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Don’t Walk Away…Fight and Stay!

by Martin Macisso

That’s my motto and it’s pretty simple at that, but the message is a complicated one. When so many Americans (millions) are underwater on their home’s value, falling behind on monthly payments and have lost income or employment, they see no other option than to just throw in the proverbial towel.

My message to these individuals and families is one word: DON’T!

There are so many better options that struggling homeowners now have at their disposal as opposed to admitting defeat and turning over the keys to their homes. The American Dream is not owning a home, in my humble opinion, the American Dream is life, liberty and the pursuit of happiness. (Well, that’s what Tom Jefferson said anyway a couple hundred years ago, and I tend to agree.) However, owning a home is a product of a FREE and Democratic society. When a Free American who is down on their luck and experiencing a temporary hardship, it is not the American Way to simply duck and run for cover. We must fight! We must not let the Corporate Quasi-Governmental Banking Institutions take our homes!

So the question you might ask is:

“How can I stay in my home when I can no longer meet the payment obligation that was outlined in the Promissory Note that I signed at my loan closing? ” Or a question similar to that right? :p

There are options, but you won’t find them in the monthly mortgage statements or the predatory mailings from “Foreclosure Saviors” that you may be receiving. It takes a little Due Dilligence on the homeowner’s behalf and a qualified Real Estate Professional with loan experience and foreclosure knowlege.

In a nutshell, if a struggling homeowner can no longer afford the monthly mortgage payment for reasons they can document, such as income loss, family hardship or miscellaneous reasons then the FIRST option is: Loan Modification.

  • Loan Modification is a new and evolving process where a homeowner asks for a mortage payment reduction to at least 31% of their Gross Monthly Income. The idea is to present the Mortgage Company with a Packet that includes a Hardship Letter, Debt to Income Analysis and Proof of Income. The Loss Mitigator with the company will determine if a lower payment is warrented versus Foreclosing on the property and loosing thousands. The Lender’s are not obligated to do this so its a case by case basis and time consuming, but well worth it.

The Second option: Short Sale

  • The Short Sale is quickly becoming a saving grace for homeowners who more on their mortgage than what the house is currently worth. In Maine the rate of depreciating values is 14% per year. Those who bought in the past 5 years will likely be “underwater” on their homes and in need of Short Sale services if they need to sell their house. A real esate pro who is experienced in Loss Mitigation is needed to make this process work. There are many factors to consider and Lender’s DON’T have to consider a short sale but they WILL if you present them with the necessary informational packet and negotiate properly. This is considered MUCH better for a homeowner than a Foreclosure and actually enables a homeowner to qualify for a mortgage again in as little as 24 months.

Third Option: Qualified Written Request (RESPA Law)

  • When the negotiation process breaks down with a hard nosed Loss Mitigator for whatever reason, the Real Estate Settlement Procedures Act, 12 U.S.C. Section 2605(e) calls for a written letter DEMANDING verification of the alleged debt and a dispute of the debt by the borrower. This is a powerful tool that, if used correctly, can provide the borrower with needed leverage over their greedy lender. The unfolding reality of this Foreclosure Crisis is that the “Lender” claiming to have right to collect the mortgage payment from a borrower is NOT ACTUALLY the lender and owner of the debt at all! If a company alleging ownership of a debt does not provide the PROOF as called for in detail by a Qualified Written Request, then the borrower can actually have the debt “set-off” and wiped clean if the QWR is created in the correct manner.

After these steps have been excersised and the Foreclosure Process has still been initiated, the Borrower who is now the Defendant in a Civil Suit, will now have the WEAPONS needed to fight an unlawful Foreclosure Complaint. In the State of Maine, a Judicial Foreclosure is a Godsend for homeowners who have mortgages that were originated by a Broker and Securitized. (more on this in a future article)

So with that said, the Struggling Homeowner has many reasons to keep their head up and their “dukes up” to fighting for their homes and their lives.