The Million Dollar Foreclosure System - Part 2 2-2
The years 1971 through 1975 are in another section.
The years 1976 through 1980 are in another section.
…and so forth.
For documents recorded within the current year there may be monthly,
weekly or daily listings. This allows you to search for anything that was recorded
as recently as the day before your visit.
The system you are learning here requires that you gather all of the newly
recorded Notices of Default once each week. You do this one of two ways. If you
can access these files from you home computer (as you can in some areas) that
is one way. If you can’t do that then you must visit the county office where the
records can be found.
Find the Grantor/Grantee index that lists all of the documents recorded
during the past week. Look down the DOC column to find any Notices of Default.
Write down the document number (NUM) of each one you find. After you’ve
gathered all of these numbers you are ready for the next step.
The document number that has been assigned to each recorded
document will lead you to a copy of the original document. This will be in another
file somewhere in the same office.
A variety of numbering systems are used, but most go something like this:
As each document is received for recording it is stamped with a number.
The documents are stamped with consecutive numbers in the order in which
they are received. Next they are photographed onto microfilm in the same order.
Or they are scanned into a computer file.
Each roll of micro film or computer file is labeled with the range of
documents they contain. For example the microfilm cassette might bear the
numbers 1230897 – 1231645. That means that all documents with numbers that
fall within that range will be contained on that reel of film. There may be a similar
system for computer files.
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In assigning numbers some county offices use a reel, book or computer
file number followed by the document number. The principal is the same.
Using the document numbers you found in the Grantor/Grantee index, find
the copy of the document. When you have located each NOD find the name of
the property owner being foreclosed upon and the address of the property.
There is other information in the document that you might find useful later,
if you find the owner is willing to sell. Right now, to save time, you want only the
owner’s name and address.
Yes, this sounds complicated as you see it explained on the page, but it is
simple once you get in the county office and do it. Just ask for help the first time
or two.
Here’s a recap of these first steps:
1. Search weekly Grantor/Grantee index for Notices of Default.
2. Write down the document number of each default notice.
3. Search files for copy of that notice.
4. Write down name and address of owner on the INFO SHEET.
Depending on the size of the county your are searching you may have just
a few names or hundreds. This is very tedious work, but you should do it
yourself while you learn exactly how the system works. After you have
completed a deal or two you will want to hire someone to do it for you.
You may have a family member who would like to earn some extra money
by searching records for you. If not, you may find that there are a few people in
your county who research public files for a living. Ask at the county office desk if
they know of anyone who does such work. Or just keep your eyes open on your
visits and notice if you see a person or two who seems to be there every time
you are. Often these searchers are happy to find a new customer.
There is another, less labor intensive way to find Notices of Default. Many
counties have a legal or commercial newspaper that prints information from the
public records and public notices.
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You will usually find a section devoted to foreclosure actions.
Check with the librarian in you public library or in the legal library. Each
may have a copy of your county’s legal newspapers. Or look under newspaper
in the Yellow Pages and you may find one listed that specializes in publishing
legal notices.
In some counties you may find a private service that provides daily or
weekly information on foreclosures for a fee. In a few areas this information is
available from a computer database. With a modem equipped computer you can
dial into the database and print out the information.
There are a couple of online services that provide foreclosure info. Do a
Google search for "foreclosure listings".
These publications and services make finding properties in foreclosure
much easier. BUT it makes it easier for everyone! That means that you will have
at least some competition. Be careful! Some of these services are selling old
and outdated listings. Demand references and check them out.
If you are in an area where you have to dig the information out of the
public records you will have a much higher contact-to-purchase ratio, because
you will have fewer competitors trying to buy the properties. Even if you are
located in an area with a smaller population you can still produce good profits,
because few people will have the determination to stick with digging out the
information needed.
Whatever the situation in your area, never fear! This system gives you a
proven advantage over what others are doing.
You’ve been very patient. We’ve had to plow through these nuts and bolts
before you can get into the good stuff. Keep the faith and read on!
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Chapter Three
PRE-FORECLOSURE
This chapter contains truths about distressed property owners and why
you will be contacting them in the "pre-foreclosure" period. That is the period
between the recording of the Notice of Default and before the sale of the
property on the courthouse steps.
Now, it is true that every pre-foreclosure system is based on searching out
owners in default and attempting to buy the property before the sale. In other
systems you must knock on the door of the distressed owner, call on the phone
or send a letter or two
If you have ever tried the first two methods you know they can be very
unpleasant experiences. People facing foreclosure are under a great deal of
stress and often react with unpleasantly towards those who make an uninvited
personal contact with them.
Just mailing letters has never proven to be very productive … until now!
We have created a system that combines pre-foreclosure knowledge with
direct marketing techniques. This blend has proven to be very successful,
producing an income of over $30,000 per month for some. And a few have done
that on a part time basis.
Please understand! Most will NOT do that well, but some do and that
illustrates the potential of the system.
Your task is to learn the details of your state’s foreclosure laws. You must
become very familiar with exactly how foreclosure works. Most states have strict
laws protecting those being foreclosed upon from the unscrupulous.
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To avoid legal hassles and to be of real service to a homeowner you must
have a solid understanding of foreclosure laws. Your goal is to make a profit, but
you want to do it in a legal and responsible manner.
Once you plunge into your online or law library research you will find it is
not at all difficult to learn what you need to know about foreclosure. You will
quickly recognize what sections of the law you should study and what parts will
not pertain to your pre-foreclosure activity.
