8 WAYS TO AVOID FORECLOSURE

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1 8 WAYS TO AVOID FORECLOSURE A Free Consumer Guide In this report, you will discover: The #1 Secret Your Lender Doesn t Want You to Know 8 Common Ways to Avoid Foreclosure How the Foreclosure Process Works 3 Key Questions to Ask Yourself When Evaluating Your Options 100% No Risk Guarantee An Educational Resource Provided By:

2 Dear Homeowner, Getting a notice of default letter from a lender is one of the most stressful experiences a person can have. Add to it that you may feel your family s home is at risk, and the fear, anger and helplessness can be overwhelming. We empathize and understand how difficult this can be. However, there s good news: there are several potential options that may help you avoid foreclosure. We ve witnessed many homeowners overcome this challenge successfully, and we know you can too. We wrote this piece because we wanted to help provide homeowners like you with information about the foreclosure process. The goal is that whatever decisions you make, that you feel confident they are the right decisions for you and your family. Our hope is that the information you will discover inside this free report will shed light on the many aspects of foreclosures and will provide ideas that may help you avoid foreclosure. Here s to the next chapter in your life. We hope you find this guide useful in helping you move forward. Sincerely, Jeff Stephens and Darren Stowell Principals Abound Properties, LLC

3 What Is Foreclosure? When you buy a house with a mortgage, the house itself is considered collateral that secures the promise you make to pay off the loan as agreed. Foreclosure happens when you cannot make your scheduled principal and/or interest payments on your mortgage, and the lender begins the process of seizing the collateral (the property) instead of receiving mortgage payments. How Does The Foreclosure Process Work? To put it simply, the foreclosure process typically follows several stages, in the following order. Notice of Default After a few months of not receiving scheduled payments from the borrower, a lender records a Notice of Default with the County the property is in. A letter is mailed to the borrower, giving them notice that they will be facing foreclosure if the loan is not brought current during a reinstatement period. Notice of Sale If the loan is not brought current within three months, the lender establishes a foreclosure sale date, and sends the borrower/homeowner a Notice of Sale (and posts it on the property too). At this point, the Notice of Sale becomes public information. Trustee Sale If the loan is not brought current before the sale date, a foreclosure Trustee Sale occurs, often on the County courthouse steps. The property is sold via auction to the highest bidder, and the winner of the auction immediately receives the deed to the property.

4 The #1 Secret Your Lender Doesn t Want You to Know You may be surprised to learn the #1 secret that your lender doesn t want you to know. Contrary to the tone and message of their communications to you. The lender does NOT want to foreclose and take your property back! Why not?! There are a few reasons: Lenders are not in the business of managing properties they are in the business of lending. In fact, they are not even particularly good at managing properties, and they know this, so their goal is to avoid foreclosure as well if at all possible. The lender makes more (and easier) money from collecting performing loans, rather than from the equity they get upon taking back a home. The lender does not want to have to report your loan as a non performing asset to regulators and investors. Non performing assets are seen as a big black mark against the company, and put limitations on the lender s ability to operate the way it wants to.

5 8 Common Ways to Avoid Foreclosure Even if you are late on your mortgage payments, it does not necessarily mean that your property will be foreclosed upon. There are various alternatives to a foreclosure that you may be able to pursue. 1) Private Sale A private sale is what Abound Properties specializes in helping homeowners with. If you can sell the property for more than you owe on your mortgage and do so before the foreclosure sale date you can not only avoid foreclosure, but also keep your equity in the property. If you can t sell the property for more than the amount owed, you can consider a short sale. 2) Short Sale You may be able to sell your house for less than what you currently owe on your loan. With a short sale, your home does not have to go into foreclosure, you don't have to file bankruptcy and the filing process is much faster. The lender saves money without having to file foreclosure proceedings, but does lose money by not getting the full price of the home during the sale. Abound Properties also specializes in helping homeowners utilize this strategy. 3) Pay The Delinquency Generally, lenders are required to accept all the payments that were delinquent and reinstate the loan. The delinquent payments that you have to pay may also include some legal fees especially if you are already in the foreclosure stage. There are also lenders who require certified funds in order to reinstate the loan.

6 4) Forbearance and Repayment One of the most common ways of resolving a delinquent mortgage is to work out a plan with your lender wherein you get to pay a part of your delinquency every month on top of your regular monthly payments. If you are in a situation where you are not able to meet the monthly mortgage payments, your lender can elect to extend the forbearance by suspending payments for a certain period of time up until you can start a repayment schedule. 5) Payment Assistance Some state and local governments and also private charitable organizations have instituted programs that help people with delinquencies pay all or part of their mortgage obligation for a certain period of time. 6) Reamortization In a reamortization, the delinquent mortgage amount is added to the loan balance as a way of bringing the mortgage payments up to date. This move increases not only the total loan amount but also the monthly payments. Of course, the increase in payment will not be as large if the life of the loan is also extended. 7) Deed in Lieu of Foreclosure You may be able to voluntarily "give" your home back to your lender. This may help your chances of getting another mortgage loan in the future. 8) Chapter 13 Bankruptcy In a Chapter 13 bankruptcy, you meet with your creditors and arrange a financial reorganization and payment plan, in which you pay back your debts over a longer timeline. However, not just anyone can file bankruptcy (you have to qualify) so you will have to hire paid bankruptcy attorney to advise you.

7 3 Key Questions to Ask Yourself When Evaluating Your Options As you sort through your options and evaluate which ones may be best for you, here are five key questions to ask yourself and to be prepared to discuss with your advisors: 1) After I solve this foreclosure challenge, where do I want to live? If you would like to continue living in the home that s facing foreclosure, there may be certain options that are more or less helpful. For instance, giving the property to the lender in a deed in lieu of foreclosure option would likely not be your best option. 2) Do I want to buy another property in the future? If you want to buy another property in the future, you may want to focus your strategies on preserving your credit to the best of your ability, so that you can qualify for a mortgage again in the future. While it s possible to buy properties without good credit, traditional mortgage loans will require good credit. 3) Do I have the stamina to fight this challenge for many months or years? If you are willing toward the resolution over time, there may be certain options that can buy you time (such as Chapter 13 bankruptcy). However, if you value solving the problem quickly and moving on sooner over saving your home or credit, other options may make more sense for you.

8 Conclusion If you are facing foreclosure, there are options available that may help you avoid foreclosure and save your home. Every homeowner situation is unique, and we hope the information in this guide has been helpful in providing an orientation of foreclosures. To discuss your unique situation and explore options with Abound Properties, please contact us directly: Other Recommended Resources How Foreclosures Work by HowStuffWorks.com finance/debt management/foreclosure1.htm Foreclosures by Wikipedia.org About Abound Properties We are a local Portland, OR based small business. We buy, rent and sell houses and apartments in our community. The word Abound refers to abundance mentality a sincere belief in mutually beneficial relationships. We are proud to be known for our commitment to: Crafting win win relationships Transparent, open, honest communication Creativity in solving difficult challenges Creating an enjoyable experience for our customers For more information, please visit