Millions of homes nationwide are in "distressed property" status, it is likely that you or someone you know has been affected by the "foreclosure crises". I am sure that you have heard stories like that of the Torres family who paid over $8,000 to a 'firm' that guaranteed them a loan modification. After completing all of their payments to the so called 'firm' the family was shocked to hear that their home was about to be sold on the court house steps in a few short weeks. Mr. Torres broke down in tears while talking about all of the lies that he was told and the numerous useless messages he left begging for information and guidance from the 'firm'. His months of worry and desperation finally ended with a note on the door which read "Notice of Trustee Sale". Their family had counted on this 'firm' to "save my home". With less than a month left until their home would be taken from them, the family was lost with nowhere to turn. They thought about bankruptcy to stop the foreclosure sale date and wondered if the 'firm' had ever been truthful and if they still had any type of fighting chance.
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So where are people to turn? How do they know who to trust? Most importantly, is there any "hope for homeowners"? As it turns out, there are options. A couple of professional have founded a group of professionals that give FREE ADVICE to the community. Rebecca F. Castro and Leonard Bernal, Realtors with Keller Williams Realty in Whittier, California have teamed up with other agents and Bankruptcy Attorneys to help home owners nationwide get real answers to their questions on home retention and foreclosure alternatives. Rebecca gave us some insight into the truth about foreclosure relief and more importantly, how to avoid scams. Here are a couple of the most pressing questions...
Doesn't the government have a program where I can get help with my mortgage?
Answer: Yes, there are several programs under the umbrella of The Obama Administration's "Making Home Affordable Program" The most common is the modification program known as "(HAMP)". However, there are other programs that a homeowner might be eligible for like the Unemployment Program, 2nd Lien Modification Program, Refinance Program, and Foreclosure Alternatives Program. The two main criteria are 1. The property must be an Owner Occupied and 2. The loan must be owned or guaranteed by Fannie Mae or Freddie Mac. The main site of the government program page Making Home Affordable website can give you more detailed information on each program along with eligibility. In addition, HUD offers assistance through their office and holds occasional community events. A reputable and seasoned real estate agent can also give free advice on the different HUD options. Make sure that you do not pay for this advice since there are many good people willing to help you for free.
How can I tell if a Loan Modification is right for me?
Answer: Ultimately it is the lender or investor who will decide if you fit their criteria. It is important to note that each investor has different programs. Just because your loan is with the same servicer as someone else that you know, it doesn't mean that you have the same investor. Each situation is different and should be evaluated by a professional who is well seasoned in distressed property resolution. With a quick calculation they should be able to tell you right away if a modification is a good option that will improve your situation. Ask them to show you how they are calculating your estimated payments so that they are not just saying what you want to hear. Another good tool is a simple mortgage calculator online. If you have been paying on an interest only mortgage for example, and you want to know what your payment will be on a modification to a fixed rate...just plug in your principle balance and number of years left on your mortgage. It will tell you the estimated payment so you can see if the fixed payment is something you can afford. It should be this simple for a loan modification "expert" to help you with. Therefore, if they can't do it in front of you or over the phone...run...they don't know what they are doing.
I keep hearing about people filing bankruptcy to stop a foreclosure. Is that true?
Answer: It depends; I know it sounds like a lawyer answer. But it's true. Unfortunately, there are many attorneys out there that are filing bankruptcies without informing their client of facts and legal implications. Although technically filing a bankruptcy will stop the foreclosure, it is only for a short amount of time. Eventually in about 30 days the client will have to continue to move forward with the bankruptcy. If the client only wanted to stop the foreclosure and doesn't have enough grounds to continue with the bankruptcy, then the lender will end up taking the house either way. A good bankruptcy attorney will conduct a full analysis of your entire financial situation. They will not only be interested in stopping the trustee sale, but they will also be interested in your financial future and explain your options thoroughly. Ultimately, the short answer is, filing a bankruptcy for no other reason than to stop a trustee sale is more than likely not your best option. After a foreclosure you normally have at least 30 days which is about the same amount of time a frivolous bankruptcy filing will give you.
How do I protect myself from scams?
Answer: Here are a couple of quick tips for avoiding foreclosure scams:
a. Never pay a fee for information or consultations on Making Home Affordable Programs
b. Beware of any person or organization asking you to pay upfront for their services or consultations. Don't pay - walk away! There is plenty of free help.
c. Beware of promises or guarantee's to "save your home from foreclosure.
d. Do Not sign over the deed to any person or organization claiming they will save your home. This is the biggest sign of fraud!
e. Never make your mortgage payments to a third party that is not your lender. If any time of new payment arrangement is made then you will receive a copy of that agreement in the mail directly from your lender.
f. Get a copy of EVERYTHING that you sign.
g. Don't be afraid to ask questions and investigate the people who you seek help from
h. Interview at least 2 professionals or organizations to help you before you decide what option to take.
i. Take time to educate yourself.
For more detailed information on scam alerts, or if you suspect you have been a victim of fraud visit http://www.loanscamalert.org or call the HUD at 888-995-4673.
"It was at that moment" started Rebecca, "the moment that I looked at Mr. Torres crying there in my office that I knew I had to do something." Eventually Mr. Torres and his family made it through their ordeal and are happily continuing their lives by getting the right help. However, they sparked a drive in this trio to get the word out in the community about the various scams out there preying on desperate homeowners.
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