If your property goes into default with your lender and they start a Foreclosure its critical that you understand your timeline and what it will take to bring your loan current.

Foreclosure is a legal proceeding and the requires that your TOTAL amount of payments that are behind including their Attorneys fees be paid in full or they can sell your home. Typically Lenders will not accept anything less then the total amount so it’s important you know exactly how much that is and how much time you have to pay it.

Your should immediately be in contact with your Lender to find this information out and see what options, if any, that they have to assist you.  Because this is not an absolute that they will assist you, it’s critical that you find out any other option that you have to resolve it yourself.

The best thing you can do in this situation is PREPARE FOR WORST CASE SCENARIOS. It doesn’t mean that it’s going to happen but knowing from this perspective allows you to cover all your bases including worst case scenarios.  The biggest mistake I see in these situations is that homeowners assume the bank will take care of them and it’s absolute that they will get help. They lose a lot of time and when the bank denies them they are stuck and left with little time and or resources to save their home.

PCC Real Estate Solutions will provide a FREE evaluation of your situation with no obligation to establish what are all your options to deal with your problem.  If you your interested or know anyone who could benefit from this please contact us immediately! 800-645-4158

I met an owner this week and she explained to me that she went through the Loan Modification process and got approved for a Loan Modification but her payment was only reduced $100. She had been laid off and had very limited funds so that kind of reduction wouldn’t do much for her. So she told the bank to foreclose and keep the house and packed up and left the home fairly quickly after that.

BofA waited almost a year before they placed the property in default and initiated a foreclosure process. I came into contact with her and quickly realized that although she was done with it all that she didn’t know how the bank would formally foreclose. She also didn’t have good resources of information before making a decision to walk away from the property. I explained to her that I got in contact with her because her property was finally in foreclosure and she was a few weeks away from the scheduled auction date. I could likely get her some money in exchange for the property before the sale if my estimation on the property were correct. She thought it was to good to be true. It wasn’t and she’s very excited about the deal we entered into.

It’s becoming a lot more common then you think for people to consider walking away from their home even with equity in their property.

Original owner had three children and three properties with over $1M in equity from all three houses combined.  Prior to her passing, while she was sick and on her death bed, her son created a living trust on behalf of his mother, that named him the Trustee to her estate and left him all three of her properties.  He was also able to get his mother to refinance one the three properties and pull out $300k in proceeds. Shortly after all this was completed she passed away.  The son never told his siblings of the trust or the refinancing and transferred the title to all three properties into his name soon after her passing.  About a year after her passing, he fell on hard times financially and couldn’t keep up with the mortgages on 2 of the houses that had mortgages.  One of those houses that he fell behind on the mortgage with, his sister lived in with their brother. Her mother had let her stay in that house as long as she paid for it and managed it like her own.  Which she did for many years. She eventually found out that the house went into foreclosure when I contacted her and informed her that a Notice of Default was recorded against that home.  She was shocked and outraged and told me about the other 2 houses her mother had.  Upon my further Investigation I found out that of the two other houses, one was free and clear and the other had already been lost to a foreclosure sale.

Our Solution:

I evaluated all the properties and how much was owed and their values. I quickly realized that the Brother who caused all the foreclosure had did a cash out refinance of the house the sister and brother lived and pulled out almost $300k.  The total value of the equity with that cash out refinance was about $900k. Which means that 1/3 of the estate had already been inherited by this brother.

What I proposed to the sister was to retain a couple of different attorneys to represent her and her brother in regards to her mothers Estate and the fraudulent activity we suspected of her brother.  I have very strong legal partners that I use regularly for Probate and Real Estate matters.  I would then communicate directly with her Brother to inform him of our suspicions and try to negotiate a peaceful transfer of the properties and the estate into her and her brother’s name.  By doing this, it would give his sister control of the remaining 2/3 of her Mother’s Estate to divide between her and her brother. Unfortunately, when the brother did the cash out refinance he encumbered the property his sister and brother lived in to a point that was unaffordable.  Which means they eventually would have to move out and lose that property as well.  However they would be able to fix up and sell her Mother’s free and clear home and recover some of what they lost in the property that was sold at a foreclosure sale.

