First, let me give you a little background information about myself; don’t take this as a sales pitch, I just want you to understand my depth of expertise in the field of foreclosure. I’ve been helping families save their homes from foreclosure for about 12 years and I am very good at doing it. Over the years, I have personally helped 1000’s of foreclosure victims stop foreclosure. My company works nationwide and we have local affiliates in almost every state, so we can help anyone, at any time, in every state. I have written many articles about foreclosure and I’m interviewed by newspapers, radio and TV channels quite frequently. Many people consider me an expert at stopping foreclosure.
This is where it gets personal:
Last week I went home to visit my family for the 4th of July. My parents live on a lake in Michigan and have the whole family over for most holidays. Because I live in California, I don’t get home often, but I couldn’t resist going home to watch fireworks with my family on the lake.
My parents don’t really understand what I do for a living, they just think it has something to do with getting mortgages. Even though I’ve explained it several times, It obviously never sunk in, because after the fireworks, my dad asked me to help pack some of his WWII metals and memorabilia and then broke down in tears while explaining that this would be the last time we would see fireworks together on the lake. At first I was afraid he was sick or he was going to die, which immediately brought tears to my eyes as well. But then he told me they were losing the home to foreclosure in two weeks.
I was shocked! Why didn’t they tell me sooner, why didn’t they ask for money? At first I was very angry with my dad for waiting so long to tell me and it’s even worse that they didn’t ask for help. The only good thing about foreclosure is that the foreclosure laws allow ample time to stop foreclosure. In my experience, it only takes about 30-60 days to stop most foreclosures, so having less than 14 business days to stop this one would be difficult.
My dad had been working for the same company for over 25 years and suffered a non-work related injury that caused him to miss 8 months of work. By this time he had recovered and was working again, but the loss of income for 8 months caused all their bills to fall behind. They had missed about $40,000 worth of payments and the lender added nearly $6,000 in additional fees! Even though they could now make the payments for the house, they could not come up with $46,000 to pay the arrears. They tried to sell the house, but in 6 months, there were only three people who even looked at it. They thought their only option was to let the bank take the house. They did have money saved for retirement, but they decided not to use it, since they planned to retire in 3 years. (Thank god they didn’t cash in their retirement accounts!) Since the bank would no longer accept their payments, they managed to save about $6,000, but the bank said they needed $23,000 to stop the foreclosure and the normal mortgage payment would be $1,300 higher than usual. They didn’t have anywhere near $23,000 saved and they couldn’t afford the extra $1,300 on top of their normal payment, so they knew they couldn’t keep that mortgage. Refinancing wasn’t an option either, because the home didn’t appraise for enough and their credit scores had dropped when they started missing payments.
Here is how we stopped the foreclosure in just two days:
(I’m summarizing here to save time, but this should help give you an idea of the exact steps taken to stop the foreclosure)
Monday Morning July 7th 9:00 am
I dialed the lender at 9:00 am and eventually spoke to an actual person at 10:42 am. I told them my name was Mike, with ForeclosureFish. I intentionally left out my last name, so they didn’t know I was related. (I’ve found that lenders would rather work with a 3rd party, who is not emotionally attached, rather than the borrower themselves or a family member) I explained that I had been employed to help resolve the foreclosure and get the loan back on track. I was placed back on hold for another department; someone eventually answered again at 12:13 pm.
Before calling, I had faxed a signature authorization to the lender that allowed my company to speak on my parents behalf. I also pulled up the original appraisal that the lender ordered when the mortgage was given to my parents. I knew that many lenders inflated their appraisals to help get loans approved, so I wanted to use that as ammunition against them when fighting this case.
Monday Afternoon 12:13 pm
Shandra answered from the Loss Prevention Department. I explained who I was and gave her the loan number I was calling about. I told Shandra that the call I was making was really a formality and that we intend to turn this case over to our attorneys, but I wanted to make an attempt to modify the terms of the loan first. She told me that she didn’t have authorization to speak with me about the account and that I would have to call back once I have a notice of authorization. I explained that I had been on the phone for 3 hours and that the authorization was faxed over 48 hours ago (ok, I lied) and that I faxed it again this morning before I called. After being on hold for a few min. she came back and said she found the authorization and could speak with me. At that time, I told her that it was our intention to file a lawsuit against them for a fraudulent mortgage, because of the original inflated appraisal and the circumstances related to how the loan was provided. (who knows if a lawsuit was plausible in this case, but most lenders are guilty of something) I told her we were obligated to give them a chance to make things right first, and this was the purpose of my call. This is the same approach we would normally take with other cases, however, it is done in writing, rather than over the phone and generally we verify that the lender has broken a rule or law first.
