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“THE CONSUMER’S GUIDE TO THE FORECLOSURE PROCESS”

Read this guide and you’ll discover:

  • How to Avoid 4 Foreclosure Traps.
  • Misconceptions about Attorneys, Mortgage Brokers and Lenders
  • The 6 Mistakes when Working with Attorneys, Mortgage Brokers and Lenders
  • Why you Do want to Stop the Foreclosure
  • How Stopping Your Foreclosure can Give You Better Than Normal Credit
  • 4 Steps to a Proactive Positive Future

Provided as an educational service and not intended as legal advice

Dear Debtor,

Finding a solution for your situation is not easy.

Why? Because you’re bombarded with confusing Foreclosure litigation, misleading advertising, confusing claims, and simply bad information. Starting with Realtors and Attorneys, who have outrageous, unaffordable commissions and hourly rates to flakey Mortgage Brokers promising loans they will never get, and your lender who is unwilling to work out an affordable payment plan. How do you ever find a positive solution to stopping the foreclosure?

You start by reading this consumer’s guide. In this fact filled booklet, you’ll discover How to Avoid The 4 Biggest Foreclosure Traps, The 4 Misconceptions about Foreclosure, 6 Mistakes to Avoid when seeking Foreclosure Help, How being in Foreclosure, then stopping it., can possibly give you better than normal credit and 4 Steps to a Positive, Proactive Solution.

This guide will help you better understand the foreclosure process. Now, with this information, you can make an informed, intelligent, and confident decision.

If you would like to listen to an audio recording of this Consumer Awareness Guide call


THE 4 FORECLOSURE TRAPS

TRAP #1: THE FOREBEARANCE TRAP (Lender payment plan)
Forbearance is not a good solution for debtors in foreclosure, although the lender would like you to think so. The lender knows that over 85% of debtors that do forbearance do not make the 2nd payment. The lender also knows that the debtor can’t afford the current payments. So, why are they going to drastically increase your payments and expect you to be able to afford them?

Make sure you know how much you can afford comfortably each month before you commit yourself to forbearance.

TRAP #2: THE MORTGAGE BROKER TIME TRAP
First of all, it is very common for someone to go into foreclosure because of the false promises of a Mortgage Broker. Mortgage Brokers make money through points, which are a percentage of the loan and closing costs. However, if the house goes to foreclosure they don’t lose any money. Understand that a Mortgage Broker is just a Middle Man; they don’t make the final decision. Mortgage Brokers are at the mercy of the banks/lenders, which is why they always have many deals going, hoping one of them actually goes through.

TRAP #3: THE DENIAL TRAP
Today foreclosures are on the rise. The most common reasons why a debtor will find themselves in foreclosure are: The false promises of a Mortgage Broker, Divorce, Medical Problems, Job Loss, Adjustable Rate Mortgages or a Tragic Event.

Any of these events followed with foreclosure can leave a debtor distressed and many times depressed, in a state of mind where they are in denial. It is imperative that you realize that you do have options and the power to stop the foreclosure and get a fresh start. Remember that time is your worst enemy.

TRAP #4: THE BIG CHAPTER 13 BANKRUPTCY TRAP
Attorneys will advise you to file a Chapter 13 Bankruptcy and charge you $1000’s (thousands) of dollars to do so. They do this knowing that more than 2/3 of their clients still lose the house to Foreclosure. Did you know that a Bankruptcy is only a temporary solution? Yes, the Federal Courts protect you from the Creditors temporarily. Then a payment plan is worked out with Attorney’s Fees, Court Fees, Late Fees, and then, arrears are factored in. This is a type of Forced Forbearance. Once this payment plan is established you must make the payments or you will lose the house. So, before you quickly go file bankruptcy, under the advice of an Attorney, make sure that you plan your budget and know how much the costs are going to be. If you won’t be able to afford the new Bankruptcy monthly payments you might want to reconsider giving the Attorney $1000’s of dollars to do something that won’t work. Also, remember that Bankruptcy is public record, and everyone will see that you filed Bankruptcy, so you might want to make Bankruptcy your very last option.


