Most people that are facing foreclosure can get easily overwhelmed and feel like nothing can be done to salvage the situation. Millions of families have been in the same boat as you over the past few years. Some people have done nothing, and lost their house. Some families have fought to the bitter end and won. You can work through foreclosure, but you are going to have to do some heavy lifting, or have a professional do the heavy lifting for you.

There are a range of options that are available today that weren’t available a few years back. Today, we will go over a few of these options, and we will dial into more in depth solutions in the following posts.

The first thing you MUST do is SOMETHING. That may sound weird to you, but there are people who go into “foreclosure” avoidance mode and wind up losing their house when other options were available to them.

Foreclosure Options:

1. Sell Your House
If you have equity, and time, the best thing to do might be to go a traditional route and hire a professional real estate agent that specializes in distressed property. There is a company that specializes in helping people Sell Their House Fast

2. Short Sale Your House
If you are upside down on your mortgage, meaning you owe more than the home is worth, one avenue to explore is having a short sale on your house. A short sale is when you get the mortgage holder to accept less than the stated mortgage. To get this facilitated, reach out to a local short sale expert. In the next few weeks, we will introduce some of the top short sale experts in the country to you.

3. Apply for a Loan Modification Program
A load modification is when the mortgage holder modifies the original terms of the mortgage note. Sometimes the mortgage holder will reduce the monthly payments temporarily to help you if this is a short term trouble spot for you. The note holder might adjust your APR (annual percentage rate), this will reduce your monthly payments.

Another type of modification is when the mortgage holder takes all of the payments that you are behind and parks it on the back of the mortgage. This is a grace period and the back payments will still have to be made. Loan Modifications can come in all shapes and sizes, and we will explore these in depth as the weeks go on.

4.Offer your Bank a Deed In Lieu of Foreclosure
What this basically means is that you give the keys and all interest in the property back to the bank. This was once a popular tactic used by the banks because most homes in foreclosure a few years back had equity built in. The banks would sell the home and keep the profit. Today, less and less banks will accept a deed in lieu.

5. PICK UP THE DANG phone and call your mortgage company. Explain your situation, and ask them what special options they have for you. Banks DO NOT want to take your home via the foreclosure process. You will find a much more responsive loan officer on the phone today than you would have 3-4 years ago.

6. You can file bankruptcy
There are different types of bankruptcy and every state has different laws on the books. We will have state and national specialists post the various pros and cons of bankruptcy.

7. Strategic Default

When all else fails, and you have tried to sell your house, work with the bank, and do everything else you can, strategic default is always an option, although it is one the we would only recommend to a slight fraction of the homeowners facing foreclosure.

Our next series of posts will be on short sales, the process of short sales, and how to find a short sale expert near you.

I am facing foreclosure – Homeowner Story

After 33 years working for the same company, I ended up on permanent disability due to 4 heart attacks and a stroke. Refinanced my house in August 2004 in order to be able to handle payments and pay off some bills.

Thought I was taking out a 30 yr fixed with Ameriquest, but realized when it was too late that it was a 30 yr fixed with an adjustable down the road.. In any case, my mortgage has reset 3x since October, 2006 and is scheduled to reset in April, 2008.

I am currently behind one payment in my mortgage which was recently switched from AMC Mortgage Company to CitiResidential Lending Services. The reason I am behind a payment is because I was suppose to get refinanced in November to an FHA Secure loan, however, when they ran my credit report, they said it was too low. I ran my report and it was in the 500′s but they use their own process of reporting.

