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