5 MISCONCEPTIONS ABOUT ATTORNEYS, REALTORS, AND MORTGAGE LENDERS

Misconception #1: “The bank said that I can do a DEED in LIEU and not have a Foreclosure on my record.”
This is probably one of the worst things you can do in your situation. When the Lender asks you to do this, they are asking you to voluntarily Foreclose. Don’t let the Lender fool you, your credit report and personal record will clearly read DEED IN LIEU in other words a VOLUNTARY FORECLOSURE. A DEED in LIEU is not for your benefit, it is for the lender’s benefit, it eliminates the cost of them having to formally Foreclose, but you still lose the house and have your credit record permanently scarred.

Misconception #2: “The Lender told me I can work out an affordable payment plan”.
Sometimes Lenders will work out a payment plan called forbearance, but it is never reasonable and your payments will increase significantly. If you can’t afford your payments now, how does the lender expect you to pay hundreds or sometimes thousands of extra dollars, each month in your monthly payments? Statistics show that approximately 85% of homeowners in Foreclosure do not make the second payment with a forbearance plan.

Misconception #3: “The Lender won’t kick me out because my husband and I have medical disabilities and 6 kids living in the house”.
The sad unfortunate truth is that the lender only cares about collecting their debt no matter what your situation is. The harsh reality is that once the house goes to Foreclosure, in most states, the sheriff will show up at the house and order you and your family to vacate the property immediately.

Misconception #4: “An Attorney told me all I have to do is file CH 13 BANKRUPTCY to stop the Foreclosure”.
Yes, a CHAPTER 13 temporarily stalls the foreclosure proceedings; however it is only a Temporary Solution!! Attorney’s fees of up to $1,500.00 or more, appearances in court and the humiliation of public record showing you filed Bankruptcy. Remember that after you file Bankruptcy you are required to resume payments on the house, plus all arrears or you will still lose the house.

Well, we hope we cleared up any misconceptions you may have had about the Foreclosure process. Also, be sure to ask these 5 questions and listen carefully to your own answers:

  1. Is filing Chapter 13 Bankruptcy going to make the Foreclosure go away forever or will I have to pay to keep the house?
  2. Can I really afford the significant increase in payments through forbearance or payment plan?
  3. Should I wait until the sheriff shows up and orders me and my family to vacate the house or should I do something about the situation now?
  4. How much money can I comfortably afford in monthly payments?
  5. How can I get out of this situation without having to pay thousands of dollars in Attorney’s fees, Realtor Commissions and Closing Costs?

6 MISTAKES TO AVOID

MISTAKE #1: Choosing to spend thousands of dollars to have an Attorney file Bankruptcy based on the assumption that it will make the Foreclosure go away.
Many debtors will spend everything they have on an Attorney to file Bankruptcy only to lose the house. All they have done is paid thousands of dollars in Attorney’s fees, when they could have kept their money and had the same result. Know the bottom line of what this will cost and what your new increased monthly payment will be before filing Bankruptcy. (This is not Legal Advice)

MISTAKE #2: Choosing to spend every last penny by agreeing to a forbearance (payment plan), that the Lender told you to do.
Increasing your monthly payments isn’t going to solve your problem. You are here because the payments were unaffordable in the first place. A Lender will increase your monthly payment through forbearance knowing that more than 85% of the people will not make the 2nd payment. The Lender is just trying to get every last penny before they follow through with the Foreclosure proceedings. Make sure you know your budget and what you can afford before agreeing to forbearance. Also, have the Lender fax you in writing what your payments will be.

MISTAKE #3: Choosing to sign a Deed in Lieu of Foreclosure with the Lender.
The Lender will ask you to do this leading you to believe that it is in your best interests. But the reality is that it is in their best interests. Don’t make this mistake because your public record will clearly read DEED IN LIEU in other words a VOLUNTARY FORECLOSURE. This is just as bad as a FORECLOSURE. This is of no benefit to you and completely eliminates your credit options and your ability to take control of the situation.

MISTAKE #4 Choosing to wait until the last minute to do something about your situation.
Time is your worst enemy and the clock is ticking. People wait because they are in denial, due to distress or sometimes depression. Waiting too long will leave you with little or no options to take control of your situation. Explore your options now and make an educated decision on what is best for you.

MISTAKE #5: Choosing to count on a Mortgage Broker’s promise to get you a loan.
A Mortgage Broker has nothing to lose if the house goes to foreclosure. They are the Middle Man and are at the mercy of a lender who they report to. If you are absolutely confident in your Mortgage Broker, make him/her commit a deadline to you in writing. Also, be sure you know ahead of time if the new monthly payments will be affordable for you.