In any case, we were rejected for the FHA secure loan because of credit. As a result, I had spent my intended Nov. Mortgage payment on other bills that we had fallen behind on.. This was a result of my husband out of work for 2 months because of double hernia surgery and when he returned to work, they laid him off..that was March through August, when he got another job at the end of August and we had to play catchup…

Anyway, we are paying our mortgage which, however, December won’t be paid until Jan 26th..and then come Jan.. 31st we’ll be late with January..We don’t have the $2500. to pay the month behind. I did do the right thing..when I found out we couldn’t make the November payment, I contacted CitiResidential Lending right away and explained the situation to them..at that point in time my mortgage was in good standing and there was nothing they could do until I was late and fell behind..they told me to wait. I asked if I could contact the actual holder of the Mortgage to discuss possible modifications or repayment options..they told me the mortgage holder is Washington Mutual, but they are an investor and I cannot talk to them…

so what now… I went on on-line to HOPE.com and completed a credit counseling session..there is a company that is trying to help me, but they got the same answers I got from CitiResidential. I filled out a financial analysis and faxed it to CitiResidential in December and they said it would take 4-6 weeks to review and see if I qualify for any modification.

Today, they told me and the credit counselor that it’s still being reviewed..and that based on my current financial status I can not enter into a repayment plan of the late month because we don’t make enough money monthly. They have issued a letter of intent to foreclose which will expire on 1/8/08…we are between a rock and hard place..what do we do if there is no mortgage holder to talk to, only the mortgage servicing company?

They don’t seem to want to help..

Right now I”m at 9.45% paying $2509.00 for my first mortgage and an equity mortgage at 5.5% for $497.00 per month for a total of $3,000.00 a month…If they could just modify my first mortgage to a fix rate..or if I could get an FHA secure loan at a lower rate we would be okay. I’ve owned my home for a little over 19 years and was late for the first time with my mortgage payment in 2006..then got it back on track until this happened in November 2007…

Any suggestions on what to do….I can afford my house if someone would just give me a lower, locked in rate…Please help…

Read the rest of the story here and see what happens to this homeowner in the forum.

Do you need free foreclosure help or assistance in obtaining a loan modification? Please join our one of a kind homeowner’s forum where you can ask questions and get answers in this unique and interactive community that was created to assist people in an anonymous, yet open question format. Meet other homeowners that are trying to stop foreclosure and get the help you need from industry experts and foreclosure defense and mortgage law attorneys.

Click on the banner to enter the forum

Countrywide Foreclosure Assistance – Homeowner story submitted by Jennifer  

I have been dealing with Countrywide Home Loans since 10/07. I spend more time stressing than anything else these days. We are 3 months behind in the foreclosure process because of increased escrow. I get the run around from countrywide and never talk to the same department no less the same person. I went to HUD the helped with this repayment agreement of 4x the original payment. I felt like even in the HUD office the Countrywide rep (California Office) controlled everything and heard nothing. Now we have a huge payment. We can make a larger payment but not 4x times larger.

They finally agreed on a repayment for the negative escrow, but like I said it is 4x larger. My husband works at a hospital, I do home health mostly hospice patients. My income varies. I have not gotten the paper work yet, and am frightened by what it might say.

I need help I am not internet smart and landed here by the grace of God. Many of the terms and words I read here I do not understand. I think I even posted this wrong to start. I have no idea where to go or what to do. It is easy to tend to a person in the last part of their life, give love and care you get it back 10 x 10 … but this ……… I am loosing the family home fast.

There is nothing to make you feel more like a looser than to loose your home. This battle takes the life right out of a person no less the will to fight.

I just need someone at Countrywide to give me assistance before I go into foreclosure to listen someone who wants to keep us in our home.I do not know how to get there from here.

Please help with any info #’s advice a step by step guide………….

Jennifer

Here is some advice from Moe -

Jennifer,

Never agree to take terms that you cannot afford. You would be just setting yourself up for failure and once you sign this plan, I am sure you are signing your rights away to ever bring suit against Countrywide.

Remember, this can be like a game of cards and their job is to make you jump through hoops and to protect themselves, NOT you. Your job is to protect you. Just because they offer you something does not mean you have to comply and take it. I have seen this happen many times. They may be bluffing. Cal the bluff and tell them no. This will not work and they can just take the house if they are not going to give you a long term plan for which you can afford.

