Seven Ways To Avoid Foreclosure

DRA Special Report: Seven Ways To Avoid Foreclosure (Special Report: 7 Ways To Avoid Foreclosure)

Special Report: 7 Ways To Avoid Foreclosure

Dear Prospective Seller ,

Through no fault of your own, you may be facing one of the greatest challenges of your
life—how to prevent your home from being foreclosed upon.
If you can avoid it, why let the bank take your most valued asset and leave you with
nothing? Fortunately, there are several viable alternatives, listed here are the most
common. If you want more information about these alternatives, we can help.

Just know, every situation is different, so we may identify a different path for you during our FREE Consultation. You can……………
1. Refinance; (assuming you still have good credit)
2. Bring your mortgage current; (commonly referred to as a reinstatement)
3. Create a “workout” with the bank; (the equivalent of a loan modification)
4. Declare bankruptcy; (Chapter 7 or Chapter 13 depending on other debt factors)
5. Rent or Lease Option your home
6. Create “shared equity” or let us take over payments
7. Transfer title; and
8. Sell the property quickly. (assuming your home is in good repair)

Let’s discuss each option—what it is, and the pros and cons of using each one:
1. Refinance
In today’s marketplace, there are many different types of financial institutions that lend
money. Although you may not be able to refinance with your local bank due to your
current situation, there are many mortgage companies and lenders who specialize in
creative financing solutions. That’s how they can compete with the big banks. They are
often able to review your situation and find a solution to your needs.
It is true that the loan you get will probably have a higher interest rate than a regular loan.
But if you have a good amount of equity in your property, the ability to refinance will
most likely be a good option that’s available to you.
We would be happy to recommend one or more quality mortgage brokers who may be
able to help you in your situation.

2. Bring your mortgage current
I know what you are thinking: “If I could bring my mortgage current, I wouldn’t be in
this situation!” That may be true, but have you investigated every possible way that you
may be able to get the funds?
Can you borrow it from a friend, family member or co-worker? Can you sell something?
Does your employer have any hardship loan programs? Brainstorm with family members
or close friends. The more you think about it, the more likely it is that someone will
remember or come across a solution.

3. Create a workout with the lender
The lender does not want to foreclose. That’s because lenders are in the business of
having their money at work in loans, and not sitting in a property they have taken back
through foreclosure. Not only is that a black mark on the lending institution, but it hurts
their financial picture as well.
Therefore, in many instances lenders are willing to do “workouts”. What this means is
that they are willing to work out the back payments that are owed, until you become
current again.
A typical workout would be the lender taking the full amount of your back payments and
dividing that number by 12 or 24. They would then add that amount to your current
payments, until you are paid off.
When considering a workout, you’ve got to be able to make that extra payment each
month or you will be right back where you started—in the foreclosure process for the
second time. At that point, the bank will not look very favorably upon your situation.
It’s best to work with a workout specialist…someone who has done workouts before and
knows the “ins and outs” of the lending business.
We at Results Home Buyers offer workout services free of charge.

4. Declare bankruptcy
Declaring bankruptcy is viable option to being foreclosed upon, but it should be used
only as a last resort. Also, use it only if you know that you will be able to keep up with
the future loan payments. Otherwise you’re just postponing the inevitable, and the longer
you wait, the less money you will walk away with from your property.
A bankruptcy will be reported on your credit report for seven years. The bankruptcy will
also be reported in the financial section of the newspaper—it’s a requirement from the
bankruptcy court.

Declaring bankruptcy is also costly. When declaring bankruptcy you will have the option
to declare either Chapter 7, 11 or 13 bankruptcy. These refer to different parts of the
bankruptcy law, and relate to whether you are somewhat in debt and need to renegotiate
with lenders, or whether you truly are going to walk away from your debts. However, be
warned that because you can only declare bankruptcy every years, certain future debts
might not be eligible for even bankruptcy protection.
The point is that bankruptcy should be your route of last resort. If you truly have no other
alternative, call us and we will give you the names of two or three reputable bankruptcy
attorneys.

5. Create shared equity
To create shared equity, you borrow the money from an investor, in order to make up
your back payments. In return for bringing your loan current, you give the investor a
certain portion of the equity in your property. You are giving up part ownership, in return
for keeping part ownership: That beats giving the whole thing over to your lender.
Of the seven methods to avoid foreclosure, this is the most difficult to accomplish,
because there are not many investors who are willing to risk money (the back payments)
on an individual who has a history of not paying.

6. Transfer title
This is a form of property sale. It’s called a “subject to” transaction. An investor offers to
make up your back payments and take over your property, subject to the existing
mortgage.
The title of the property goes into the buyer’s name, though the mortgage stays in your
name until the loan is paid off. This could take as little as thirty days, or as long as three
years.
You may ask, “How do I know the investor will make the payments?” The answer is
quite simple: He has just made up all of your back payments; he now has a financial stake
in the property. It only makes sense that he makes your payments to protect his
investment.

This type of sale is becoming quite common. The benefits to you:
• You don’t have a foreclosure on your record;
• You may get some cash immediately to start fresh;
• You immediately solve your looming foreclosure; and
• Your credit gets build back up through no effort of your own, because the investor
makes up your back payments and begins making your monthly mortgage
payments on time every month.

Before long, your credit score is once again in good standing.
You should look for an investor who’s experienced in this type of solution, and who is a
member in good standing with the Better Business Bureau.
Easy Home Buyers has performed many “subject to” transactions. Call us to discuss the
possibility of doing one with you.

7. Sell your property quickly

Sometimes people just want to walk away from a bad situation, and leave everything that
reminds them of that situation behind. In this case, you sell your property outright, collect
any equity that you have in the property and start over again.
One great thing about time is its ability to heal wounds. Yes, things may be bad now, but
as Johnny Cash always said, “This too shall pass”. It may be time to face what is
happening, and act in your best interest right now for a better tomorrow.
You can sell your property through a real estate agent or directly to an investor. Selling
directly to an investor will save you the commission that you would pay to a real estate
agent and more importantly will save you time.
A real estate agent sometimes takes three to six months to find you a buyer. If for some
reason that buyer cannot get financing or close on the property, you might be left in a real
bind. The three to six months that a real estate agent may take to find a buyer could be longer
than you can afford. That’s because once your lender has set a date for the foreclosure, it
will foreclose on that date, regardless of whether your buyer needs more time.
In many situations, investors like me can pay cash and can close within seven days.
Results Home Buyers has a reserve of cash ready to offer homeowners who are looking
for a solution to their foreclosure problem.