Your_options

If you are in default on your home mortgage, you DO have options. Listed
below are some of the various options our company offers. Not all options will
apply to you and your situation. In order to find out what will suit you best,
please call today to arrange a free consultation with one of our representatives.

Forbearance: A forbearance is an agreement between the current lender and the borrower that
reinstates the delinquent loan through the payment of a lump sum or a schedule of payments
over a period of time. For instance if the borrower is behind on his or her payments the lender
may allow the borrower to pay the money back through installment payments over a set period
of time (e.g. 6 months). Or the lender may also decide to allow the borrower to pay a reduced
monthly payment until the borrower has an opportunity to get back on his or her feet and pay
any remaining arrearages in one lump sum.

Loan Modification: A loan modification is a change in any of the terns of the original note.
This includes decreasing the interest rate, re-amortizing the remaining balance, extending the
term of the loan, or other options at the lender's discretion to assist the borrower through a
temporary setback.

Refinance: Mortgage refinancing is a good option when a new lender would allow the borrower
to refinance his or her existing mortgage, wrap in any late payments and fees, and cash out part
of his or her equity in the home to allow the borrower to regain control of a deteriorating financial
situation. Refinances are generally open to borrowers that face a temporary setback in their
financial situation, have an outstanding credit history in the past, and can prove that he or she
can support the new mortgage payment.

Junior Mortgage, Line of Credit: A new lender may offer a second loan or junior lien to a
borrower in order to make up any back payments, late fees and other charges necessary to
reinstate the loan. The borrower, in return, will be required to make an additional mortgage
payment to cover the principal and interest payments on the second loan. Loan fees are
typically 5-10 times the average loan fees for an "A Credit" borrower. Plus interest rates often
rival credit cards.

Use caution before you choose a new loan. If you cannot make payments on your current
loan(s), can you afford a new more costly loan? Make sure to watch out for predatory lenders
that give unfavorable loans to owners in distress!

Bankruptcy is a way for people who owe more money that they can pay right now, (debtors), to
either work out a plan to repay the money over time in a chapter 11, chapter 12, or chapter 13
filings; or wipe out (discharge) most of their bills in a chapter 7 filing. While the debtor is
working out a plan, or the trustee is gathering the available assets to sell, the Bankruptcy Code
provides that creditors must stop all collection efforts against the debtor. When the bankruptcy
petition is stamped "Relief Ordered" upon filing, you are immediately protected from your
creditors.

What chapter you choose to file under, what bills can be eliminated, how long payments can be
stretched out, and what possessions you can keep, will be controlled now by the Bankruptcy
Code and the Federal Rules of Bankruptcy Procedure (the owners will NO longer have control
over any of his/her assets). These are federal laws, which means they apply all over the United
States. The Code and Rules are found in Title 11 of the United States Code.

Borrowers in default should think carefully before choosing bankruptcy, because it will have a serious
financial impact on their lives for the next 10 YEARS!

Many owners, who file bankruptcy and then later realize that they cannot keep their home and
must sell it, find it impossible to find a place to rent. Oftentimes after a bankruptcy filing and a
foreclosure, getting a landlord to accept you as a tenant, is an almost impossible task. Now
these owners find themselves homeless...something I'm sure they did not expect to have happen
(but that happens quite often)!

You must also realize that under the new bankruptcy laws, the first mortgage holder (lender) is
able to pull themselves out from under your bankruptcy protection after only a couple of months
and start the foreclosure process on your home. In other words if you file for bankruptcy you are
only delaying the length of time before the bank or lender can foreclose on you. Now not only do
you have a bankruptcy notation on your credit, you also have a foreclosure notation. Obtaining
credit for the next seven to 10 years will be almost impossible!

We recommend that you do NOT file for bankruptcy!

List with a Realtor on the MLS (Multiple Listing Service): Some owners have the great idea to
try to "hedge themselves" by shopping for a new loan at the same time they list their house on
the market. They quickly find out that this doesn't work! Their mortgage broker (or new
lender) has strict policies that state if you put your house on the market, they will terminate your
loan application! So this means the owner must give up on any chance of a new loan, once they
decide to list and sell their house. Quite often this is too big a decision to make so they decide to
"put off" listing their house until the very last minute.

Once the owner has decided to sell, and if they have at least 6 weeks prior to their foreclosure
auction, it is wise for them to contact a Realtor to represent them. If their house is in livable
condition in a hot market (such as the coastal markets of California or Florida), they will find a
buyer quickly (hopefully in 2 weeks) and should get closer to fair market value. However, they
have a big risk because the buyers will have to get their own financing. Can it close on time
before the pending foreclosure? The process of lenders approving the buyers credit, appraising
the house, completing underwriting, reviewing title, getting payoff demands and drawing
documents-can take 4 or more weeks to complete (assuming no problems pop up). If the new
buyers could not get the loan, or they could not close in time, the seller will helplessly watch
their house go to auction. This is a gamble many would rather not take.

Sell to an Investor: After the owner has exhausted all their options above, selling their house
to an investor who offers cash at closing, no new loan contingencies, no repairs needed (as is
condition), fast escrow, and a for sure sale is their best option. This provides a fresh start for the
seller.

Although the investor's price is less than fair market value, the investor will also be able to
salvage the sellers credit, bring his/her loans current, keep them current (and improve his/her
credit), and let them retain a portion of their remaining equity in their home. This is a MUCH
better solution for the seller than doing nothing, and losing everything at the foreclosure auction!

Deed-in-Lieu: A deed-in-lieu (DIL) of foreclosure is a voluntary conveyance of title to the
lender. Generally this is a last ditch effort by the borrower to avoid the negative consequences of
foreclosure. In return for the voluntary conveyance to the lender, the borrower is often released
of any personal responsibility for the mortgage. The DIL will still appear on your credit, and
even though it is not as detrimental to your credit as a foreclosure notation, it is still serious.

Pray for Auction Overbid: Last and least favorable choice is to do nothing and let the house
go to auction. Sometimes procrastination takes over, and the owners simply hide from the world
and hope "it will all go away". Well it does go away, just not as they expected. The lender will
hold an involuntary sale of their house and sell it to the highest bidder at the foreclosure auction.
If there are no bidders, the lender wins the house by default and it is now an REO (real estate
owned) property. I have seen many cases where the owner gets a letter from auction bidders
trying to get the owner to let it go to auction. These investors promise the owner will get more
for their house (due to competitive overbid at the auction) than if they were to sell to an equity
investor before the auction. This is NOT TRUE! Oftentimes there is collusion at the auctions
and the auction bidders all agree to NOT bid against each other...but instead bid $1 over the
minimum and "split up the deal" after the auction. Please be aware of this scam!