosure has not made any payments in 14 months nationwide; Florida in 22 months and 26 months in New York.

• MYTH no. 2: Buyers cannot acquire clear title or title insurance on foreclosed properties. The truth is, buyers of bank-owned properties in every jurisdiction are protected are guarded from later title assaults by foreclosed homeowners by the bona fide purchaser rule, in which courts will award cash damages to be paid by the blameworthy bank to a wrongfully foreclosed-on homeowner then reversing the sale or ownership to new and innocent buyer. In addition, title insurers have now transformed their tune and restarted issuing insurance policies on bank-owned properties that safe buyers’ interest, after working with the banks for them to take liability in the moment a former homeowner prevails in a wrongful foreclosure suit.
• MYTH no.3- Buyers should wait for the shadow inventory to be available. The fact is, to the extent that financial institutions have acknowledged the existence of numbers of homes they own but are not selling, they have stated that their reasoning for holding the properties off the market is to prevent flooding the market and pushing home values down any further. With that, buyers should not anticipate to see a massive flood of these shadow homes onto the market anytime soon.

• Myth no.4 – Of you are looking for a good deal, you are looking for a foreclosure. Individual owners are much often provide more negotiable on a wide range of contract terms compared to bank which owns a foreclosed property. In fact, many individually-owned homes are in perfect move-in condition as to homes with foreclosures. Keep in mind to not underestimate the value of the deal you might be able to acquire on non-foreclosed properties. Just state on what you can afford and search at all homes the are available in that value range without discerning against non-foreclosures.

MYTH no.5 –Foreclosure on your credit limit means it takes years before you can purchase again. Until recently, the standard wisdom was that 5 years minimum would have to lapse between the foreclosure and the new home purchase. But now, borrowers can get an FHA loan as much as 3.5 minimum down payment requirement as soon as 3 years following a foreclosure.

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