What To Do With A Homeowner Who Wants To Stay.
In the past week I have been contacted by 3 different sellers who are in foreclosure. Some are months from the sheriff sale others weeks. Any way my letters are working however everyone who has contacted me wants to keep their home.
They do not want to sell yet they do not want the foreclosure. I am at a loss. What can I do to help them and still make some money? Any help would be great. what do you guys do?
Glad to hear your letters are getting results.
Think about it...
these folks are going through foreclosure, right?
And that happened, how?
-- in some way or another they were no longer able to or didn't want to (most likely the 1st one) make payments.
Now, if you were to take over their properties and let them stay there...
do you think their finacial $ituation$ are gonna magically disappear?
-- Probably not.
If they cannot make the payments now, they most likely will not be able to make 'em when or if you take over.
When someone gets into the situation you are describing, they have a limited # of ways to get out.
(1) let you buy their house
&
(2) let the dude with the big 'ol shiny badge take it from them (or that place where the folks got the $$$ to buy the house to begin with)
That's about it.
They cannot eat their cake and have it too. (FYI: that's the correct way to say it)
If they're smart they'll pick #1.
Besides...I believe this is circumventing the foreclosure process? yes? no?
Another words....Don't do it!
[addsig]
Besides the obvious reasons there are many legal reasons not to allow the previous owner to stay in the property. You can help them out by finding either another property to purchase or lease, EVEN if it is from you, but don't let them stay in the house. It is best to let them move on and have nothing to do with them again IMHO.
Most will tell you not to let the person stay in the house. I have gone counter to that on occasion. Letting the person stay allowed me to close on a very profitable transaction, but one where I knew I would have headaches. Another factor for my decision is that the family kept the place in immaculate condition and were obviously very proud of their home. The other factor was that the situation was caused by a loss of job. When I bought the property everyone was employed. I would not do this if there was not a large profit to be made.
Thanks for the input and you are right. what makes me think they will be able to pay now.
With that said how do I help them to see the facts? They will lose the house. Thanks again.
James,
I have a friend who knows a guy that deals with situations like this. This is what he does......
He actually markets as a foreclosure consultant. The people that call him want to keep their homes. He negotiates with the lender for forebearance or to put the arrears on the back of the loan to help the homeowners get caught up. He charges I believe around $850.00 for this service. If he is unsuccessful, he returns their money.
On the deals where the homeowner calls and just wants out or can't come up with the money to work it out with the lender, this guy tries to work a short sale or makes up back payments and keeps the property.
This deal works for everyone. Lots of times he saves their house, getting $850 for making a couple of phone calls that the homeowner was just scared to make. As I understand it, he does at least 4 or 5 of these a week. Not a bad income by itself.
In other cases, he works short sales and sells the houses and gets the big paydays this way.
He also picks up a few sub2s for cash flow.
William Tingle
WilliamGA
William,
Very intresting. I am going to try this. Could be a nice way to get leads. Thanks
James
It is but the human condition. Your job is to agree with their wishes but it cannot be done. You then take them to the next step. You can solve some of their problems but not all.
When they realize where they really are, then take item for item what can be done and what cannot.
Good luck
Lucius
JamesS:
Take off the REI Hat for a moment and LISTEN to what your prospects are TELLING YOU.
Become the Expert REI Consultant and Home Loss-Prevention specialist to them.
Feed them non-BIASED info which supports the BEST IDEA that is to SELL TO YOU!
TIME is their WORST ENEMY ---Not You!!!
I have two Letters that My Affiliate CMLA (Consumer Mortgage Loan Advocates)Members use:
1- "What Lenders WON'T Tell Homeowners Facing Foreclosure?"
"2- 12 Reasons You'll Sleep Better Tonight After Reading This Letter?"
I'll Be posting them real soon along with an Article series that will explain the % Secrets and 12 Things aPFL Owner can do to PREVENT HOME-LOSS!
I hope this helps!
Derrick
D,
Thanks I have visited your website and it has a lot of good info. I want to help them but I am still a little green. The post here have helped. Still can't help but ask how do I move them to sell the property. Thanks again
Hi James,
One of the best ways to move them to sell is to get in front of them in person. Sit down with them at their kitchen table, and ask them what they would like to see happen. If they for instance say that they want to stay in their house, but need $7000 in back payments and atorney fees, ask them if they have the money. (usually this is NO). Ask them if a friend of family member can loan them the money (generally this is NO). Remind them that time is working against them.
As you talk through each scenario with them and they talk out loud and explain to you and to themselves that they can't make good on the situation, now is your time to show your expertise. Explain to them if they wait too long, the bank WILL foreclose and evict them from their house, and their credit will be ruined for years! If they work with you now, you can help them relocate, get them some moving money, and save their credit from being STAMPED with a completed Foreclosure for the next 7-10 years.
