Don't Be A Whimp

OK, I'm getting a little frustrated. I coach a lot of people on how to deal with their lender to enable to keep their house. Yes, I charge nothing for this, so I get to vent a little :-) so I'll share my frustrations.

When you're talking to these guys (the lenders) you've got to realize that you're negotiating to keep your home! Act like it - be passionate! Keep bugging them until you get a commitment, or keep asking for a supervisor (or their boss, and their boss) until you find someone that will work with you to keep your home.

Remember, it's just a job to these people, and if they want to leave at 5pm (or mail you a package), most will leave and lose your stuff by the next day. Take the lead!!

I'll let you know what's reasonable for the lenders to expect (as for as $$, paperwork, etc.) - you've simply got to keep following up. Do NOT sit around waiting for them to call you back, or waiting for mail or a fax. Actually, NEVER let them mail anything - it takes way too long. Have them fax it. Don't have a fax? Someone that you know has one, or bite the bullet and have them send it to Kinko's. Each day (and hour) that ticks by brings you that much closer to losing your house - take control!

Some people are upset with me because I won't jump on the phone and negotiate for them (on occasions I have). Here's my theory, if you're passionate, you'll do a much better job than I will because I'll coach you. Some families have hired firms to negotiate for them. What a waste of money - don't bother. They seldom are more success than you can be, plus, even if they offer your money back if they fail, everyone I've talk to that have tried them can not get their money back.

OK, I think I'm done venting now.

Today I'm heading out with Jen to see three new families for us to help stop their foreclosure. Stop Foreclosure Man's job is never done.

Joel

New Team Member

Well my meeting with my potential new team member went very well! Jen is joining my team, and has a very important responsibility – helping to get the word out.

Everyone I help with stopping their foreclosure is always grateful they called me (even if I fail to help, they always feel better because they know more (see this entry). The problem is, there are so many people that need my help (over 600 foreclosures in Kalamazoo County in 2005) but they just don’t know the magic that I can work (their word, not mine). Because of all of the scam artists out there (see http://www.homeownerwarning.com), many people are either skeptical or they are still in denial of the foreclosure situation.

So, Jen has offered to help reach more of these 600+ families this year. She’ll be calling them and visiting them to let them know that I’m here to help, at no charge, and won’t put them in a worse situation.

My hope is that since you’re reading this, and need my help, you won’t wait for Jen to be calling you, that you’ll call me. The more time I have to help, the more options you have available to you.

Until next time…

Joel

You're Not Alone

I've mentioned before about how you shouldn't feel guilty if you're facing foreclosure or behind on payments. There's been articles about how Michigan is tops in the nation in foreclosure rate, 600+ in Kalamazoo county in 2005, blah, blah, blah.

I know at that heart of it, it doesn't really matter if it's YOUR family that has the financial difficulty. None the less, a picture speaks a thousand words.

This map (click the map for a larger image) ...

... is a map of most of the foreclosures that have occurred in Kalamazoo County over the last six months.

Each of these families have a unique story - something devastating that happened to them to start their financial world spinning out of control into the eventual nightmare of a foreclosure. So yes, you're not alone.

What's important on this map are the locations that are not on it. That would be the families that my team has helped prevent the foreclosure. Now that's something to be encouraged about. Want more encouragement? See what these families went through and what had to say by going here.

Joel

Most Common Events Leading Up To Foreclosure

Not much time this morning, so I just wanted to share this information from my website www.StopMichiganForeclosure.com

• Loan Fraud: Sinfully over-inflated, pie-in-the-sky false promises of a mortgage broker who just wanted to make a buck (no matter what happened to you when their fancy pants financing scheme fell apart!)
• The heartbreak of an unexpected divorce, and the accompanying financial devastation of trying to stay afloat both emotionally and financially. Besides, who wants to stay stuck in a house of pain?
• Unforeseen medical problems or disabilities that drain every penny for treatments, medications, hospitalizations, and procedures. There's simply no choice between a pile of bricks and boards and your health, or the health of a loved one. But the banks don't care, and neither will the judge in your foreclosure proceedings.
• The shock of unemployment when your job suddenly evaporates. You've worked hard day in and day out, but the "company bottom line" doesn't give a rip either. You're expendable, replaceable, and GONE for good from their payroll.
• Tricky and deceptive adjustable rate mortgages that suddenly send your payments soaring beyond what's possible. Should you feed your kids three squares a day...or make an obscenely high mortgage payment and live on ketchup sandwiches?
• Other predatory lending practices like grossly inflated appraisals so the lender can put you even deeper in debt or undisclosed or impossible to understand loan terms which caused your payments to skyrocket overnight.
• Or a tragic event, such as the sudden death of a family member, accidents, or a diagnosis of a terminal disease.

