Foreclosure info

How do I find someone who will help someone with bad credit refinance to save home from foreclosure?

You don’t.

The reason they have bad credit is because they didn’t pay their bills.

What makes you think that’s going to change now?

You need to contact their current lender immediately and ask for “special forberance.” Forbearance is a payment arrangement that is worked out between the borrower and the bank to catch up on back payments and penalties. The borrower must have a reliable source of income.

You will need to write a formal letter to the lender explaining the financial hardship and include any special circumstances, like divorce, job loss, medical issues, etc. You need to send the letter along with the following other supporting documents:

  1. Hardship letter
  2. Latest bank statement
  3. Latest paystubs
  4. List of all current expenses
  5. List balances of all debts (mortgages, cars, credit cards, etc.)

Be as accurate to the dollar as possible. The bank will assign a loss mitigator who will take all the financial information and calculate certain things from the documents you provide. They will decide if the source and amount of current income is feasible given all the expenses, including the mortgage currently in default. You can then negotiate the amount to pay each month until the missed payments and penalties are paid up. Forbearance arrangements can be anywhere from a couple of months to up to a year.

On the borrower’s part, he/she needs to prioritize their expenses, putting the mortgage (and keeping the house from foreclosing) as the highest priority. This may mean selling the 2nd or 3rd car, stopping cable TV, stop eating out, fire the nanny, take the kids out of private school, cut up the credit cards, etc. A serious change in money behavior will have to take place with the borrower if he/she wants to keep this house.

Good luck!