Homeowner in Distress

Hello I have a friend who lives in Colorado, he is currently three months behind in his mortgage payments, he is afraid of going into foreclosure. He only owes 100,000, but he is afraid if he sells now, he won’t get the full 300,000 it’s worth. He should be back to work soon, but right now, the bank just won’t work with him. Do you guys have any solutions?

Wow noone is jumping in on this…

Hi - My name is Claudine and I am a loan officer out of Nevada, but I am licensed in Colorado as well. I happen to specialize in pre-foreclosure bailout. As long as he has an equity base of 70% or better we have several lenders that will look at situation. There are even programs that are set up to provide the loan as a refi/cash out (12 months of payments in escrow). This enables the homeowner to be able to concentrate on paying off other debt and getting caught up while being assured that the mortgage payments will be made and at the end of the 12 months they can refinance into a better rate and move forward

Thanks and good luck!

I have several options that are actually in the best interests of the owner. With that kind of equity he should have no problem pulling some cash out. Look at a HELOC that he could use to make his payments until he gets back on his feet or until he can sell the house for FMV. Look at the large institutional lenders like Wells Fargo, their rates are very competitive and have very low fees unlike most independant brokers. Have him borrow money from a family member if possible (write a note with interest using the property as collateral if necessary). Or you can have someone take advantage of him and strip a bunch of equity of which there will be many people willing to do because he is in a bad situation.

I have nothing to offer except advise but I am local and know some good people in the area. The market is very soft in Colorado especially in the Denver metro area but with good marketing he should be able to sell the home in a few months if that is what he would like to do. The only problem with his sitaution is that he has waited this long to take action. Just be creative and the options are endless. He is fine at this point it is just unfortunate that he may have to lose some of his equity to get things caught back up.

There is no reason for him to consider a bailout that involves several refis over the next 12 months that could potentially cost him 10 15 20k who knows how much just in fees and closing costs. One refi to pull cash out maybe. He could take a bunch of extra cash out use what he needs put the rest in a pass book savings account and then when his situation is better put the extra cash back towards the principal or put it into another property (what I would do). But anyway…

You also said that the bank won’t work with him. Of course they won’t, if he forecloses, they have a property they can REO worth 300k with a note of only 100k nice chunk of change for the bank! If it was me I would have someone get in contact with the bank other than him that can negotiate and discuss options. Of which will be the following. Foreclose, Deed in lieu (most banks wil only consider after they have attempted to sell on their own for 90 days), forebearance (probably the best option in my opinion) to bring the mortgage current, or pay the back payments and penalties to bring the note current (not an option or else he wouldn’t be behind on payments in the first place).

I hope this has been helpful. :slight_smile: