FAQ

Foreclosure

1. What is foreclosure?

Foreclosure is the legal process that banks and mortgage companies use to force the sale of your home to repay a debt; usually the mortgage on your home. Even if one payment is missed the lending institution can take the property back and then sell it to repay the money owed them.

2. How quickly can the bank foreclose on my home?

BE VERY CAREFUL! Each lender and each state has various procedures. You may have heard of some homeowners being in default for 24 months before being evicted. You must also be aware that others have lost their home in just over 30 days of missing their first payment! There is a great resource on the internet that lists each states foreclosure procedure. http://www.stopping-banks-foreclosures.com/state-foreclosure-process.html Please consult with a lawyer before taking any action based on these statutes.

3. How will foreclosure affect my financial future?

A foreclsoure can remain on your credit for up to 7 years, making it very difficult to obtain a loan for any purchase in the future. What homeowners often overlook is that if they are foreclosed upon, they don't get to just walk away from the financial obligation. The lender can hold them legally responsible for the difference between the sale price of the home and the current mortgage amount. Also the federal government can consider the amount as taxable income. That is why so many people end up having to file bankruptcy, which has an even greater negative effect on you financial future for 10 years.

4. How can I stop a foreclosure?

You have many options if you act quickly. The first thing you need to do is get all of your financial paperwork in order. This includes al of your loan documents you received at closing along with any documents from a refinance or home equity loan. You also need to get together all your current income and expense paperwork including pay stubs, bank statements, car payments etc. The next step is to contact your lender immediately and notify them of your situation. Then contact the foreclosure crisis center to review your options and implement a plan to take action!

Loan Modification

1. What is a Loan Modification?

Loan modifications can take a number of different options depending on the type of loan you have and your mortgage lender. For example the interest rate on a loan can be temporarily or permanently reduced. An adjustable interest rate can be changed to a fixed interest rate. The term of a loan can be extended from the standard 30 years to 40 years. In some cases the principal balance owed on a mortgage may be reduced. One or more of these methods can be used to reduce the monthly payment for the borrower. The borrower must meet certain income and hardship qualifications to use a loan modification to lower their monthly payments.

2. How is a loan modification different from refinancing?

Refinancing is essentially getting a new loan to cover your initial mortgage to cut costs. Refinancing is not available to homeowners who have less than pristine credit. Loan modification is working directly with the lenders of your mortgage to have the monthly payments reduced and the duration extended. Loan modification is available to anybody who is in financial crisis and does not want to lose their home.

3. How do I know if I qualify for a loan modification program?

The number one deciding factor for your lender is your ability to afford the new payment, now and in the future. You have to show the lender that based on your income and expenses, you will be able to sustain the new house payment. Call us today to see if you qualify!

4. Can my missed payments be added into the loan modification?

Yes, part of the negotiation process is to have your missed payments added back into the new loan and spread out over the term in an affordable payment structure.

5. My bank has added a lot of fees and penalties-do I have to pay those?

First of all, you are legally entitled to a complete, detailed accounting of all fees & penalties. Depending on your type of loan, the lender may be required to WAIVE those fees & penalties. Learn your legal rights before you agree to over pay for any loan modification.

Short Sale

1. What is a short sale?

A short sale is the process by which homeowners can sell their home for less money than they actually owe on the mortgage(s). This is accomplished by negotiating with your lender to agree on a contract price that is less than you owe and to write off the remaining balance without holding you responsible for the difference. If the sale is approved, the lender will take a loss on the mortgage, the mortgage is considered satisfied on your credit and any foreclosure process is permanently stopped.

2. My home is already listed for sale with an agent and is on MLS. It isn't selling; can I still do a short sale?

Yes, you can! Some lenders even require that a house be listed for sale before approving a short sale in order to show that a discount is necessary. Many homeowners are realizing that their loan is upside down and is simply not going to sell at a price that will cover the current mortgage loan.

3. Who pays the real estate commissions on a short sale?

The commissions are paid from both the buyer of the home and the lender. They are willing to do this because they realize the financial benefit of having a professional real estate agent sell the home before it goes through a costly foreclosure process.

4. How long does a short sale take?

A short sale property can have a contract in as little as 24 hours. But it can take 60 to 120 days or longer to get the lender to agree to the terms of the contract. This is very important. The process is complicated and takes a lot of time. So to take advantage of the short sale option, you must act quickly. If you wait until one week before eviction, no one can help you with a short sale. It is simply impossible. DO NOT WAIT.

5. I am behind on my mortgage payments, but not yet in foreclosure. Can I do a short sale?

Yes, this is happening with much greater regularity. Sometimes these are the most attractive short sales for both the buyer and the lender because the buyer can take advantage of the lender's ability to avoid the vast majority of the costs of foreclosure. In these cases, it is more important to have a very clear "hardship" story to explain to the lender why you are unable to make the payments

6. I have 2 or 3 mortgages on my house. Can I still do a short sale?

Yes, each mortgage or line of credit (HELOC) can be negotiated individually. It is important to know which mortgage holder filed the foreclosure. typically a second mortgage holder will negotiate a lower payoff amount once they know there is a buyer for the property.

7. Other people are on the deed with me, but they don't want to short sell. Can I still do a short sale?

No. All parties listed on the deed or mortgage must sign the short sale purchase agreement. There are no exceptions to this.

8. My house needs a lot of repair; can I still do a short sale?

Yes, but you need to understand that the price must be lowered to compensate for the repairs. The key is to show the bank's appraiser all the work that needs to be done. Please let us know in advance if this is the case with your home.

