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Facing Foreclosure. Latest foreclosure statistics. 1 in every 113 homes in foreclosure. 1 in every 240 homes in foreclosure. County with highest rate of foreclosure filings in FL?. 1 in every 72 homes in foreclosure. Foreclosure Process. Default by Borrower. - PowerPoint PPT Presentation
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FacingFacing
ForeclosureForeclosure
1 in every 113 homes 1 in every 113 homes in foreclosurein foreclosure
1 in every 240 homes 1 in every 240 homes in foreclosurein foreclosure
County with highest County with highest rate rate of foreclosure filings in of foreclosure filings in FL?FL?1 in every 72 homes in 1 in every 72 homes in foreclosureforeclosure
Latest Latest foreclosureforeclosurestatisticsstatistics
Default by BorrowerDefault by Borrower
WrittenWritten Notice from Lender Notice from Lender
Intent to AccelerateIntent to Accelerate
Foreclosure ProcessForeclosure Process
Failure to make monthly Failure to make monthly paymentpayment
Notice of defaultNotice of default
Right to reinstate or cure defaultRight to reinstate or cure default
Right to dispute validity of debt within Right to dispute validity of debt within 30 days of notice in accordance with Fair 30 days of notice in accordance with Fair Debt Collection Practices ActDebt Collection Practices Act
Foreclosure complaint filedForeclosure complaint filed
Service of summons and Service of summons and complaintcomplaint
Foreclosure Process cont.Foreclosure Process cont.
Foreclosure Process cont.Foreclosure Process cont.If Borrower does not file answer or If Borrower does not file answer or response to Complaint: response to Complaint:
Lender will likely eventually ask Court for Lender will likely eventually ask Court for Summary Final JudgmentSummary Final Judgment
Lender may ask Court for Default Final Lender may ask Court for Default Final JudgmentJudgment
If Borrower files response to If Borrower files response to Complaint:Complaint:
Lender may ask Clerk to enter DefaultLender may ask Clerk to enter Default
Borrower receives notice of Default Borrower receives notice of Default entered by Clerkentered by Clerk
Foreclosure ProcessForeclosure Process cont.cont.
Final judgment of foreclosureFinal judgment of foreclosure
Sets forth the amount due to Lender Sets forth the amount due to Lender and will list instructions for sale of and will list instructions for sale of mortgaged property at a public auction mortgaged property at a public auction typically 30 days after entry of final typically 30 days after entry of final judgmentjudgment
Deficiency judgment:Deficiency judgment:
Difference between fair market value Difference between fair market value of property on foreclosure sale date of property on foreclosure sale date and what you owe Lenderand what you owe Lender
Lender must request in Complaint and Lender must request in Complaint and judgment must reserve court’s judgment must reserve court’s jurisdiction to enterjurisdiction to enter
Lender mustLender must obtain within one year of obtain within one year of final judgment of foreclosurefinal judgment of foreclosure
Foreclosure Process cont.Foreclosure Process cont.
Alternatives to ForeclosureAlternatives to Foreclosure
Loan modificationLoan modification**
ReinstateReinstate
* * Typically requires hardship letter, explaining Typically requires hardship letter, explaining circumstances that caused you to fall behind, circumstances that caused you to fall behind, and details of your financial situationand details of your financial situation
Add unpaid balance to the principal of Add unpaid balance to the principal of your loanyour loanTemporarily reduced or waive payments Temporarily reduced or waive payments (forbearance agreement)(forbearance agreement)
Must pay all amounts owedMust pay all amounts owed
Alternatives to Foreclosure Alternatives to Foreclosure cont.cont.