MISTAKE #6: Choosing to listen to the poor advice of an Attorney, friends, or family, telling you not to act on an option that is good for you.
For example: Many sellers decide that the best solution is to sell the house, stop foreclosure, and put the problem behind them and make a fresh start. The Attorney, friend, or family relative will advise them not to do this, without offering a solution they are willing to provide to stop the Foreclosure. Remember this is about you and no one else. Make sure that you make an educated decision that works best for you.


HOW STOPPING YOUR FORECLOSURE CAN GIVE YOU BETTER THAN NORMAL CREDIT

Everyone is obviously worried about their future credit after a possible Foreclosure. If you are in Texas, Georgia, Alabama, Tennessee, Virginia and Missouri ….there will not be a “Foreclosure on your credit record until after the Trustee sale by the lender. In all other states this formal “Foreclosure” takes place at the court hearing where the Judge grants the plaintiff (the lender) the foreclosure. Until this takes place you are in Pre-Foreclosure. This means that you are in the process of Foreclosure, but you do not have it on your permanent credit record yet.

At this point your credit record will show late payments, derogatory, on your mortgage such as:

  • 90 days past due 2 times
  • 60 days past due 3 times
  • 30 days past due 4 times

This is not good however; this is vastly different from a “Foreclosure” on your credit report. Working with an investor who is willing to negotiate with the Lender, Attorneys, and Courts to get the house sold by various means and thus “Paid Off” before it becomes a full “Foreclosure” is generally the best way to protect your credit.

Many people in your position would like to refinance. This is possible only if you already have a substantial amount of equity in the house. In other words, if the house is worth substantially more than you owe on it.

Example:
Value: $200,000.00, Amount owed: $120,000.00, Equity = $ 80,000.00 
This is a 60% Loan-to-Value (LTV), or $120,000.00 is 60% of the $200,000.00 value.

In this case there are lenders who will give a mortgage loan on a house based on the LTV only. They do not care about credit or any other factor other than the house. This does sound good until you find out that these lenders generally charge 3 to 7% of the loan amount in upfront fees and 10 – 14% annual interest. Also your payments are likely to increase significantly, this can be a quick, temporary fix for some people however; most homes do not qualify due to the LTV and when they do, the payments on such a loan are usually 1 ½ to 2 times the amount of the current payments.

Some will tell you that you can refinance with a conventional lender. The problem here is that when you are currently in the foreclosure process conventional lenders will not give any type of loan due to the credit record and payment record on the house. This whole idea of a refinance is somewhat the same as you having a car repossessed today by Ford Motor Credit Corp. Then this afternoon you walk into a Ford dealer and try to purchase a new car through Ford Motor credit, it is not going to happen. This is the same concept at play here. You are asking a lender to loan you money to pay another lender who is foreclosing on your current loan. It is not going to happen.

The good news here is that by working with an experienced, reputable investor you can potentially minimize the scar on your credit record. When a future lender looks at your credit they will see those late payments as described above however; since that time you sold the house and got rid of that debt which you could not afford, then you kept the payments on your other debts up to date. They actually may look at you as a better credit risk than someone with a 700 FICO score. The reason for this is that the person with the high credit score may never have had any financial problems. Lenders realize that financial situations happen to good people. They will look at this situation and wonder what will happen to the person with the high credit score if they ever have financial problems. Will they run and hide or work to fix the problem. Who knows?

With you they will see that you had these financial problems but instead of running or sticking you head in the sand, you stood up, did everything you could preemptively to fix the situation and then continued to keep on a right path. This many times makes you a better credit risk that the other person.

So... this is not the end of the world or of your credit worthiness. If you work properly to fix the situation you can turn it into a future positive. Nothing will make it just “Go away” but you are on the best path.


WHY YOU WANT TO AVOID FORECLOSURE

Which is more important to you? Being in control of your life and making your own decisions or allowing someone else that you don’t know to call the shots for you.

Each Foreclosure situation has its own unique advantages and disadvantages. Some solutions will only stall the Foreclosure forcing you to ultimately pay thousands of dollars and lose the house in the end anyway. Other solutions may allow you to stay in the house, but cost you more money each month than you actually make in three months. There is a solution that can stop the Foreclosure, possibly put cash in your pocket, and give you a fresh start in a new home. This option would require you to move out of the house that is in Foreclosure and move into a better situation.