She explained that a modification had already been turned down, so there was nothing she could do to help. This is what I expected to hear from her and asked to speak with her department manager.
Monday Afternoon 12:47 pm
After leaving a message for Darin, the Loss Prevention Department Manager, he returned my call 10 min. later. This surprised me, because I fully expected to make several calls before getting a returned call. When I spoke with him, he said they would obviously want to do anything possible to avoid a lawsuit, but he also explained that two weeks was not enough time to get a loan modification approved.
I tried to appeal to Darin’s good nature (Ha, Ha) by asking him if there was anything he could do to delay the sale for long enough to get an approval. He said that the only way he could delay the sale is if we paid $2,700 to cover the attorney fees. He said this would allow a 30 day extension and could be done anytime up to 24 hours before the sale.
I told Darin, that if that was the best he could do, I would just have to inform our attorneys that he failed to re-evaluate the case once the financial situation had changed and forced the home into foreclosure. I then asked him for his complete name and employee number for my records.
Darin: “I’ll tell you what. If you can fax me the forms I need completed in the next hour, I’ll try to put a rush on it and if everything looks goos, I’ll submit it for a modification.”
He said he couldn’t make any promises, but he would try. He faxed me the forms to fill out and we sent them back 30 min. later, followed up by a phone call.
Monday Afternoon 3:00 pm
In my follow up call to Darin we reviewed the financial documents together and came to an agreement that a loan modification would work in this case, but it still needed to get approved, which could take up to two weeks. Darin just submits the case to his investors and they approve the final deal. By this time, Darin and I have established a good relationship and I now feel that appealing to his good nature may work, so I tell him that I am leaving on vacation in two days and would really like to get the case resolved by then. (it’s sad, but when I work on cases, the people on the other end care more about making me happy than helping the foreclosure victim save the home) He said he would submit the case today after the paperwork was complete and that I could call and check the status tomorrow afternoon.
Tuesday Morning July 8th 9:00 am
I called Darin to ask if there were any problems when he submitted the case last night. I got his voice mail, but left a message with my cell phone number and instructions to contact me if there was anything he needed.
Tuesday Afternoon 1:00 pm
I called Darin a second time and left a message. He returned my call a few min. later and I told him that we wanted to be prepared to take action as soon as the loan modification was approved. I knew from experience that we would probably have to make a payment to start the new plan, and I wanted to make sure everything was ready to go as soon as possible. This call was really just to let Darin know that I was not going to leave him alone until this was resolved today.
Tuesday Afternoon 2:12 pm
Darin called me to let me know the modification would be approved, but we would need to begin a “workout plan” to stop the sale, while we wait for the modification to take place.
This meant that the payment plan they originally game my parents would be paid for 2 months and then the loan would be modified to a lower payment and the arrears would be built into the loan.
This is what it broke down to:
Cash needed to start plan: $4,500
Payments for first two months: $4,300
Payments for remaining 180 months: $2,795 (original payment was over $3,000)
My parents had 12 years left on their loan and when it was modified, it turned into a 15 year fixed loan, which lowered their monthly payment. This made the home much more affordable and the $6,000 they had saved covered nearly all the extra expenses.
As soon as we had the approval in writing, we sent a Western Union payment for $4,500, which immediately stopped the foreclosure and began the repayment plan.
I will follow up with Darin several times over the next few months, to make sure the plan goes exactly as we arranged, but we got everything in writing and my parents can easily make the new payments. Now my parents will get to keep their home and when the market recovers they’ll hopefully regain all the equity they’ve lost from these poor conditions.
Needless to say, my parents didn’t tell me about their problems, because they were embarrassed and didn’t want to admit they needed help. But had I know about the problem sooner, I could have virtually guaranteed that it never would have been a problem. Luckily, I was free to spend most of two days on the phone and had all the paperwork, knowledge, and experience to quickly stop the foreclosure, but things could have just as easily gone the other way.
If you are facing foreclosure, your first step should be to get help and, by all means, talk to your family about the problem. Always talk to your lender to find out what solutions they have available and if that fails, please seek professional help to stop foreclosure.