As I say in almost every reply, you need a Qualified Written Request to be sent to them and you want a life of loan history of every penny you have ever paid Countrywide and a detailed description of where every darn penny went and while you write that letter you might as well ask for every darn paper you have ever signed with them that pertains to your loan.

Make them work. They don’t like to work when they have a million other people to work with. So, most likely you will win the hand, your bluff worked and you get a plan you can afford.

Do you have questions about Countrywide or any other lender or servicer, need free foreclosure help  or assistance in obtaining a loan modification, then please visit or forum at LoanSafe.org for live support and expert guides to help you through the foreclosure process. 

Please click on the banner to enter the forum

LoanSafe.org is a support community that is built around the premise of paying it forward. These homeowners were able to stop foreclosure with the assistance of this great website and the community. We hope to have more success stories in the future and please consider joining our fight to save our homes from foreclosure.

Success Letter of the Year – See a real Countrywide loan modification letter from the office of Angelo Mozilo

All testimonials are 100% voluntary and not solicited in any way, shape or form.

Bob – Homeowner from San Diego - I have finally got my loan fixed for 5 years @ 5.99%. Fully amortized loan..principal and interest. After almost 6 months of doing battle with Countrywide I am done. I have to make two more payments (Jan. and Feb.) at 7.45% but then in March 08 it goes back down to 5.99% saving me $610.00 a month! Great news!! I do not even have to sign any paperwork. They said it is a done deal and I will probably receive a letter in the mail today.Here is a link to my original thread: http://www.loansafe.org/forum/showthread.php?t=162

Hopefully 5 years will buy me enough time to pay down my second mortgage and put me in a good position to refi. I want to thank Moe, Brian and all the forum members for all your help and encouragement. I never would have been able to keep my home if it wasn’t for the knowledge I gained from www.loansafe.org.

Thank you all so much!! 

Do not give up!! Keep up the fight!! If anyone needs any help or advice in dealing with CW from someone who has been through it, just drop me an email at bob@slaytonmechanical.com and I will do whatever I can to help.Paying it back and forward is the way to go!

JacMac – Homeowner From New York – I want to wholeheartedly recommend this forum to those who just popped up here or may have been lurking and are scared, unsure — perhaps you’ve just realized you’ve been taken for a roller coaster ride, and the price of the trip is more than they said, more than you can afford — the point is, the forum is a wonderful place, and it is SAFE!

If anyone understands just how difficult it is to obtain a loan modification, they will tell you that getting one is almost like winning the lottery. The odds are severely stacked against you and your chances getting one are close to nil. In fact, you are lucky to even apply for one.

I am fortunate enough to run an online community where I assist people with information about the loan modification process and foreclosure prevention. It’s a place where homeowners can come, share their stories and ask questions without being criticized. Many members have been fighting their lenders tooth and nail for 3 and 4 months. 

Sometimes it takes call after call and then your placed on hold for hours at a time, only to be disconnected and you have to start all over again. They tell you to fax in a hardship letter along with your financials, income and expense sheet, bank statements. You fax it, they lose it. You fax it again, they lose it again. You mail it in. Don’t matter because they lost it again. 

Weeks go by with no returned calls and  a month later you are no further along then when you started. Many people get frustrated and just give up. Many people don’t even make it a month. 1,2 or 3 calls and their done. Foreclosure statistic #1,234,764.

Some people keep calling and keep faxing. They don’t give up and they keep fighting to stop foreclosure because they are determined to save their homes and they are not going to stop until the sheriff comes to kick them out.

Meet Bob, Andrea and Paul. 

Bob

I have finally got my loan fixed for 5 years @ 5.99%. Fully amortized loan..principal and interest. After almost 6 months of doing battle with Countrywide I am done. I have to make two more payments (Jan. and Feb.) at 7.45% but then in March 08 it goes back down to 5.99% saving me $610.00 a month! Great news!! I do not even have to sign any paperwork. They said it is a done deal and I will probably receive a letter in the mail today.

Here is a link to my original thread: http://www.loansafe.org/forum/showthread.php?t=162

Hopefully 5 years will buy me enough time to pay down my second mortgage and put me in a good position to refi. I want to thank Moe, Brian and all the forum members for all your help and encouragement. I never would have been able to keep my home if it wasn’t for the knowledge I gained from www.loansafe.org. Thank you all so much!!

Do not give up!! Keep up the fight!!

If anyone needs any help or advice in dealing with CW from someone who has been through it, just drop me an email at (removed) and I will do whatever I can to help.

Paying it back and forward is the way to go!

Paul 

If you go back an read some of posts I have been worried about my mortgage for a while now. I had originally called in August and asked about it but was told since im not late they couldn’t do anything. Then in October when I called again I was told that I could apply.

After months and who knows how many hours on the phone (I luckily had the time to make all the phone calls or I would have probably used Brians Loan Mod service otherwise) I was finally approved for a 5 yr freeze on mortgage. This site along with the Help of Brian reviewing my docs helped me tremendously. I even had to go as far as threaten to rescind my loan and send respa letters with the violations Brian had found.

I really am very grateful of Moe for this site and Brian for his wisdom and guidance. I feel very stress free right now. I will be staying on this board to help others who were in my predicament too.

 THANKS AGAIN MOE AND BRIAN!!!!

Andrea 

After a long exhausting 4 month battle with Countrywide, I am getting a modification! My interest rate was fixed at 6% for 5 years! I’ll be receving paperwork tomorrow. Please see my story in the modifcation section under “My 16 week workout with Countrywide”. It will drop my payment from $2542.77 to $1818.XX a savings of close to $600.00!! I’ll get to keep my home!

How I did it? I went to the top BUT only after dealing with the Home Retention Team for 4 months and making over 35 phone calls. Within 1 day of sending out emails to everyone under the sun I got a phone call from the office of the president and the modification was a done deal.

My advice: don’t give up, call daily and when you can’t get things done go to the top.

Please email me if you would like to talk more. Thanks to everyone here! Especially MOE and SWIZZ.

Andrea

See more real life success stories by clicking the Loan Safe logo below.

Submitted By Allan

Here are my thoughts:

- any stated income loan shall not be eligible if income stated is more than 10% of real income. I’m sorry but when one signs 1003 income numbers are clearly visible and if one didn’t question his LO he/she not only naive but a accomplice to fraud. The only exception if there is definitive proof that LO doctored original 1003 to overstate income without borrower’s knowledge (forged signature for example).

Burden of proof is on borrower. I’m sorry but he/she will need to prove he/she was not part of fraud scheme.

- any non-owner occupied loans. I don’t give a damn if it was your relatives house. Only loans for primary residences (not even second homes) deserve to be considered for bail out. Speculators that were gobbling up real estate with intent to sell it or otherwise make profit must face the music and realize losses. One can’t expect to invest and keep the profits and wiggle out of losses.

Primary residence owners normally should use home as a shelter and not as investment and in such case residence ownership is net positive for society even if society as a whole will have to subsidize it. And make no mistake, loan modification will cause finance market disruptions that we, taxpayers, will have to pay for. But again, I’m willing to help primary residence owners that were duped into dangerous mortgages.

- any amount on primary residence loan that was refinanced and cashed out, used to pay CC debt, car loans or other consumer debt SHALL NOT be modified or otherwise eligible for bail out. Modification shall apply only to original loan amount plus all the LO fees that were rolled into. Cash outs/consumption debt rolled into loan shall be split out into 2nd loan and it should keep unmodified rate and terms.

