FORECLOSURE PREVENTION: MYTH OR MAXIM?

“Stop foreclosure, call 1-800-bla bla bla”:

We see signs all over the place. Can they really stop foreclosure or not?
As I write this article today July 2, 2009, the Washington Post reports that US employers have gotten rid of 467,000 jobs in June 2009, suggesting an increase over the 9.4% in May 2009 to the unemployment rate to 9.5%. New York’s Unemployment rate as at May 31, 2009 was 8.2%.

A new wave of adjustable rate mortgages are now adjusting upwards and that means that interest rate on a lot of sub-prime loans are going up which means that monthly payments on mortgages are going up and therefore, coupled with the unemployment spike, foreclosures will be going up too. Not a pretty scenario. Not a myth, that’s a maxim.

So, can a distressed homeowner prevent foreclosure and if so, how can one prevent foreclosure? Let’s face it; someone is facing foreclosure on a property because they are in some sort of distress, more than likely, financial distress. There are really 6 ways to prevent or avoid foreclosure once you have missed a payment:
1) Pay off the arrears
2) Sell the house
3) Refinance the loan
4) Obtain a loan modification
5) Deed in lieu of foreclosure
6) Short sale

Pay off the arrears if you can get your hands on the money but if you can’t, sell the house if you have equity in it. That is difficult in today’s market with falling property values, you’d be lucky to get a buyer willing to pay the price sufficient to pay off your mortgage.

Refinance if you have good credit and some equity in the house because, if not, you have to apply for a loan modification. Your fico score would not be an issue but income is as regards obtaining a modification of the terms and principal balance on the loan. (email me for a free guide to applying for a loan modification)
Handing the title for the property over to the lender may prevent foreclosure, however, the lender may not discharge the debt especially if there are other lien holders involved. You should consult an attorney to be informed of the legalities of such a move, in fact, for all the actions noted here.

Normally, homeowners in distress do 3 things; (a) try to do a refinance. (b) if credit is not good and property under water, try to get a loan modification. (c) if credit is not good and there is insufficient or too much income, those are issues, a short sale is the final action to avoid a foreclosure.

A short sale reduces the time you spend out in the cold. That is, a foreclosure on your credit will prevent you from obtaining a loan for a period of 5 to 10 years while a short sale reduces that waiting period to about 2 years.

So what is the government doing to help out homeowners in distress? First started in Philadelphia and rolled out in New York June 2008, the Foreclosure Settlement Conference began in 5 New York counties; Kings, NY City, Nassau, Erie and Monroe.
Under the Residential Mortgage Foreclosure: Promoting Early Court Intervention June 2008, issued by the New York State Unified Court System, a property must meet the following 4 critieria:
1. Must be owner-occupied residence.
2. Must be one to four-family residence.
3. Mortgage must have been originated between Jan. 1, 2003 and Sept. 1, 2008.
4. Mortgage must be a sub-prime, non-traditional or high cost loan.

The court mandates that the plaintiff/lender identifies eligible cases and provide the homeowner’s contact information when filing their case with the court. They should also, when sending summons to the homeowner, include “Help Homeowner in Foreclosure” form. The court will then schedule Foreclosure Settle Conference within 60 days after borrower was served with the court papers. The court’s notice will provide contact information for local organizations that have agreed to provide homeowners with legal assistance, financial counseling plus brochures on the foreclosure process, offices for the self-represented and online help resources.

Additionally, the notices should be accompanied by a “Request for early Conference” for and when completed should be mailed to Foreclosure Conference Part. In order that the request is placed on the court’s calendar, the homeowner is required to confirm that he/she have scheduled an appointment for legal assistance or housing counseling with a service provider, or if not, they have to explain why this was not done.

The conference does not alleviate a borrower of their obligation to respond to the lenders’ papers in a timely manner. It is best to consult an attorney at this time; however, if you attend the conference without one, you may be entitled to a court-appointed lawyer.

So here’s what will be discussed at a conference;
1. The rights and obligations of the parties.
2. Whether the parties can reach a resolution to avoid foreclosure.
3. Evaluation of workout/settlement options eg. Payment schedules or loan
modification.
4. Plan to streamline subsequent court proceedings if settlement cannot be
reached.

There are a number of free or low cost services made available to homeowners in distress to help them understand their rights and the legal process, to help them find out about options to save their homes, and to help them decide the best course of action given their particular situation.

So, my friends, is foreclosure prevention a myth or a maxim? I think both.

Resources: www.courts.state.ny.us/litigants/foreclosure, www.nysdhcr.gov, www.hud.gov/foreclosure

Paul Martin is an Entrepreneur and Real Estate Investor specializing in short sales.
entrepreneursmindset@gmail.com

July 3, 2009

MINDSET: THE ART OF SETTING THE MIND

Webster’s II New College Dictionary defines mindset as: A mental disposition or attitude that predetermines one’s responses to and interpretations of situations. Everyone chooses their own attitude; negative attitudes bring about negative responses to and negative interpretations of situations, the converse can be said about positive attitudes. So if one wants positive outcomes one must choose positive attitudes. It’s all in the mind.