As you talk with them, and explain to them that their options are very slim, and that time is working against them, they may not want to sell to you right now, but when reality sets in a few weeks later, they already feel like they know you and trust you and will call you first.
Best of Success!
BAMZ
JamesStreet,
One of the issues with the sellers remaining in the house is the emotional component. Sellers that get too tied up in the memories of the house can sometimes be a problem when you need them to leave.
Any chance of you sharing your letter that you are using to get results? I'm always looking for any key words that get those sellers to call...!
Molotov
Tell the seller, That you understand they would like to keep the home, but they must realize, They may lose it, and lose everything, or you can help them, and make sure they DON"T lose EVERYTHING.
[addsig]
WilliamGA brought up something I want to clarify...
FORBEARANCE:
Any indulgence a party gives to another party to a contract who is late in meeting her obligations under the contract.
So, this is a PROCESS that you initiate by calling up the lender and saying something to the effect "My name is ____ and I am a financial advisor for (seller X). I would like to get a forebearance on (property Y) and work out something on these back payments"
Is this the gist of how this works? Thx
Molotov
Molotov,
I don't have the letter here at work. (Yes still have to work not free yet) I will try and get it to you later tonight.
One more question have any of you tried the pay me to help stop your foreclosure idea talked about in this post? I thought it might be a good way to get in. Like what was said why not get paid to make the phone calls they won't. Any thoughts?
[Molotov,
Yes, this is one way to handle it.
Homeowners themselves can do it as well but most either aren't aware of the process or are sticking their heads in the sand and avoiding the entire situation hoping it will go away.
What is the worst that can happen if you call? They might say no.
William Tingle
WilliamGA
quote]
On 2003-12-02 12:32, molotov wrote:
WilliamGA brought up something I want to clarify...
FORBEARANCE:
Any indulgence a party gives to another party to a contract who is late in meeting her obligations under the contract.
So, this is a PROCESS that you initiate by calling up the lender and saying something to the effect "My name is ____ and I am a financial advisor for (seller X). I would like to get a forebearance on (property Y) and work out something on these back payments"
Is this the gist of how this works? Thx
Molotov
[/quote]
Thank you to everyone who has posted. I would love some more input. Still wondering if anyone is collecting a fee for calling the banks and stopping the foreclosure. Not making big bucks but another sourse of cash and a way to get in. any way... thanks
JamesS:
What I do specifically with my own business CMLA (Consumers Mortgage Loan Advocacy )is...
We assist homeowners to obtain their full rights to have a workout arrangement, Forebearance Agreement, and/or Modification of Mortgage Loan agreement.
CMLA does NOT charge an Upfront Fee to the Homeowners but after and ONLY after WE OBTAIN ACCEPTANCE TO CONSIDER A WORKOUT by their Lender for a repay plan.
At this point the CMLA HAS 'BOUGHT' ADDITIONAL TIME for the troubled homeowner.
So their fee will be a for the Professional Performance of a SPECIFIC and VALUABLE Service Rendered (normally around $2500)
So both I and my CMLA Members (aka. RE Investors) GET PAID some Cashola for our speciic performance!
AND
The Homeowner gets another MONTH or TWO extra before the Sheriff comes a knocking if their Lender REJECTS their repay or theHomeowner BALKS on paying.
SECOND Hat I wear is REI ...and if I can't locate an End Buyer(tenant-buyer etc.) I STILL GOT PAID FOR MY TIME & EFFORT!!!
I hope this helps!
Derrick Ali
You get $2500 from them. Wow now I have to wonder if they can't pay their bills how can they pay you? I know you give money back deal which is great. I would like to hear more from everyone.
I would like to hear more as well. How do you get them to pay $2500 when they can't pay their mortgage and other bills.
Retainer for Contracted Services and a Promissory Note.
Of course they almost always agree to an Equity Share stuation thus Transferring the Deed into a Land Trust and Assigning us some Benefical Interest(Percentage of Equity--if any)
ONLY After the CMLA has Succeeded in getting their Lender to AGREE to CONSIDER a Workout for the near-doom homeowner.
For more details I can send you a sample outlne (FREEE)---just PM me!
Derrick Ali
I do a lot of this type of work. I do not charge, for my pitch going in is that as property owners in the great state of California they are entitled to one free counseling session with a qualified counseler and that I am. I really hate to take money from them cause in many cases thats breakfast and dinner. Also If I am successful in saving the house, I know and so do they that in three to six months unless the mental attitude is changed they will be right back into it again.