Sell the propertySell the property
Short saleShort sale**
* * Typically requires hardship letter, explaining Typically requires hardship letter, explaining circumstances that caused you to fall behind, circumstances that caused you to fall behind, and details of your financial situationand details of your financial situation
Lender agrees to accept proceeds Lender agrees to accept proceeds of short sale and typically forgives of short sale and typically forgives the remaining debtthe remaining debtMay be tax ramificationsMay be tax ramifications
Deed in lieu of foreclosureDeed in lieu of foreclosure**
Convey Borrower’s interest in Convey Borrower’s interest in property to lender typically in property to lender typically in exchange for forgiveness of debtexchange for forgiveness of debt
* * Typically requires hardship letter, explaining Typically requires hardship letter, explaining circumstances that caused you to fall behind, circumstances that caused you to fall behind, and details of your financial situationand details of your financial situation
Alternatives to Foreclosure cont.
May be tax ramificationsMay be tax ramifications
Strategies for Working with Strategies for Working with LenderLender
If foreclosure action has been filed:If foreclosure action has been filed:Contact attorney representing lender Contact attorney representing lender to obtain authority to contact Lender to obtain authority to contact Lender directly to discussdirectly to discuss your alternatives to your alternatives to foreclosureforeclosure
Contact lender’s Loss Mitigation Contact lender’s Loss Mitigation departmentdepartment
Follow-up with Loss Mitigation Follow-up with Loss Mitigation Specialist assigned to your file Specialist assigned to your file regularlyregularly
Government’s Mortgage Government’s Mortgage Relief ProgramRelief Program
Federal government launched theFederal government launched the Hope Hope for Homeowners Program on Oct. 1, for Homeowners Program on Oct. 1, 2008 2008
New mortgage will not exceed New mortgage will not exceed more than 90% of new appraised more than 90% of new appraised value of homevalue of home
Refinancing with FHARefinancing with FHA
Hope for Homeowners Hope for Homeowners ProgramProgram
VoluntaryVoluntary program for lenders program for lenders
Initially projected to help 400,000 Initially projected to help 400,000 struggling homeowners avoid struggling homeowners avoid foreclosure over three yearsforeclosure over three years
Certain eligibility requirements must Certain eligibility requirements must be met by Borrowerbe met by Borrower
Hope for Homeowners Hope for Homeowners Program cont.Program cont.
More information call 1-800-CALL-More information call 1-800-CALL-FHA (255-5342)FHA (255-5342)
Since inception of program less Since inception of program less than 150 applications have been than 150 applications have been receivedreceived
New relief programs recently New relief programs recently announced by Freddie Mac and announced by Freddie Mac and Fannie Mae, Citigroup, JP Morgan, Fannie Mae, Citigroup, JP Morgan, and Bank of America who acquired and Bank of America who acquired Countrywide FinancialCountrywide Financial
Foreclosure ScamsForeclosure Scams
They may promise to: They may promise to:
Filing of foreclosure action tips off Filing of foreclosure action tips off scam artists that you’re in troublescam artists that you’re in trouble
Save your creditSave your credit
Cure the defaultCure the default
Give you some money if you sign your Give you some money if you sign your house over to themhouse over to them
If it sounds too good to be true, it If it sounds too good to be true, it is!is!
Impact on Borrower’s Impact on Borrower’s Credit RatingCredit Rating
Payment 30 days late or more:Payment 30 days late or more:FICO credit score may drop FICO credit score may drop approximately 100 pointsapproximately 100 points
Short Sale:Short Sale:FICO credit score may drop FICO credit score may drop approximately 200 points or moreapproximately 200 points or moreMay be able to obtain loan for new May be able to obtain loan for new home within 2 yearshome within 2 years
May appear on credit report for 7 May appear on credit report for 7 yearsyears
Impact on Borrower’s Impact on Borrower’s Credit Rating cont.Credit Rating cont.
Deed in lieu of Foreclosure:Deed in lieu of Foreclosure:FICO credit score may drop FICO credit score may drop approximately 250 points or more approximately 250 points or more Will appear on credit report for 7 yearsWill appear on credit report for 7 years
Foreclosure:Foreclosure:FICO credit score may drop FICO credit score may drop approximately 125 to 175 pointsapproximately 125 to 175 pointsWill appear on credit report for 7 Will appear on credit report for 7 yearsyears