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Marvin Von Renchler's Blog

By Marvin Von Renchler | Managing Broker in Tigard, OR

Ways to save your home? Yeah---maybe you shouldnt though?

Some other agents here have given great information about the different government and private programs/companies to use for saving you property from foreclosure. If they fit, use them of course, but I want you all to know that a lot of it is just posing by our great government of, by and for the people, and you shouldnt plan on any of them working. Be prepared for alternatives. I'll touch on some below.

As a BPO agent Ive dealt with over 2,000 people who tried for loan modifications and only spoke to less than 10 who had any degree of success. The lenders want to foreclose. Our government makes sure they dont take losses.  Lenders never had the infrastructure to deal with REO but now they do in spades, and actually are pulling back and saving money by outsourcing loss mitigation, etc to new third party companies. For example, IBM has a huge new division supplying people who try to do loan workouts with delinquent borrowers. The lenders pay them to do it instead of worrying about employees, training, etc.  I predict we real estate folk will see almost all REOs listed through a few majors and maybe even a portal similar to eBay, taking listing opportunity from most smaller offices. Im off track now---to et back to options to save the home, Obamas plans have been a failure. Yes, some were helped. MANY more were not. Ive seen loans modified and the payments were increased!

The lenders made it so difficult to try for a loan mod, that months would go by with fees and back due mounting. Then as far as over a year from starting the mod, they would turn the homeowner down and demand huge amounts to cure the default. Of course many legal fees were added. Most people could do nothing but a short sale IF they were lucky and the lenders went for it, or just lose it at sale or give it back to the bank without a fight. Its been a major scam and should be exposed to the public.

Though Obamas plan/s (Like he actually created them--) sound good, they have not help a large percentage of people in trouble. The newest ones will not either. They help those who need help the least. That subject would take an hour so just trust me about it.

TIP: If in default or in full foreclosure process, contact your TITLE COMPANY and ask if your loan/s were handled by MERS. Everyone knows what MERS is, I wont elaborate here. Look it up in a search engine.  If MERS was involved, you may be able to stop foreclosure proceedings. Speak to a good real estate lawyer. If your loan is still with its original lender, chances of being a MERS loan are less but ask anyway. Through use of legal actions Ive seen people stay in their homes for close to 2 years after they should have lost the property. Im not a lawyer and this isnt legal advice---its what Ive seen.

Remember you need INCOME for a loan mod or a chapter 13. Stopping a foreclosure process may give you time to get a better job (or a job if you are unemployed) or maybe have the spuse also work, etc.
If you can stop a normal foreclosure, the lender may give up fighting you over MERS or other issues and file for a JUDICIAL foreclosure. Thats a court and judge instead of an auction.That is very costly to a lender. Perhaps you can negotiate with the lender at that time for time to move, no reporting of deficiency to the IRS, etc.

BANKRUPTCY is something to consider and you may need to no matter what happens with your house. If taking taking a loss at sale, the lenders may try to legally force you to make up the difference. Its called deficiency.

If you are no longer responsible for certain mortgages, the IRS may be able to come back and call it 'relief of debt' as though you earned enough money to pay off that debt, and TAX YOU for the difference!

If you file a chapter 13 to save your home, your original house payment will need to be made plus all the back due will be divided into a 36 to 60 month payback plan and added. So, your payments will go up but you may be losing huge debts from consumer debts and junior mortgages. If your house value has dropped to just your first mortgae amount or less, the junior loans may be cleaned off. Again, Im not a lawyers and this advice is from what Ive seen happen with customers. Point is, dont let this all go to the last minute. Dont be afraid to see a lawyer or do a bankruptcy.  Also consider if its worth it to fight at all, especially if your value is below your mortgage/ amount. Is there some special reason to keep it anyway? Do you have a unique reason why it will appreciate when most real estate is still depreciating and probably will for another few years? Rents are increasing as more and more owners are forced out of their homes, causing a greater rental demand. By now your credit is probably bad and landlords dont like that. Be prepared to tell your story---perhaps you are in a good position to pay rent now, and even you old mortgage payments but its too late to bring all the back due current or you dont have a spare $30,000 laying around even if not too late. Remember that you are alive and thats what matters. This is not just a bump in the road---its a mountain in the road but you will survive and be relieved to just end the process and move on.

Its been hard for me to take pictures of empty homes and see the childrens growth charts marked in doorways, crayon pictures scattered around, etc. A family with all their hopes, dreams, good times and bad times lived in each one. 

If you do lose your home, change your spending habits. Get down to basics. Save money. Be creative about making money. Heck---night time pizza delivery can be pretty good tip money! Certain paper routes will pay $1,200 or so a month for a few hours in the early morning. Get part time jobs for the weekends or other days you dont work your regular job. I know thats easy for me to say to you but Ive been there too folks. Real estate hasnt been a bottomless piggy bank for each and every one of my last 32 years in it.

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