Sometimes things are so far beyond your control, there's nothing left to do but try and pick up the shattered pieces so you can begin to recover and move forward.

Joel

Wow, What A Week! – Let’s Talk Bankruptcy and Foreclosures

Wow, what a week! I thought I’d have time during the week to give you updates, but with my wife out of town with family, it’s been kind of nuts to stay on top of everything, so unfortunately, the Blog had to suffer.

Actually, she won’t be back until late Tuesday, so you may not hear from me again until Wednesday.

Something so significant happened this week though, that I had to blog about it. It has to deal with Bankruptcies and how they relate to foreclosures. Specifically, a Chapter 7 (complete wipeout of debt).

Keep in mind, I’m not an attorney as I go through this.

I started working with two homeowners this week, each who thought their bankruptcies would prevent a foreclosure on their credit. Let’s start with the basics.

A Chapter 7 gives you option of putting the house into it or not. Keeping it out means you’ll keep paying on the house and be able to keep the house. Both of these families decided to not keep the house (they were behind on payments and owed more than the house was worth – a typical scenario).

The job of the bankruptcy court is to sell all of your assets, take (most of) the proceeds and split it up between the people you owe money too – yes, this is simplified, but that’s the general idea behind it.

When you owe more than the house is worth, after filing the bankruptcy, one of two things are going to happen:

1) The bankruptcy court will look at what you owe on the house and what it’s worth. They’ll then conclude they won’t make any “proceeds” from the sale, and release the house from the bankruptcy.
2) The lender will petition the court to release the house from the bankruptcy. They’ll claim it’s worth less than what you owe, and they want it released so they can foreclose and cut their losses.

Either way, the house comes out of the bankruptcy and the lender beings the foreclosure process.

Here’s the problem: Most bankruptcy attorneys don’t tell their clients that at the end of all of this, they’ll have a bankruptcy and a foreclosure on their credit. Why is this important? Most people can get a home loan after a year or two out of bankruptcy (some lenders can do it immediately after – at a higher interest rate). The point is, though, with just a bankruptcy, you can be a homeowner pretty quickly. But, with the foreclosure on their credit (which stays for 7-10 years), buying a new home in the next 5 years is almost impossible.

Why don’t attorneys tell their clients this? Well, you can make your own opinion. Just ask yourself this, if you knew what I told you above about your credit and the foreclosure, would your bankruptcy attorney get any money from you? ‘Nuf said.

So, what do you do? If you’re considering bankruptcy, get me involved before you file. I’ll work with your bankruptcy attorney and we’ll develop a plan to stop the foreclosure from being placed on your credit. If you wait until 3 weeks before the foreclosure (like the two families I started working with this week), I can still try, but the chances of success are much less.

Please Tell Your Realtor

Today I talked to one seller who hasn't told their Realtor they are 4 months behind. I talked to a Realtor today (different house) about his listing that was in foreclosure and he didn't know it. WOW!

OK, let's get this straight - please. You know I'm not a real big fan of (most) Realtors. The vast majority are in it for the buck first and foremost. This is dangerous when families are behind on their payments, because often the best advice they could give you would negatively impact their pocket book.

Dspite how I feel, and the warnings I've given about choosing to work with them (see this link), if do chose to work with one and list your house PLEASE let them know if you are behind on payments or facing foreclosure.

You need to give them an opportunity to help you. Also, don't feel you're locked into a listing. Any broker (the Realtor's "boss") will release a distressed seller from a listing when better options are available to them. Be honest, tell them what's going on, get their opinion, and get the opinion of someone who specializes (full time) in foreclosures (um, that would be me, "Stop Foreclosure Man"). Shameless plug? Yeah, I know but hey, where else are you going to turn for the truth about foreclosure in Michigan?

Next week my wife (would that be "Stop Foreclosure Woman" or "Mrs. Stop Foreclosure Man"? - must be too early) will be out of town visiting her parents for a week, so you may not get a post from me every day as I'll have much more to tackle without her around. Wish me luck!

Joel

ARM Horror Stories

This is just weird. Yesterday morning I commented on a USATODAY.com Article about one in 5 ARM (adjustable rate) loans being in default.

I then talked with three homeowners who are in this trap - all in one day!

1) A Portage family whose payments have gone up every 6 months for the last two years. When the guy got laid off for 3 weeks, it was enough to put them behind and never be able to get caught up.

2) The next couple is from Lawrence. Not only were they caught in this ARM trap, but they also fell for the "mortgage broker promise of refinance" trap. You may have experienced this too - it goes like this: "Don't worry, we'll get you refinance before the foreclosure". Yeah, right! The simple fact is, they want their application fee and know that unless you've got a TON of equity in your house, there's no way they will get you financed with 2+ late payments on your credit. Unfortunately, they waited until 2 days before the foreclosure before calling me so there was nothing I could do.

3) This morning (after I take the doggies to the vet), I'm heading to the west side of Kalamazoo to help a couple who has their house listed with a Realtor. They are listed at about $20K more than the house is worth because they had no choice. Not only do they have an out-of-control ARM on their mortgage, but they also have a 2nd mortgage and they owe significantly more than the house is worth. Actually, it's a condo - we do condo's too.

I've got several deals "in progress" with lenders working on discounts that should pop soon - looking forward to passing along that good news when it happens!

See ya tomorrow!

Joel

USATODAY.com Article - One in Five ARM Loans In Default

If you only read one blog entry this entire month, this the must read - especially if you have an ajustable rate mortgage (ARM).

http://www.usatoday.com/money/perfi/housing/2006-04-03-arms-cover-usat_x.htm

Here are some significant quotes:

"Of the 7.7 million households who took out ARMs over the past two years to buy or refinance, up to 1 million could lose their homes through foreclosure over the next five years because they won't be able to afford their mortgage payments, and their homes will be worth less than they owe"

"Already, in West Virginia, Alabama, Michigan, Missouri and Tennessee, about one in five homeowners with a high-interest (subprime) ARM was at least 30 days late at the end of last year, according to the Mortgage Bankers Association. After 90 days, the foreclosure clock starts ticking."

The article includes some amazing stories - if you're facing a simular situation, you'll see that you're not alone. Many of these people will lose their house to foreclosure. The article also lists some places to go for help and advice.

Quite simply, for many people, life "events" happen and their houses simply become non-affordable. When that happens, let "Stop Foreclosure Man" come to the rescue!

Joel

The 5 Stages of Dealing With Difficult News

We’ve all heard of these five stages before (Denial, Anger, Bargaining, Depression, Acceptance).

How does this relate to foreclosure? Well, a foreclosure is one of the most emotional experiences people will ever go through. I talked to a guy last night who said to me “I’d rather cut off my right arm than have to lose my home to foreclosure” – now that’s a powerful statement!

It’s important that you understand the basics of these 5 stages – whether we’re dealing with a lose of our own, or trying to help a friend or family member through the process.

I think it’s best understood with a simple example that we can all relate to – the dead car battery…

You jump in the car Monday morning for work and turn the key only to find just a cold “whirr…”.

Denial - First you try it again, right? “This can’t be dead – I just replaced it a year ago!” You check to make sure the lights, radio, windshield wipers, etc are all off and you try maybe several times to crank it.

Anger – You slam your fist into the dash-board. “Oh you stupid car! I can’t believe you’re doing this to me!! I’m going to get you towed to a junk yard tonight! I should have bought a new one last year when I had the chance!”

Bargaining – “OK, if you start this one last time, I’ll keep you forever. Please car, please! I’ll get you washed and detailed (inside and out), buy you a brand new battery, add some gas additive, get you a tune-up, you name it, you’ve got it. Just start for me one more time so I’m not late for work”.

Depression – “Oh what am I going to do? If I’m late one more time, I’ll probably lose my job. I give up, it’s no use”.

Acceptance – “Alright it’s dead, where’s the number for the tow truck so I can get it jumped. I’ve got to just move on and get to work – maybe I can get a ride from Joe. I’ll get this fixed later”.

This is a rather basic example, and of course not nearly as deviating as the prospect of losing a house to foreclosure. But this is the basic process, and we usually go through it several times a day. We stub our toe, cut ourselves shaving, dial a wrong number, bounce a check, you name it.

OK, back to foreclosure – the sooner you can get yourself, or the person going through a foreclosure at least through the “Anger” stage and to “Bargaining”, the better. I can not begin to help anyone with their foreclosure until they’re at least Bargaining.

Wow – we’ll have to give you some lighter reading tomorrow – that was pretty deep

See you then!

Joel