9. My home is really nice, why is the short sale offer price so low?

Sellers often have an emotional attachment to their home and may feel a short sale offer is too low. This is completely understandable. It is important to remember a few things.

First, the seller in a short sale is not receiving ANY money in the transaction. It should therefore be of little concern what price is offered as long as the short sale is done.

The important factor in a short sale is whether the lender will accept the price offered. Lenders often accept prices for short sales which may be surprising to normal homeowners or Realtors. Discounts of 30% are no longer uncommon.

This happens for several reasons:

A. Sellers are often in denial about how bad the market really is for housing and therefore, how far the value has declined.

B. Lenders don't like the foreclosure process any more than homeowners do. Lenders incur substantial costs during a foreclosure process that can last more than 12 months. A short sale is a way to avoid some or all of these costs.

C. For example, If a lender calculates that on a $500,000 mortgage the cost of eviction is $50,000, and the market is only supporting 70% of the value of the loan then they will often take a price of $350,000 on a short sale. This may seem shocking to the owner, but the bank sees it as a financially sound contract!

10. How long do I have to move out after a short sale?

The purchaser of the house is the owner after a short sale, just the same as in a normal sale. The mortgage lender is paid off and the previous homeowner agrees to a date in which the new owner takes over occupancy. This is a major advantage to foreclosure where you can get an eviction notice giving you only 10 days to relocate.

11. How will my credit be affected by a short sale?

The lender will report the loan as paid but most likely you will have accrued a number of late payments on your credit. You may have even had a pre-foreclosure reported to the credit bureaus. These can be detrimental to your credit score but will be much easier to overcome than a full foreclosure or bankruptcy. That is why we also offer a Credit Repair service which helps to legally minimize the length of time any negative information remains on your credit report.

12. How much does it cost to do a short sale? Do you offer a Guarantee?

We do not charge any fees for evaluating your situation or listing your home with a reputable real estate firm. When we have a firm offer on your home we do require a $495 service fee to cover the cost of the extensive legal and administrative costs we incur to negotiate the final contract with your lender.

We offer a full refund PLUS $500 if we are unable to Short Sell your home once it in under contract.

Financial Analysis

1. What is a Credit/ Financial Analysis?

Every homeowner has different circumstances and a different DTI (debt to income ratios). The financial analysis is the first step in reaching your goals. We start with a thorough review of your current income and expenses to determine the best course of action for your financial future. We also look over your loan paperwork with a fine-tooth comb to find any mistakes your mortgage lender made. This gives you leverage when negotiating with your bank. You are now prepared to find the best option for your financial future.

2. What do I need to get a Financial Analysis?

You will need to have some important documents available in order to determine your eligibility and DTI for a number of different programs. You will need your monthly income figures for your household. This includes all the income that you would state on your taxes, i.e. unemployment, child support, alimony, pension etc.

You will also need to have your monthly expenses which include items such as , mortgage payment(s), credit cards, student loans, child support, alimony, car payments and any other recurring debt you pay.

3. How much does it Cost to get Financial Counseling?

Many companies charge an upfront fee of up to $1500 just to determine if you qualify for a loan modification or debt consolidation. At the Foreclosure Crisis Center, we pride ourselves on the fact that we put helping families first. We never charge you a fee for our counseling services, period.

In the spirit of being completely upfront with our customers, once a specific course of action is mapped out for you, there may be a fee charged by the company that is handling the actual legal process of modifying your loan, negotiating a short sale, consolidating your debt or repairing your credit. These fees are kept to an absolute minimum in order to help you accomplish your goals and keep our doors open.

4. Is my information secure and confidential?

At the Foreclosure Crisis Center we uphold the confidentiality of your private information. We never share your information with 3rd party representatives unless you specifically request their services. We also ensure that any affiliate that we recommend also upholds the highest standards of website data security and financial confidentiality.

Debt Settlement

1. What is the difference between Debt Consolidation and Settlement?

A debt consolidation loan will not reduce the amount you owe but can reduce the interest rate and possibly extend the length of the loan. It will reduce your monthly payment, cut interest charges, and help you create a monthly household budget, improve your credit rating by paying creditors quickly and prevent pestering phone calls from creditors.

Debt settlement is commonly know as debt negotiation. This is appropriate since this option allows us to negotiate with your creditors a one time payoff payment that can be as little as 50% of what you currently owe. This is an excellent option if you have the funds available to make a one time final payment. All the phone calls stop. The late payments on your credit score stop, there is no legal action taken to collect the remaining funds. Its over. You now have a completely fresh start for your financial future!

2. Will this hurt my credit?

Absolutely not. In fact, following our plan will only improve your credit and overall wealth.

3. How long does this take?

Once we receive your information you will have your financial analysis and personalized plan within 10 business days. Fill out our online form for faster service!

4. Why is the service charge for Debt Consolidation so inexpensive?

Because the economy requires lower cost solutions. By collecting your data into our proven industry leading software. We are able to work your account more efficiently and with greater detail. This requires less overhead while still providing amazing results.

5. What is your Guarantee for your financial services?

If we are unable to meet our guarantee you have the option of receiving a refund for the difference - up to 50% of your purchased package price - and keeping our services OR terminating your account and receiving a full refund less a $75 processing fee. You must allow 30 full days after the negotiations have taken place to prove the refund. If a refund is needed you will receive a check via certified mail within 10 business days. To review the full Terms & Conditions, please refer to our website

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