 I’m sorry but I’m not going to empathize with people who can’t control personal consumption. I don’t give a damn why you rolled in CC debt or other consumption debt but no freebies here. Possible exception – medical bills. But these are not really consumption debts, aren’t they. Student loans that were rolled could also be excepted. Again, these are not consumption debts in my opinion. Government subsidizes quite a few student loans anyway so it’s a wash in the end.

Contributed By Lucinda From Our Homeowners Forum at LoanSafe.org 

Hi there,

Thank you to everyone who’s contributed to this wonderful site!

If anyone has experience with Litton and their loan modification system, please chime in. Long story short, due to illness and several other abnormal expenses this year we became a good three months behind on our mortgage, in fact a bit more because I kept paying the monthly amount but I wasn’t quite able to make the past due payment. Add the costs of the lawyers and the fees and we’re about $4,000 behind.

Litton offered us a loan modification, and we gratefully accepted.

The problem was that my husband was just coming off of a short-term disability, and we had to wait three weeks after Litton wanted the initial payment for the loan mod acceptance to send it in. We let Litton and Titanium, who they’re apparently working with, know about the delay and they were cranky but said to just send the money in as soon as we had it. We did send it to them, and we attempted to pay the first month’s new payment right on time, but while they kept the initial payment they returned our mortgage payment. I called to ask why and they told me that the modification is still being processed so my house is still in foreclosure, but we’ll be notified ASAP about it. Meanwhile my home is up for Sheriff’s sale on 2/1/08.

We don’t know what to do. The loan modification is perfect for us and we thought we were all set, but we’re terrified that they’ll take our home while still processing the modification!! If anyone has any advice please let me know, thank you so much,

Lucinda

Homeowner Story By Jac Mac at LoanSafe.org 

I am hoping that I’ll have better results with Countrywide than I’ve read so I’d like some support and help along the way. I’ve been reading a lot on Moe’s site and he’s offered so much valuable information, I can never thank him enough.

I almost feel smart again.

My story can be found here Worse than a Pimp (Thanks Moe) and it sure did cause a frenzy of nasty replies from what I am guessing are pissed off LOs.

I am a single parent of two children, fifteen months apart, ages 12 and 13 — the 12 year old happens to be autistic.

I refi’d with CW (biggest mistake of my life) into a — let me take a deep breath, 1 mt. 11th District COFI Option Arm, which the broker offered at an initial interest rate of 1.5%.

We went over what the payments would look like and she told me that the deferred interest would never go past $2,000 a year, as long as I paid the minimum and then the full payment alternatively every other month.

Even though I did that, in ten months, the principal had increased a whopping $12,000.

They also got a YSP of $14,000 which wasn’t disclosed on the HUD — it says 3,500 POC ( I just figured out that means Paid outside of closing).

There’s a prepenalty for six months so I can’t refinance w/o being hit with a $27,000 fee.

Now I’m wondering what was the $10,000 origination fee they got as well. Is that in addition to the $14,000?

It seems pretty clear she sold me into a higher rate, option ARM loan to get her fee.

Now I’m losing equity like crazy and I can’t make the principal payments.

I also posted this in response to a thread but would like to put it here so I can update the story as things happen.

after reading about the nightmare everyone else was going through with calling, I’ve decided rather than play phone tag to have my loan modification done in person, at Countrywide’s Financial Center. I am scheduled to go there on Friday and speak to the Loss Mitigation Department so that they can get my financial information.

I popped in there on Monday and spoke with the manager of the center. She was very nice and called the VP of Home Retention right there in front of me, took down my email address to send him a message and told me if I didn’t hear from him by that afternoon I should call her — she gave me her cellphone number.

So, of course, I didn’t hear from him. Tried to call her, but couldn’t get her. Left a message but didn’t hear back. So I called first thing in the morning, and caught her on her cell. She was pleasant, said she’d call me when she got to the office and give me Mr. Durham’s direct number. Supposedly he’s very proactive in Loan Modifications.

When I didn’t hear from her by noon (about four hours later), I took a walk — fifteen minutes, and I was at her office.