I stay in touch, I make the weekly call, I even stoped by and I really counsel. Even with my best efforts I have returned to sell the house or take over the payments and help them move into the little apartment I have obtained for them. It is sad, but it is the human condition. I have even helped out after the suicide of the mother who just could not take it anymore. Strangely enough it was the eldest daughter that suddenly came alive. Moved them into the shabby little single, I cosigned guarantee on the rents and she stepped up to the plate. Try working full time with two siblings in the house. Arrange baby care www.etc.etc.She did it. Turned into the indispensable Para Legal that did all the work for two flacky attorneys. She passed the bar, the hard way, she read it.
Impressed Lucius
LUFOS is K-rekt...
Well at least almost!!!
L ole buddy you wrote:
"I really hate to take money from them cause in many cases thats breakfast and dinner"
Most clients CAN'T AFFORD Breakfast or DinDin and They get an ALMOST FREE RIDE e.g.
I WILL WORK for EQUITY
---and YOU 'POOR STARVATION-RIDDEN HOMEOWNER' GET TO KEEP YOUR BREAKFAST!!!
Probably the same SPOILED EGGS & HAM they snatched away from LUFOS' Cat Dish I bet!!!
I use the Retainer as a RUSE to get the homeowner to VALUE my Presence, Services, and more Importantly MY TIME!
No need to rush I square away my position with the homeowner who is NOT necessarily ready to givie up on the idea of SELLING.
I also make no-bones about my being qualified and WILLING to go to bat for them AT NO COST unless I (REPEAT ME, MYSELF and etc.) GET THEM the MOST (and/or BEST) OPTIONS available given their current situation.
And if that means handing over a BIG FAT DEED and/or EQUITY to me...then so be it!
If it means Handing over a smaller check for my Jockeying them into a forbearance agreement, or modification plan that avoiids BK then 'BY ALL MEANS NECESSARY' (to borrow a phrase)...
GET ME PAID!!!
I am not the one responsible for starving them!
I'm not the one living 27 Months without getting off of a single mortgage payment?
And CERTAINLY I AM NOT the ONE who (85% of my CMLA TIME) ...
FAILS to honor the service terms that GET's A HOME OUT OF DISTRESS PLUS /AVOID SHERRIF's EVICTION!!!
What it comes down to LUFOS my Friend is for all the Headache, Heart-ache and Time invested as a professional in the PFL Game I have to KNOW that the Homeowner is REALLY on MY and (THEIR OWN) TEAM!
Of course I have waived my fees on a number of occasions and even took ZERO Equity (Amazing yet TRUE) ...
Stay in this field long enuff and YOU TOO can have your Own Heart Strings tugged Just ever-so right that Mother Theresa magically appears to CRACK through your THICK REI Skull and remove the AVARICE from the deepest darkest recesses of your 'Poor-Chronometer'
---Can I get a witness hear??
DERRICK (Not Always Sure to Take Your Breakfast, BUT LQQK OUT for your Equity) ALI
[ Edited by DerrickAli on Date 12/07/2003 ]
Thanks everyone. I think this is an area that needs more imput. I also think it is an area that can be an avenue for extra income. What does everyone think?
Just check this post again. I was thinking that if you act as a credit specialist then if it doesn't work out you buy the property. Is this a conflict of intrest or just another way in?
I am new, so be gentle
I believe that in the great Sunny state of California, that if you claim to be a consultant in any manner, you could get sued. And boy do people love an easy way to an early retirement. They're just looking for people to sue.
In this respect, how can I call a homeowner's lender and speak on their bahalf to ask for forebearance? Does the homeowner need to sign something to give me permission to speak for them?
Thanks!
Theresa
[addsig]
Theresas:
The way around the "Consulting/Consultant" bugaboo is to state:
I am a Debt-NEGOTIATOR on behalf of their Borrower.
Who'd sue you for negotiating a workout of their debts ???
Further to avoid being termed a "Foreclosure-consultant" by CA standards I suggest to my CMLAs in Cali to:
BECOME a co-Beneficiary of the homeowner's Living TRUST.
Then when they try to become SUE-CRAZY as you know them to be...
They could still possibly SUE but it's unlikely to result in anything relating to THeir own TRUST property...
As no court in the Litigous US of A allows a claimant to SUE Themselves either Jointly or severly...LOL
Hopew this Helps!
Derrick
I'm always paranoid on the legal aspect of methods. In orfder to negotiate on the homeonwers behalf for forbearance , do you needa license or any kind proffessional experience to do this.
More details please.
Please excuse what may look like a ridiculous question, but I am just very carefule (Paranoid)
Thanks everyone.[ Edited by tjm528 on Date 01/12/2004 ]