PCC would finance all the attorney costs, negotiation with the brother, recovery of the remaining proceeds, rehabbing her Mothers free and clear home, relocation and moving costs and would form a Equity Partnership in the eventual sale of the last house remaining.

How your solution was successful:

We were able to convince the brother to transfer the Estate to the sister and brother. By doing so the Sister was able to form an Equity Partnership on the Rehabbing and sale of the remaining free and clear home. We rehabbed the home and sold it at full market value. We recovered the remaining proceeds from the house that was lost at a foreclosure sale. We assisted the sister and brother with all their moving and relocation needs including helping them secure a new permanent residence. The Mother’s Estate was eventually divided more equitably then before and the Sister and Brother had greater peace with how things turned out.

Mrs. Owner passed away with no will or trust.

Her Brother was helping her with property in her last days and got authorized on the Loan prior to her passing and pulled it out of Foreclosure at that time.  About 6 months later he passed away.  Since no one was authorized on the loan the bank would not communicate with anyone.  Brother’s wife was left with the responsibility of the property but was unable to speak with the lender about anything including the past due amounts and payoffs.  The property fell back into foreclosure and ultimately had a Trustee Sale date set for it.

Our Solution:

2 days before the Trustee Sale I got in contact with the Brother’s Wife who was now handling the property affairs.  I proposed that I would be able to negotiate with the lender and convince them to postpone the sale due to the fact that the Family didn’t want to lose the property or the equity it had in it.  This would allow the property to be properly set up for a sale with all the necessary documentation that the bank required.  It would require the property to go through a probate to name Brother’s Wife as the Administrator of the deceased sister in law’s Estate.  This would allow the bank to properly recognize her as the appointed responsible party to their loan.  This would allow her obtain reinstatement and payoff figures and be able to communicate with the bank.  My solution was to handle the negotiation with the Lender, arrange and pay for a Probate Attorney to handle their petition and Probate. Reinstate the defaulted loans once we were able to obtain the figures from the bank.  Arrange and Finance the Rehabilitation of the property to maximize the Equity Potential for the sale of the property.  Handle all administrative functions with the Lenders, Contractors, Attorneys, heirs and Brokers.  For doing this all we would form an Equity Partnership on the sale of the property.

How our solution was successful:

• We convinced the Lender to Postpone the Trustee Sale.
• We retained a trusted (Strategic Partner) Probate Attorney to prepare and file the Probate Petition on behalf of our client.
• Client obtain Letters of Administration with full Authority
• Organized 9 heirs in four different states in order to complete Probate
• Provided funds necessary to Rehabilitate the property
• Completed Rehabilitation of the property to increase the Equity Potential
• Listed the Property with a local Real Estate Broker and marketed in on the open market to obtain the highest price.
• Received multiple offers, which drove the price over asking.
• Property went into Escrow and closed.
• Obtained Court of approval for final accounting of the Estate.
• All 9 heirs and our client received their inheritance

Don’s home had a Notice of Default recorded at the end of July and I met with him last week.  This home was given to him when his parents passed away many years ago.  This home has been in his family over 50 years, so he has some very strong emotional attachments to this property.

As I sat with him a local diner it was very evident that the prospect of losing his family home was weighing heavely on him.  He has been struggling to make things work ever since he was laid off his print pressing job a few years ago.

After being laid off Don immediately applied for unemployment to help ends meet.  He was able to collect for over 2 years but it ended this past year.  While unemployed he ran into some medical issues that ultimately landed him in the hospital and off his feet for over 6 months.  This meant he couldn’t actively look for work.  He then used all his savings and the little retirement he had left.  All his savings and unemployment benefits ran out this year and he no longer could make payments on his house.

Fortunately he does have a pension that’s paying him 800$ a month.  However, his expenses including his mortgage is just over $2000 a month.  His mortgage is 933$ with an interest rate at just over 5%.