She smiled, but I don’t think it reached her eyes. I want her to know if she doesn’t call me back I WILL be at her office and can be there in minutes.

She called the Loss Mitigation Department for me right then and there in her office and had me speak to another woman, Paula Edwards, and she has committed to fax all the documents that need to be sent for me. She’s also offered to look over my loan documents for me. The manager of the office seems sincere but I am jaded.

Ms. Edwards told me that they called in the morning and spoke to a Mister, a bilingual man — I cut her off and told them there WAS NO MISTER and I made it clear to her that I have zero interest in playing phone tag with anyone. I gave her my cell phone number and told her to call me at that number, but told her I’d be doing all of the paper work in office at the center.

Hopefully this will turn out to be a smart decision. I’m keeping my fingers crossed for myself and for all of us struggling to end this nightmare.

Anyone have any suggestions as to exactly what financial information I should bring with me to the meeting on Friday. I am a self employed freelancer who’s suffered a slow period in my market. I own a S Corporation, so I don’t have my 1099s for 2007 yet — only what’s been deposited in my business accounts can be shown by way of bank statements.

I also have two tenants, so I can show the income from the rental units but other than that, I have no pay stubs or anything like that. My mortgage payment has adjusted to 8.0 percent which puts me at a $5,300 full principal payment per month. The minimum is just $2,000 and if I only pay that, you know what that means — negative amortization. If I keep pulling money out of my savings to meet the payments I’ll have nothing left real soon.

I need a fixed mortgage and quickly!

Where there is money to be made, you will find the predators, salivating at a new opportunity to take people’s money and run. Welcome to the homeowner loss mitigation business where the sharks are having a feeding frenzy on already wounded homeowners.

The Better Business Bureau has recently reported that they have received complaints from every state and has issued an alert to warn consumers to be cautious about foreclosure-rescue companies.

Mar Dann, Ohio Attorney General has received hundreds of complaints. “The sad part about this particular offense,” Dann says, “is that (the homeowners) lose everything. You lose the little bit of money they had squirreled away, you lose your house and you lose your hope. How do you quantify that?”

In August, Dann filed complaints against six companies, including American Housing Authority and Foreclosure Assistance Solutions, and he says he expects to bring a half-dozen more cases.

Here is some quotes from a recent USA Today article:

Regulators and law enforcement in many states are targeting the two most common forms of foreclosure rescue scams: “equity skimming” and bogus or fruitless consulting services.

The first scam works like this: A company offers to take legal ownership of the home temporarily. The homeowners pay “rent” to the company, which promises to return legal ownership to them once they regain their financial footing.

But all too often, con artists either borrow as much as they can against the equity in the house — and collect the rent from the original homeowners but never make any mortgage payments. The property still goes into foreclosure, and any equity the homeowner had built up is gone.

The second most common foreclosure-rescue pitch goes like this: A company offers to renegotiate the homeowners’ mortgage with the lender or help refinance the property. In exchange, they charge an up-front fee, typically $800 to $1,200.

Frequently, though, the company never contacts the lender, or knows the borrower can’t qualify for another loan. What little extra cash the homeowner could have used to pay the mortgage or move to an apartment has been wiped out.

Homeowners need to be aware of these scams and what to look out for.

IamFacingForeclosure.com plans to expose the predators and educate homeowners about the legitimate foreclosure prevention services that are available to them.

If you are looking for a consumer advocate attorney, you can visit www.NACA.net .

The National Association of Consumer Advocates (NACA) is a nationwide organization of more than 1000 attorneys who represent and have represented hundreds of thousands of consumers victimized by fraudulent, abusive and predatory business practices. As an organization fully committed to promoting justice for consumers, NACA’s members and their clients are actively engaged in promoting a fair and open marketplace that forcefully protects the rights of consumers, particularly those of modest means.

You can also search for a Non-Profit Certified HUD Counselor to stop foreclosure here.