We offer the consumer three major services:
1. Loan Modification
2. Deed in lieu of Foreclosure
3. Short Sale Negotiations
- Loan Modification
With the increase of interest rates on home loans, many homeowners with adjustable rate loans are faced with mortgage payments they can no longer afford.
Our job is to convince the current lender that it is better to lower the homeowner’s payment by lowering the interest rate or payment rate by creating a payment plan the borrower can afford, rather than to take the home with a foreclosure sale and lose money on the re-sale. Keep in mind, lenders lose money on bank owned properties as it will sell for less than market value, and they must pay a commission to a Realtor; and closing costs plus the cost of holding the property while they wait for a sale in a market that is depreciating.
We need to prove to the lender what the maximum payment is that borrower can afford by constructing a financial plan for the homeowner that the lender will approve.
Also, as the homeowner is often late with their payments and in foreclosure or soon to be in foreclosure, we need to ask the lender to take the delinquent payments and either forgive them entirely or place them on the back of the loan.
A rate reduction in most cases is the only possibility for a homeowner to retain their home –our fee is a risk that each homeowner must weight. Note: Our success rate on a workout program with a rate reduction is 98%.
Note: If we can prove you owe more that the value of the property and there is a second loan, we can convince that second lender to take a major reduction –of 50% to 80% — off the balance of the loan.
2. Deed in Lieu of Foreclosure
Under many conditions lenders will accept the property back from the borrower as full payment in order to save the time and expense of going through the foreclosure process.
Our job is to convince the lender it’s in their best interest to accept the property as payment in full.
This is not a simple plan as we must provide the lender with a complex detailed analysis of current value of the property –and future value. Then we must prove that the borrower cannot afford to make payment or sell the home any time soon or at all.
Note: a deed in lieu will also prevent the lender from filing a 1099 on their loss which is regular income to the borrower.
3. Short Sale Negotiations
We realize there is a large demand for this service and doesn’t seem to be very many companies that know what a Short Sale is, much less how to work with lenders to negotiate a Short Sale. Here is what we know:
· There is a right way to put together a Short Sale offer so a lender can justify settling for your offer. But most offers are badly done and leave a lot of cash on the lender’s table.
· While most Short Sales are on residential properties, they can be, and are, completed on commercial properties that are also in troubled areas.
Why would a lender allow the property to be sold and accept a loan payoff that is far less than the amount of the home loan and not come after the homeowner for the losses? Simple: to save time and money.
Here is what we do –we ask the investor to complete a very detailed list of information on the property and area, we review that information with the investor and create a plan to purchase.
We make a proposal to the lender using what we call the poison pill approach,
“Keep in mind it’s a lot less work and risk for the lender to take our offer.” The Department Manager of the lender will use our proposal to justify the sale price and protect his job.
For more information, visit www.AForeclosurePro.com
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