Distressed Properties

Are you in need of professional help or do you know someone struggling or underwater on their payments?

As you know, the COVID pandemic and economic recession has left many homeowners in a challenging financial position. Navigating the foreclosure process can prove stressful, and identifying alternatives to foreclosure is tricky.  Facing foreclosure can be a difficult and overwhelming time in a person’s life. Most mortgage defaults occur when a significant life event takes place;

• Job loss / unexpected unemployment
• Sudden illness or medical emergency
• Disability
• Death in the family
• Divorce / loss of second income
• Excessive debt obligations
• Mortgage adjustment

This current residential market is very different than the 2007 residential market.  Many homeowners who are experiencing financial difficulties have “substantial equity” in their homes.  That equity belongs in your pocket not your lenders.  

Often the home owner has been getting advice from friends, relatives and untrained agents that could be counterproductive and possibly outright false (I should write a book on some of the things that I have heard people tell homeowners). Some home owners believe that any real estate agent is qualified or experienced to do a short-sale only to find out too late their mistake.  Many real estate agents turn over short sales to title companies to facilitate. The State of Colorado (DORA) allows real estate agents to negotiate short sales and title companies to facilitate (process paperwork) short sales for homeowners. Once again only too late the home owner finds out a little too late that no one was looking out for their best interests.

As a Distressed Property Expert I have extensive training to help you make the right decisions for your future. I have completed;

• Certified Distressed Property Expert Designation (CDPE)
• Certified Home Rescue Expert Designation (CHRE)
• Accredited Short-Sale Negotiator (ASN)
• Citibank Accreditation
• RENAV
• Colorado NED-Foreclosure

I have counseled many homeowners concerning loan modifications, short sales, deed-in-lieu and foreclosure. I am recognized short sale agent with numerous lenders including; Chase, Wells Fargo, Bank of America, Citibank and others.

My goal is to identify if a homeowner can or should stay in their home or help them with a dignified exit. I do not charge an upfront fee now or later to the homeowner. Most importantly all communications are strictly confidential.

Time is a factor and the lenders clock is ticking. Let us know if we can help.

What Are My Options?

Forbearance

The goal of mortgage loan forbearance is to help you get your home loan payments — including tax and insurance escrow or impound accounts — reduced or suspended for a set period of time, if you are suffering from a temporary financial hardship. This option lets you deal with your short-term financial problems by giving you time to get back on your feet and bring your mortgage current.

Eligibility and Facts

• You are experiencing a financial hardship such as reduced income, medical expenses or divorce. You are facing a temporary financial hardship such as a loss of income due to a medical illness, death of a co-borrower, natural disaster or unemployment, and the circumstances you are experiencing have a clear end in sight. For example, if you are unable to live in your home because of a flood and you are waiting for an insurance payment to cover the costs of additional living expenses, like staying in a hotel, that’s one situation where forbearance may be an option.
• If you receive forbearance assistance, when your situation improves, you’ll be required to repay (bring current) the past due amount from the unpaid months of your monthly housing payment (principal, interest, taxes and insurance).

Deed in Lieu

A deed in lieu of foreclosure, or deed in lieu, is where you sign the deed back to the lender in order to avoid foreclosure.

Eligibility and Facts

• You are experiencing a financial hardship such as reduced income, medical expenses or divorce.
• You are unable to afford your current mortgage payment.
• You are unable to modify your current mortgage to make affordable.
• You have no second mortgages, additional liens or judgments.
• Some lenders require that you have tried for at least 90-120 days to sell your property with the help of a licensed real estate agent.
• Some lenders will assist you with relocation expenses (always ask).
• Lenders may or may not dismiss the deficiency (always verify and ask for this in writing).
• A 1099 will be issued to the IRS for the deficiency balance. See Debt Relief Act Below.

Loan Modification

A loan modification is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment. With a loan modification, the lender may agree to reduce the interest rate, convert from a variable interest rate to a fixed interest rate, or extend the length or the term of the loan.   Fannie Mae, Freddie Mac, VA, FHA, USDA, HAFA, Military and Traditional each have their own qualification process for a modification. The best thing about a loan modification for the homeowner is that they will be able to remain in their home.

Eligibility and Facts

• Show that you cannot make your current mortgage payment due to a financial hardship.
• Complete a trial period to demonstrate you can afford the new monthly amount.
• Provide all required documentation to the lender for evaluation; financial statement, proof of income, most recent tax returns, bank statements and a hardship letter.

Short Sale

In an approved short sale, your mortgage lender agrees to accept less than is owed for the property. Many lenders (banks) may be willing to do this because it spares a lot of hassle and expense involved in selling the property following a foreclosure. There are many different type of short sales; Fannie Mae, Freddie Mac, VA, FHA, USDA, HAFA, Co-op and Traditional. Even more difficult is that each lender and type of loan has their own short sale process.   Most importantly, a short sale does far less damage to the homeowner’s credit than a foreclosure and you have a far better chance of having a deficiency balance dismissed or forgiven.  Short sales require large amounts of paperwork and documentation that the homeowner must be prepared to supply at a moment’s notice.

Eligibility and Facts

• You are experiencing a financial hardship such as reduced income, medical expenses or divorce.
• You are unable to afford your current mortgage payment.
• You are unable to modify your current mortgage to make affordable.
• You do not wish to keep the home.
• Paperwork and documentation is required and at times can seem endless.
• Average short-sale timeframe from contract to close is 3-6 months.
• Patience and cooperation is required and pays of in the end.
• Any second mortgages, additional liens or judgments will also be negotiated in the short-sale.
• Lenders may ask you to contribute to the deficiency (usually can be negotiated).
• Many lenders will assist you with relocation expenses (always ask).
• Lenders may or may not dismiss the deficiency (always verify and ask for this in writing).
• A 1099 will be issued to the IRS for the deficiency balance. See Debt Relief Act Below.

Refinance

Common goals of refinancing your home loan are to help make your monthly mortgage payments more affordable by refinancing to a lower interest rate or switching from an adjustable-rate into a fixed-rate loan. Usually this is not an option for distressed properties or anyone that has multiple late payments. However, always consult with a lender to know your options. Or call and explain your situation and we will give you the names of our top three lenders to consult with.

Eligibility and Facts

• Must be current on your home loan payments
• You have equity in your home for most loans. (Lender determination of equity amount)
• You will also need to meet other criteria such as credit, loan to value and debt to income ratiorequirements.
• Foreclosure

What is foreclosure?  Foreclosure is the process by which a homeowner’s rights to a property are forfeited because they failed to pay the mortgage. If the owner cannot pay off the outstanding debt or settle through short sale, deed in lieu, the property is foreclosed upon. This process is a legal process and varies somewhat from state to state.

What is cash for keys?

Cash for keys is a term used by lenders to get an easy solution to get occupancy to a home quickly and hopefully with as little damage as possible. This usually is available to the homeowner that has been foreclosed upon, but occasionally to a tenant or squatter. Usually what occurs is that a real estate agent shows up with an agreement for the occupant to sign agreeing to vacate by a certain date, remove their personal items and leave the property in good condition. In return the real estate agent is authorized to release a check to them for doing so. In extreme cases the homeowner may be able to receive money for relocation, movers and hotels. This helps the lender avoid the expense of eviction and damage to the property.

COLORADO FORECLOSURE PREVENTION HOTLINE OPERATED IN COOPERATION WITH THE COLORADO DIVISION OF HOUSING AT 1-877-601-4673 OR THE HUD HOUSING COUNSELING AND REFERRAL LINE AT 1-800-569-4287

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