Our ultimate desire is to feel happy whether we realize it or not. No one ever born ever had a desire to feel bad or unhappy. We all want to feel good but do we always choose the attitude that brings about that end? So then, it makes sense that, whatsoever it is in life we want to achieve, we begin with the end in mind. That end is to feel good. We have to set our mind to feel good, but how do we do that? Take to heart this famous quote; “Whatever you desire is in your head, just think about it and feel it.” Paul Martin.

Dr. Joe Vitale, author of The Attractor Factor and The Key has given some tips as to how we can set up our minds.
1. Know what you don’t want.
2. Know what you do want.
3. Get clear about what you want. Make it your intention.
4. Feel your intention already achieved. Get into an attitude of gratitude, giving thanks. Have real faith.
5. Let go… that is, don’t think about how you will achieve.

On one sheet of paper write down all that you don’t want in your life, all the negatives that are there now. Feel the emotions associated with the situation(s). Feel the bad feelings, because you want to get rid of them once and for all. The more you allow yourself to feel them, the more you release them.
Put that sheet aside and take another sheet of paper and write how you want that situation to be. Feel the joy of achievement as you write just as you felt the bad feelings so you could release them. Now experience the positive emotions, create a new picture to deposit into your mind. The more you immerse yourself in this new image and feelings, the faster you will manifest them. It all starts in the mind.

Now look at what you wrote on the 1st sheet and then tear it to bits and trash it, getting rid of those negative emotions. Take sheet 2 fold it up and carry it around with you for a week, deposit the contents into your subconscious, feeling good, giving thanks.

After trashing those bad feelings, you still have to do something to achieve your dreams. You want to take Inspired Action…any action taken based on a gut feeling or intuition. Have you ever felt an urge to go talk to a stranger or go to the corner store? Inspired action takes you closer to achieving your dream. Recognize the signals.

Place good images in your mind and you will have good feeling thoughts. Look around at people and things, there is something to appreciate. Once you start to
appreciate people and things around you, you will be happy, you will feel good.

Remember, our ultimate goal is to feel good. So we begin with the end in mind.

Potential Desires

Do your desires have potential? Or does your potential carry with it, desires? A tremendous number of people have great potentials which are for the most part, unfulfilled. They merely exist in jobs and professions that stunt them rather than enhance their growth. Quite a few actually don’t like what they are doing for a living but there is some sense of security; a misplaced comfort. We sometimes trap ourselves in situations we are familiar with but don’t like, rather than explore something new that we don’t know but may fall in love with. Will I step out of the old box and dare to reach for the sky? I am afraid of heights so I won’t go to the 50th floor. I believe that the knowledge, skills and drive within us are the qualities that make us great and we can exponentially multiply these qualities by investing time, effort and money in ourselves. What better investment can we make than in ourselves? If you believe that there is nothing better that investing in yourself, shouldn’t you commit to practicing this as often as possible? I think it was Benjamin Franklyn who said “Empty the coins in your purse into your mind and no one can take it from you.” Another version ends a little differently, “Empty the coins in your purse into your mind and your mind will fill your purse with gold.” My thought is that some of us accept and accommodate our own poverty (guilty as charged), but change of mindset can encourage us to exert more effort in investing more into ourselves so that we get ahead and get more. It is time for change; yes we can, because change is constant. I ask people what it is that they really want and they begin their answer by stating what they don’t want. You should stop thinking about what you don’t want because that is what you will get. Focus on what it is you do want and that is what you will get. Change your mind, invest in it and you shall see your life improve beyond your wildest dreams.

Creating Our Own Futures

In today’s society we see firms failing, bank bailouts, housing busted bubble and a mortgage meltdown. In many communities across the U.S. there is an extermination of employment and a crushing of credit, so now, more than ever, people are fearful for their futures.

How do we combat these negatives? How do we save ourselves from drowning in this tempestuous sea of disaster? And how do we find safe ground? When will we be able to awaken from this nightmare and start to dream the American Dream again? These are serious questions being asked all across the states by single mothers, jobless fathers, retirees and veterans.

Many people are going back to school, retooling themselves to become more marketable within different industries and sectors of the society. Others are turning to home businesses, micro, small and medium-sized enterprises. A lot of people are being forced to re-locate their families. All are seeking a better life, a way out or a bailout, more opportunities (dwindling they are).

The old adage “the harder you work the more you succeed” just doesn’t hold true in these times, does it? The new adage “work smarter not harder” may hold some truth for us now. More millionaires were made after the 20^th century depression; will that be the case after this 21^st century recession?

How many of us can spot a good opportunity if it slapped us in the face? Many of us sit waiting for an opportunity to come along and we were still not prepared when it finally came along. Let us no longer sit and wait for opportunities, let us begin to create our own for our futures.