Saving Family's From Foreclosure


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This is a detailed presentation on how Prudential and The Delaney Team can assist family's that are facing Short Sale or Foreclosure.

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Saving Family's From Foreclosure

  1. 1. Saving Families From ForeclosurePresented By
  2. 2. Options to Avoid ForeclosureOPTIONS TO AVOID FORECLOSUREIf your home is at risk of foreclosure, you don’t have to panic. There are many ways to ease the difficultsituation, and one may be right for you.Reinstatement: To reinstate a mortgage, the homeowner has to pay all the missed payments, late fees andlegal fees that are due up to the date that the loan is reinstated.Forbearance or Repayment Plan: The lender allows the buyer to pay the missed amount over a period oftime or the lender places the missed payments on the end of the amortization of the loan.Rent the Property: In same cases, homeowners facing foreclosure will have payments low enough to allowthem to rent their property and keep up their mortgage payments.Sell the Property: If sellers have equity in their property, they can sell it and prevent foreclosure.Refinance: If homeowners have sufficient equity and income and their credit has not been too badlydamaged, they may be able to refinance.Mortgage Modification: A loan modification is very similar to a lower interest refinance where the lenderlowers the interest rate on the existing loan to lower the payments.Short-Refi: This process involves the refinance of a home with a reduction in the principal balance andoften the interest rate as well.Deed-in-lieu of a Foreclosure: A deed-in-lieu of foreclosure is sometimes referred to as a friendlyforeclosure.Bankruptcy: A bankruptcy may stop a foreclosure and allow homeowners to reorganize their debt andkeep their property.Service Members Civil Relief Act (SCRA): This law provides certain protection to military personnel whoare in foreclosure in specific situations.Short Sale: When homeowners owe more on a property than it currently is worth and one of the previoussolutions does not apply to their situation, there is the option of pursuing a short sale.
  3. 3. FORECLOSURE VS. SHORT SALE Homeowner Consequences... ISSUE FORECLOSURE SUCCESSFUL SHORT SALEFuture Fannie Mae Loan Primary A homeowner who loses a home to foreclosure is A homeowner who successfully negotiates and closesResidence (Effective May 21, 2008) ineligible for a Fannie Mae backed mortgage for a a short sale will be eligible for a Fannie Mae backed period of 5 years. mortgage after only 2 years.Future Fannie Mae Loan Non Primary (Effective May An investor who allows a property to go to a An investor who successfully negotiates and closes21, 2008) foreclosure is ineligible for a Fannie Mae backed a short sale will be eligible for a Fannie Mae backed investment mortgage for a period of 7 years. investment mortgage after only 2 years.Future loan with any mortgage company On any future 1003 application, a prospective There is no similar declaration or question regarding a borrower will have to answer YES to question C in short sale. Section VIII of the standard 1003 that asks, “Have you had property foreclosure upon or given title or deed in lieu thereof in the last 7 years?” This will affect future rates.Credit Score Score may be lowered anywhere from 250 to more Only late payments on a mortgage will show and than 300 points. Typically, this will affect a score for an after sale mortgage will be reported as paid or more than 3 years. negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale’s effect can be as brief as 12 to 18 months.Credit History Foreclosure will remain as a public record on a A short sale is not reported on credit history. There is person’s history for at least 10 years. no specific reporting item for a “short sale.” The loan is typically reported “paid in full, settled.”Security Clearances Foreclosure is the most challenging issue against a A short sale on its own does not challenge most security clearance outside of a conviction of a serious security clearances. misdemeanor or felony. If a client has a foreclosure and is a police officer, in the military, in the CIA or any other position that requires security clearance, the clearance will be revoked and the position will be terminated. Foreclosure Vs. Short Sale
  4. 4. Loan Modification Vs. Short SaleFrom Condos to Multi-Million Dollar Estates, a short sale may be the best solution for you.Fact – Loan Modifications are hard to come by, rarely offer principal reduction and generally requiremany months of frustration to get any answers.Solution – NO COST SHORT SALE. Your mortgage debt may be eliminated and it will cost younothing.Fact – Loan Modifications generally require you to fall behind three months or more before the lenderwill talk to you.Solution – NO COST SHORT SALE. Can be completed while current on your payments allowingyou to purchase another property immediately (Per Fannie Mae/Freddie Mac)Fact – ¼ of all mortgage holders in Southern California owe more on their mortgage than theirproperty is worth.Solution - NO COST SHORT SALE. A workout that allows you to get away from a bad debt you canno longer afford.Fact – A Foreclosure is extremely damaging to your credit,job or promotion prospects and will causeyou to be viewed as a security risk.Solution - NO COST SHORT SALE. Is viewed as a workout, not a kick-out; Is far less damaging toyour credit and allows you to borrow money again far more quickly.Fact – Foreclosure is very expensive to the bank and is damaging to local communities and theeconomy.Solution - NO COST SHORT SALE. Is beneficial to all involved and helps the communities andeconomy.Is your loan modification keeping you stuck? A short sale could be the solution you need. We have theexperience, knowledge and the contacts with banks to get your short sale completed now.Please contact us today to learn more!
  5. 5. The Short Sale ProcessA successful short sale requires a lengthy process, one that is best initiated early on. The entire short saleprocess can take anywhere from three months to a year or more when considering the many negotiationsneeded before the actual sale. Our short sale experts will be invaluable assets for anyone seeking a shortsale, helping to make sure communication is expedited to see the process resolved.The following steps are involved in the short sale process:You must be considered in a distressed state, most often with the home entering the foreclosure process,but many lenders are now willing to negotiate a short sale even if your mortgage payments are current.Proving your financial situation to your lender may help them reconsider allowing a short sale of yourproperty.In order to prove to your lender that you are not able to make your mortgage payments, you must gatherdocuments of proof of your financial hardship. These documents are similar to those you may haveused initially to qualify for your home loan, but this time you are proving that you would disqualify forthe loan. Additionally, a letter explaining the cause of your financial hardship should be written. Thesedocuments, combined with market trend reports, market analysis, and any other useful information thatcan help your lender decide why your request for a short sale should be granted.If your lender agrees to accept a short sale, your home must be placed on the market and evidence ofa concentrated effort to sell the property at market value must be provided. Your lender must receivedetailed information about the effort to sell your property, another advantage of hiring a short saleexpert from Advantage Short Sales to aid in the process.Once you have found a buyer for your home, thepurchase contract and other documents are provided to your lender for approval. If your lender acceptsthe offer, the sale of your home continues in the same way as any other real estate transaction.In most instances, your lender will pay almost all of the fees and commissions required by all of theparties involved in the process, leaving you to pay nothing. However, your lender may require you topay for any appraisals or back dues owed to a homeowner’s association. In no instance are you allowed tocomplete a short sale with any form of financial gain or proceeds.