WABROKER

This article is from my apprenticeship/training course for   short sale negotiators and real estate agents.

In less than 1500 words it gives complete step by step instructions on how to get free Stop Foreclosure Help by doing it yourself.

It is a bit technical but this subject is very complex and I have tried to reduce it to its simplest terms so anyone with an 8th grade education can understand and use it.

It is being made public here for the first time. I hope you find it useful.

As with all these posts please feel free to comment or ask questions at any time.

Do It Yourself Stop Foreclosure Help

Foreclosure is the process whereby a holder of a non performing note can take legal title to the asset that was pledged as security for the note. A non performing note is simply a note that has not been paid as agreed or in other words, the payments (1 or more) are late. Instead of “note” you can substitute the word “loan”  and the sentence will make sense to most people because most of us think of loans as “loans” and not as “notes” with “collateral agreements”or “security agreements.”

The reason that the payments are late is a critical piece of information in deciding how to proceed.

If the borrower ( the person that has to make the payments when they are due) was paid late one month or if they had extraordinary expenses that will not be continuing expenses then the late payment can usually be made up long before the note holder (the person that receives the payment on the note) has to take action such as foreclosure.

If the reason the payment is late is because the borrower lost his job and can not find another job for an extended period of time then the note holder knows the late payments are not likely to be made up.

This critical piece of information is what causes the note holder to decide to foreclose.

In this current economic climate in addition to the borrower losing their job, the values of the property that was pledged as security for the note (that is your home in most cases) has lost upwards of half its value.  Therefore the security is no longer sufficient to “secure” the loan.  That is, if the note holder forecloses on the note they are not going to get all their money back.

The way to transfer this property to a new owner and recoup at least some of the note holder’s money is the thing that we call a ” short sale”.

“Short” because the amount of money to be realized from the sale of the asset will be short and will not equal the amount owing.

I called this article “Do It Yourself Stop Foreclosure Help”.

It should be called “Prolonging Foreclosure as an alternative”.  Let me explain why.

If you can not make the payments on your home and this is not likely to change any time soon then foreclosure is inevitable for the reasons given above.

Knowing this critical piece of information allows you to decide in a businesslike manner how to proceed.

When foreclosure is inevitable, using up your savings to put off the foreclosure date for a short period of time does not stop foreclosure and it doesn’t help either. Instead, you just lose your home a few months later, and now you have to relocate without any cash to do so.

Once you come to the conclusion that foreclosure is inevitable the best business decision one can make, in most cases, is to prolong the process but not to stop it. Prolonging the process is often free and stopping it usually costs something.

While in foreclosure you still have the use of your home.

Not having to  make any payments while still living in your home gives you the ability to recover financially while preparing to find and move to another home that you can afford.

In foreclosure there are very few scenarios where the homeowner gets anything at all from the bank for giving up title to their home. The one thing of immense value that can flow to you under the circumstances is to have a place to live for a short time that has little or no monthly expenses associated with it. Of course you must still pay utilities, phones and things like that but generally the largest expense in anyone’s personal budget is their monthly rent or mortgage payment(s).

When you consider how your cash position improves if you have no rent or house payment for 6-12 months (yet still have a safe clean place to live) it is easy to see the point here.

Here are the steps to prolong foreclosure for little or no cost. First, ask for help.

Lenders are receiving huge bailouts from Federal tax dollars to offer programs to help people remain in their homes. Most of these programs have dismal track records as far as helping people stay in their homes for the long term. All of them can prolong the process for months, and all can be applied for free through your lender.

Start by asking for a loan modification.

Few people overall are granted such things. Most are of little value since currently over half of the people who obtain them are back in foreclosure within 6-12 months. The process can take weeks or months. During this time you are still entitled to possession of the property which usually means you have someplace to live that costs little or nothing at all.

Possibly you can build a cash reserve in this period. It is also possible that you will find another home that you can afford with your current means. The longer this period of “little or no monthly housing expense” continues the greater the chances of you building a cash reserve. It also gives you additional time to seek and obtain affordable housing that is to your liking.

Even if a loan modification is granted always be sure to read the fine print before accepting any terms.

Most simply lower your monthly payment but do not reduce how much you owe. You simply owe it for more years than before. Very often you end up paying even more for the loan. If your house is worth half of what you owe then owing even more money on your note benefits you very little.

Remember  that,  by our best projections, the market has not finished falling. When the bottom is reached it will possibly be decades before property values double thereby making the value of the home equal to what you currently owe on it.  There is little or no benefit to the homeowner to continue paying on such a loan especially when one considers that we are living in the worst economic times in the past 50 years. If you let the property and its debt go to foreclosure or short sale you will instantly be much better off financially and will have much less deadly stress in your life.

You also must consider the effects of the debt that the lenders try to leave you with in a foreclosure or short sale and the tax consequences of such transactions.

Almost all of our clients have little or no tax liability and fewer and fewer have any debt left owing after the foreclosure or short sale. Your situation will be unique so you must seek answers from the appropriate professional to get answers to your specific questions.

Ask your CPA or Tax Attorney for answers to your specific questions.

Once you go through the loan modification process and discover that it offers no real relief you can then consider a short sale which will prolong the foreclosure process for weeks or months more. Under the Federal HAFA short sale program one of the key components is that the debt is forgiven so you will have no debt owed to the lender after the short sale is complete.

Allowing the house to go to foreclosure leaves this possibility to chance.

At this point it is unwise, and probably not possible, to proceed without professional real estate help.

Three key points need to be kept in mind at this point.

1.The finer points of real estate transactions are fairly complex.

2.Most lenders still require that your property be listed for sale before considering s short sale.

3.The best possible real estate professionals in any area of the country can be hired on your behalf without cost to you and the lender will have to pay them even though they represent you.

If these three things are not enough to convince you of the wisdom in obtaining professional help at this point in the process then try it on your own for awhile. You can decide later whether the time you are spending is saving you money or actually costing you more than your perceived savings.

To find a highly skilled professional  anywhere in the US at no cost to you

Call  916 454 5400