Direct marketing! It has been a dynamic method of building the sales of
many products and services in the last decade. Here in the new century it is
going to build fortunes in pre-foreclosure investing.
This pre-foreclosure, direct marketing system is based on direct mail and
audio recordings. It is the combination of the two that makes this the most
powerful and profitable foreclosure system ever developed. It opens the door to
profits in a way no other system can.
Best of all the system is really very simple once you have it set up and
running. The nice part is that much of it can be done by near minimum wage
employees after you have developed hands-on experience and accumulated
some cash reserves.
To grasp the system put yourself into the distressed property owner’s
shoes for a few moments. He is having financial problems. The troubles are
usually the symptom of some other event in his life – divorce, illness, loss of
employment or just plain lack of control over his spending habits. One of the
unhappy facts of today is that a large percentage of those in financial trouble got
there because of drug and alcohol abuse.
It is likely that the homeowner has already missed payments on his car
loan and credit card bills. Utility companies are after him for over-due bills,
collection companies are dunning him and all kinds of creditors are on his back.
He’s been straining to keep the payments on his home current. That is the usual
pattern.
When money gets short they let the other debits go, but keep paying on
the home loan, so the family won’t be without a place to live.
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Finally it becomes impossible to keep making payments on the home and
the debtor slips into default.
Missed home payments are a sign of serious financial trouble. A person’s
home is sacred to him/her and usually they will struggle as long as possible to
make the payments. At this point you know the person is in financial and
emotional distress.
When the Notice of Default is recorded the home owner becomes a target
for all of those who recognize his plight and they begin moving in and attempting
to contact him about buying his home. They will knock on his door, call him on
the phone at all hours, send letters and generally hound him into feeling even
worse.
You must have a better plan if you expect to get through all of those other
distractions. In most cases these owners want to keep their homes. They are
sure they will be able to raise the needed money to bring the payments current –
somehow.
They will sell something, someone will give them a loan, their relatives will
come to their aid or they just unrealistically hope for a miracle.
Recognize the fact that for the first few weeks after the Notice of Default
has been served on them the homeowner will not face up to the fact that he is
going to lose his home. He will be embarrassed by, and resentful of those who
aggressively contact him. He is still in denial. He believes he can solve his
problem.
One of three things will happen to the homeowner in default:
1. He will somehow raise the money to bring his loan payments current. He
may be able to do this by refinancing his home. If he has enough equity he
can borrow money by placing a second mortgage on his home. A friend,
relative or employer might provide a loan. He may raise the money by
selling something. Even so, these people are often right back in
foreclosure within three to six months.
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2. He will do nothing. For some reason a certain number of people in
default take no action at all. They may just sit there thinking that somehow
they will be saved. Or they move out of the home thinking they are leaving
all of their problems behind. They won’t talk to you, or if they do they won’t
let you help them. When you encounter this type don’t wear yourself out
wondering why. Just expect it in a certain number of cases. Nothing you
can do will change them.
3. The distress owner ill sell his home. This will allow her to have enough
money to pay off the existing loan, back payments and costs.
Solution number three is where you come in. In most cases selling the
home is the best course of action for the owner in default. It allows her to
salvage at least a portion of the equity she may have in the home.
Selling also keeps a foreclosure from showing up on her credit report, a
very important consideration as she rebuilds his life. It is difficult to get financing
for another home with a prior foreclosure appearing on a credit report. It takes
about seven years before a foreclosure will be removed from credit records. In
most cases people get their lives back on track before that and want to buy
another home.
Those are your two strongest arguments when dealing with distressed
homeowners:
A. "Save at least some of your equity."
B. "Protect your credit record."
You must explain how important these points are going to be as the
owners put their lives back together and try for a new start in their financial life.
The third most important point in your effort to motivate them is:
C. "I can help you escape the stress and anguish you have
been experiencing."
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Now you can see that your goal is to buy a property that is facing
foreclosure from the distressed owner during the period before it goes to public
auction. This is your period of opportunity.
Please understand that you will provide a valuable service to defaulting
property owners, because of your home buying skill and your understanding of
the foreclosure process.
The homeowner has only a limited amount of time to save himself. His
best chance is to put his home on the market the moment he receives the Notice
of Default. It takes time to sell a home and that is something he is short of. Look
at the problems he faces with the conventional home sales process:
1. His best chance of selling is to list with an agent and get his home on
the multiple listing service, but often the distressed owner will waste time trying
to sell the home himself.
2. Then he must find an agent and get the home listed.
3. Time passes while the agent gets the word out about the home being
offered for sale.
4. A buyer may be found, but the buyer then must arrange financing. This
takes time! What if the buyer finds he can’t qualify for a loan? More time lost!
5. Seller finds a buyer and the deal goes into escrow. Many things can
happen here to delay or kill the deal. Structural damage could be revealed by
the pest inspection, the financing may fall through, title problems could develop,
a busy escrow company swamped with work could delay the closing, etc.
If the homeowner acted quickly she might have time to sell through normal
channels, but many don’t. She may find herself only days away from the forced
sale with an urgent need to find a buyer. That’s where you come in.
You must be able to let these folks know you are ready, willing and able to
solve their problem by buying the home RIGHT NOW! How you do this is the
subject of the next chapter. This document and accompanying materials are designed to provide authoritative information in regard to the subject matter covered in it. It is for illustration purposes only and presented with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. |