It’s not hard to recognize that he has no other option but to sell the house and salvage whatever he can of the equity that’s left.  However, the emotional attachment to this family home are preventing him from seeing things clearly and could risk him losing everything.

I was able to analyze his situation and financial picture to help him see that unless he wins the lottery or someone gives him the money he’s going to lose everything.  I wanted him to realize for himself that he could take control of his property and not allow the bank to dictate what’s going to happen.  It’s a hard thing to do to separate the emotion from something like this but it’s a must.  I wish more people had the ability to do so.  For Don it’s gonna come down to either the Bank selling his property or he’s going to.  The only way he maximizes his situation is if he does.

Will see what happens!

Last week I met with an older gentleman who had several properties in Default.  I connected with this homeowner by way of his ‘Tax Guy”, who’s been doing his taxes for many years.  We finally organized a meeting where all of us came together to discuss the state of all his properties.  Keep in mind that by the time I finally got them to commit to this meeting the main property was  a week away from a Trustee Sale.

I quickly identified that his income and expenses were the main problem.  He had approximately $5k in income coming in.  Income from 4 rentals and his SS income.  His expenses for all the properties and his personal expenses was about 11k.  He stopped paying the mortgages 2 years ago and survived by not paying and slow bleeding the properties.   His “Tax Guy” introduced him to a person couple years ago who was suppose to help him with Modifying his properties.  He charged him $4k a month to help him with his modification.  He had been denied modifications on all his properties and couldn’t figure out why.   He also found out in January that one of his properties was lost to Trustee Sale.  His leader, the “Tax Guy” had got him a guy who took advantage of him and charged him $4k/month for doing nothing.  He also cost him one property that he didn’t even know was foreclosed on.   That is not leadership!!

Once I understood his entire situation I was able to create a solution to salvage what he did have.  It would require selling one property but would net him about $50k.  He also had a shot at selling another property but that would take some work.

The “Tax Guy” had already laid out another strategy that he felt would be better for him and wouldn’t require selling any properties.  He would sue the lender that sold his property for illegally selling a home that they didn’t have the original note on.  And they would file a lawsuit against the other lenders that were trying to foreclose on his properties.  This plan would require a $10k retainer for the attorney to begin working.  And he would get this money from where??  This is the same guy that cost him one property and several thousands of dollars!

I concluded that if he losses all his properties, he would be left with no sale proceeds and would have to live on his $700/month SS income.  I explained to him that there was only one way out.  The homeowner deferred to his “Tax Guy” and this guy felt it was best for them to sue the lender and go that route.

Lets see what happens!

LA Times Article

I first spoke to this family in February when their NOD had just been filed.  I set an appointment to meet with them to discuss some possible options and on the day of the appointment they canceled and told me they would call me if they ever needed me.  I follow-up well! =)  They finally call me back a while after a Sale had been posted and want to have the appointment on the Friday before the Monday Trustee sale.  Yes, the Friday before the sale!!!

The family was so spun after meeting so many different people that they didn’t know what was what.  But the ‘Man’ of the house was so stubborn and out of touch with reality that he was spiteing his family for the sake of his way!  I explained that whatever route they would take, regardless if it was with me or not would require the sale on Monday being stopped!  He refused to listen how or why that would happen.  The poor lady was stuck with this guys leadership and he was heading to disaster!  There was close to 200k in equity he was playing with and he refused to hear me out.

I walked away convinced this house was going to sale and I was right!!  Monday morning at 10:30am the Property was sold at Auction and they lost a lot!!