If what you are looking for is a quick expensive band aid to put on the situation to fix it temporarily, than I respectfully request you call another company.

But, if you would like to Avoid the Foreclosure and put an end to the nightmare permanently, if you would like to dodge having to pay money and payments you can’t afford, avoid the humiliation of public record and create a positive experience, then you are invited to call me.

Our ability to come in and stop the Foreclosure through extensive negotiations with attorneys and lenders to buy the house with no cost to you is the best way to solve your problem. Yes, by doing this it can cost us (not you) more money up front, and create a greater financial risk for us (not you), but we have found that the number of families lives that have been changed by using our method to stop the Foreclosure has made it well worth it.


4 STEPS TO A PROACTIVE, POSITIVE SOLUTION!

If you are thinking about making a Proactive, Positive Solution, we encourage you to follow these 4 steps:

STEP #1: Make a commitment to yourself to be a proactive, take control and stop Foreclosure. The longer you wait, the harder it will be to find a solution.

STEP #2: List your objectives. Do you want to take control of your situation?
Do you want to pay an Attorney $1000’s of dollars for a temporary fix that you can do on your own, or do you want to permanently solve this Foreclosure problem and put it behind you so you can move on.

STEP #3: ASK QUESTIONS.
The way to learn about the best solution for you, is by asking specific questions and listen carefully to the answers. Here are several questions to ask a Mortgage Broker, Attorney, Realtor, or the Lender who is Foreclosing on you:

MORTGAGE BROKER:

  1. What is my guarantee that you will close my loan before it goes to Foreclosure at the court steps?
  2. Will you commit to me in writing?
  3. What interest rate are you getting me?
  4. How many points are you charging me?
  5. Will my monthly payments be more than what they are now?
  6. What are the total closing costs?

ATTORNEY:

  1. Will filing Bankruptcy make the Foreclosure go away, or is it a temporary fix?
  2. How much do you charge to file Bankruptcy?
  3. How much will my new monthly payments be?
  4. What happens if I can’t afford the payments?
  5. Can I file a Bankruptcy myself at the courthouse and save thousands of dollars?

REALTOR:

  1. What is your guarantee that you will sell the house and close before it goes to Foreclosure at the court steps?
  2. What if I find someone on my own who wants to buy the house, do I still have to pay you a commission?
  3. If the house is sold at a price that won’t cover all of your commissions, do I still have to come out of pocket and pay you?
  4. What happens to you if you don’t sell the house and I lose it to Foreclosure at the court steps?
  5. Are you only going to sell the house at a price for you to receive full commission?
  6. How long will your listing contract tie up the house and entitle you to a commission?

THE FORECLOSING LENDER:

  1. Can you work out a payment plan (forbearance) with me?
  2. Will my monthly payments increase?
  3. How much will they increase?
  4. Will you show in writing the terms of the forbearance plan you’re suggesting?
  5. If I agree to these terms, will you agree in writing to stop the Foreclosure?
  6. What happens if I’m late on this payment plan?
  7. Do you start where you left off with the Foreclosure?
  8. With the significant increase in monthly payments, what percentages of people end up back in Foreclosure because they cannot afford the monthly payment?
  9. How many people still go to Foreclosure after working out forbearance?

STEP # 4: Once you’re ready to make an informed intelligent decision act on it immediately, before it’s too late. Remember time is your worst enemy.
The purpose of these four steps is to empower you with the information and questions you need to make a wise decision in choosing the best solution for you. If you only want a temporary fix then you should call one of the people listed in step # 3. Just do something before it’s too late.

But if you want to be proactive, solve your problem and move toward a better future, then we invite you to take action and call us now.

We specialize in this area and we will be happy to answer your questions and concerns and give you a FREE FORECLOSURE AUDIT – without cost or obligation of any kind.

To reach us, call (877) 842-8708.


We are glad you’ve reviewed our Consumer’s Guide to Foreclosure. We hope you found this very informative and helpful.

If you have any questions or comments or if you would like a FREE FORECLOSURE AUDIT – Call us at (877) 842-8708.

We have dedicated our business to Consumer Education and Service and pride ourselves on the ability to help create positive changes in people’s lives. We’ll be pleased to help you in every way!

We look forward to working with you.

Best Wishes,
Julie Palabay Goldberg
Foreclosure Prevention Professional
Proud Member of the NAFPP
National Association of Foreclosure Prevention Professionals
(www.NAFPP.org)