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6/5/2009
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Content-Location: file:///C:/1E73A0B4/HouseworthlessthenDebt_files/master15.xml
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If
your House is worth less than you owe
on it and you can’t afford to make
the payments.
What are your options?
Options
Available When you can’t afford
to Make the Payments
![](3D"slide0004_image002.gif")
•Deed property to lender in exchange for debt
•Property sold to existing owner & existing Lender agrees to settle for less <=
/span>than full repayment of loan.
Loan Modification Process
•E=
ligibility
–S=
uffered
hardship causing inability to continue paying at current rate
<=
/span>
•Examples: Adjustable Rate Mortgage Reset- Payment
Shock (uncommon, but we will see more lenders accept this in the future) , Illness , Los=
s of
Job , Reduced Income , Failed Business , Job Relocation , Death of Spouse or Co-Borrower , Deat=
h ,
Incarceration , Divorce , Marital Separation
, Military Duty , Reduced Income , Medical Bills , & Damage to Property
(natural disaster or
unnatural).
•C=
an't
qualify for a new loan on more affordable terms
•Must prove=
to
lender you financially can afford to make the payments on better terms. Can’t be asset
rich.
–B=
ank
will focus on your DTI (Debt –To-Income Ratio)
–T=
he
order of modification is as follows:
1.Lower interes=
t rate
to as low as 2%,
2.Extend amortization to 40 yrs,
=
3.Finally consider forgiving debt.
•T=
he
lender will ask to see all monthly expenses to arrive at their decision.
Short Sale Process
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Prove
Hardship
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Market the
property
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Find 3rd=
party buyer
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Submit
offer(s)
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Negotiate=
with
Bank(s)
<=
span
class=3DBB style=3D'position:absolute;left:-4.29%'>•Buyer doe=
s due
diligence upon approval
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Close Esc=
row
Foreclosure Process
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Lender gi=
ves
Default notice
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Lender fi=
les
Notice of sale
•Auction a=
t court
house steps. Lender will publish minimum bid. Highest bid
wins.
<=
span
class=3DBB style=3D'position:absolute;left:-4.43%'>•Process t=
akes 4-8
months.=
What ty=
pe of
Debt do you have?
![](3D"slide0002_image004.gif")