Last week I met with a Homeowner who had a house that they owned for over 20 years.  They had a loan with Citimortgage and had been having issues with them for many years.  It became worse once they fell behind and started trying to get help from them.  They ultimately denied them any type of assistance and aggressively pursued a Foreclosure of their property.  The homeowners saved up all the money they could and in the final weeks tried to get a final reinstatement figure.  When it gets close to the sale things can get very hairy for both Borrower and Bank so no wonder things got worse.  The Bank was blaming the Trustee saying they were still waiting for their up to date attorney fee’s and the Trustee was saying that the Bank wasn’t giving all the information they needed.  The homeowner started calling everyday to both the Bank and Trustee with no success.  On the day of the sale the homeowner called the bank first thing in the am, the agent told them they were still processing the figures but that they would have their final reinstatement sometime that day. SOMETIME???  HOURS before the sale the bank somehow got the info and told the homeowners they would give them a reinstatement figure.  That’s crazy, HOURS before, I mean what happens if they get into a car accident going to the bank.  But anyhow it didn’t matter, When the bank finally gave them a figure they told them in the same breath that it didn’t matter because the property was sold to a third party!  Game Over!!  Don’t let your situation get to the 11th hour especially with Citimortgage.

Tim’s father purchased this house in Torrance back in the mid 1960′s.  He moved to California to pursue a Welding career and ended up at a Plant welding for a company in Torrance, CA.  Tim grew up in this house and followed his fathers footsteps as a welder.  For the last 40 plus years Tim’s been in and out of living in this home.  The last few years Tim has been taking care of his father due to his age and health problems.  Unfortunately, Tim’s father got sick, wasn’t able to recover from it and passed away very unexpectedly.  Tim wasn’t prepared at all for this loss and quickly realized that his father had several debts including the house that needed to be satisfied.

Tim had worked very infrequently while his father was sick, mostly on temp assignments or contractually for short period of times.  When his father passed all the creditors started calling and harassing Tim.  Although he wasn’t financially responsible for his fathers debts he was the person they could try to get something out of.  Times are tough for everyone so even creditors are a bit desperate.  The major issue was the house and the Bank gave Tim the allotted time to do something to satisfy their agreement. Tim’s father did place the property in a trust and gave clear directions to Tim on how to disperse what he had.  Unfortunately, what Tim didn’t realize is most everything it took, to handle his fathers affairs, required money.  So although Tim wasn’t the one financially responsible, he started to feel and act like a homeowner in denial with their foreclosure.  Without a full time job and hardly any money in his bank account he wasn’t going to be able to refinance the home.  But like most homeowners in foreclosure, he waited so long that he was now faced with a pending Auction of his home in less then 30 days.

The first thing I had to do was asses his entire situation, to figure out what I was dealing with.  Next, I had to figure what Tim’s capacity was to resolve this matter.  What has he done already and what was still possible.  And lastly, I wanted to know what he wanted to see happen immediately and in the short to mid term future.

Once I understood everything  it was clear what needed to happen.  He had to sell his home to prevent a total loss.  However, there were several things that made just selling it a challenging task.  With only 30days remaining before an auction of the property he needed to negotiate with the lender to prevent the auction from happening.  The house was also very old and run down.  It needed a lot work to get maximum value or else he would have sell at a serious discount.  Tim also had very limited finances but fortunately he had just secured a short term contract with a local company that would pay him for a couple months.  However, he didn’t have much in reserves and he was going to need money for a security deposit and first/last months rent.

What I proposed to Tim was to step in as a financial partner in the sale of his home and help him get where he was at now to wherever he was going next.  My proposal was simple but would maximize the sale of his home, prevent a total loss and allow him to transition to a new place seamlessly.  I would negotiate with the lender to prevent the sale from happening.  If necessary I would pay them money necessary to prevent the Auction from happening.  I would finance all the improvements to his home that were necessary in order for the property to sell at it’s highest value.  I would provide our relocation services to Tim which would help him find a place and pay the amount necessary to move in.  Tim wouldn’t have to come out of pocket for anything in regards to the sale of the property.  He would have an expereinced team working along side him that would eliminate any issues and insure maximu return on the sale of his home.

It didn’t take much for Tim to agree!  I’m happy to say this project is moving a long and the Auction of his home has been eliminated.    Tim has been very grateful and is eager to move on to the next chapter of his life.