Saving Your Home 101

Revision 2.1

A Guide for Homeowners facing Foreclosure

Legal NoticesWhile all attempts have been made to verify information provided in this publication,

neither the author nor the Publisher assumes any responsibility for errors, omissions or

contrary interpretation of the subject matter herein.

This publication is not intended for use as a source of legal or accounting advice. The

Publisher wants to stress that the information contained herein may be subject to varying

state and/or local laws or regulations. All users are advised to retain competent counsel

to determine what state and/or local laws or regulations may apply to the user’s particular

business.

The purchaser or reader of this publication assumes responsibility for the use of these

materials and information. Adherence to all applicable laws and regulations, including,

but not limited to all federal, state and local governing bodies, agencies responsible for

professional licensing, business practices, advertising and/or any other aspect of doing

business in the United States or any other jurisdiction is the sole responsibility of the

purchaser or reader. The author and Publisher assume no responsibility or liability

whatsoever on the behalf of any purchaser or reader of these materials.

Any perceived slights of specific people or organizations are unintentional.

Copyright © 2009 Michael Suess

ALL RIGHTS RESERVED, Printed in the USA

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher and the authors. Requests for permission or further information should be addressed to REI Training Warehouse, LLC, 15417 West National Avenue - #226, New Berlin, WI 53151-5156

Table of Contents

Here is the list of options and techniques that I discuss in this book, in outline form. This

section can be used as refresher as to what was discussed, by reminding you which

chapter headings to turn to for an explanation of the technique.

Section I: Preamble

Chapter 1: Introduction

Chapter 2: Definitions

Chapter 3: Budgeting

Section II: Methods of getting money

Chapter 4: Borrow the money

• Use your credit cards

• Get a personal loan

• Use friends and family

Chapter 5: Use your savings accounts

• Use bank savings accounts

• Use retirement accounts (IRAs)

• Use life insurance policies

• Use certificates of deposits, bonds, stocks

• Use annuities

Chapter 6: Sell personal items

Chapter 7: Get a second job

• Be an employee

• Create a business

Chapter 8: Apply for grants

• Churches/Religious organizations

• Local/State/Federal government

• Community Outreach

• Charities

• Public Foundations

Chapter 9: Fund-raising

• Sell products door-to-door

• Hold a charity dinner

• Hold a charity auction

Chapter 10: Other ways to get money

• Bonuses/Payroll advancements

• Equity from real estate holdings

• Ask for money

Section III: Keeping your home

Chapter 11: Bankruptcy

Chapter 12: Reinstating the note

Chapter 13: Forbearing the note

• Arrearage placed on the back of the note

• Arrearage paid in installments

• Modify the terms of the note

◦ Modify the interest rate

◦ Lengthen the amortization schedule

◦ Convert to an interest-only payment

◦ Convert to a negative amortization payment

Chapter 14: Refinance the note

• FHASecure program

• Consolidate notes

Section IV: Get rid of your house

Chapter 15: House Condition

Chapter 16: For sale by owner (FSBO)

Chapter 17: Using a Realtor® to sell

Chapter 18: Selling to an investor

Chapter 19: Deed-in-lieu of foreclosure

Chapter 20: Letting it go to sheriff’s/trustee sale

Section V: Examples

Chapter 21: Modification of note terms

Chapter 22: Multiple Real Estate Holdings Case study

Chapter 23: Cost of Selling Worksheet

Section VI: Resources

Chapter 24: Budgeting Worksheets

Chapter 25: New Programs Offered

Chapter 26: More information

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Section IPREAMBLE

I want to congratulate you on your initiative to take charge of your situation and deciding

to take an active role towards trying to save your home. Unfortunately, there are many

people who are in the same situation that you are in, but they think that if they ignore it

long enough, it will magically go away… Soon they find out that their home “magically”

(and forcibly) goes away, when the lender follows through with their rights, and evicts

the homeowner from their home. I am proud to say, that you are not one of them, and I

am confident that since you are willing to learn and take action, by applying the training

that is found within this book, you will either keep your home, instead of having your

lender take it away from you, or you will have a better credit report, which you will

discover is very important, even if you think that you will never want to get another

house again. But more importantly, you will have the tools to make your life less

stressful.

This section will give you an introduction of why you need to use this system, define

important terms that you will need to understand so that you can talk intelligently to your

lender, thus improving your chances for saving your home and an introduction to getting

your finances in order, through the creation of a budget.

Now before I get into the meat of the techniques and strategies of this guide, let me tell

you a little about me, so that you are comfortable that I know what I am talking about,

and why I am confident about the techniques that are contained in this guide.

Notes

About the Author

Michael E. SuessMichael has spent hundreds of thousands of dollars in training

and education, some of it was in seminars and home-study

programs, but most was attending the "School of Hard Knocks"

(real life experience.) Michael utilizes his experiences in his training, so that others can

avoid some of the lessons that he had to learn by “trial and error.”

Michael is just an “Average Joe,” exactly like you and thousands of others out there. His

approach and philosophy to training others is to tell his audience what they need to hear,

and Michael doesn't believe in "sugar coating" his training, (which to some might be a

little too direct.) Michael believes that when someone asks him a question, they want

answers, not to "feel better about themselves," so at times he has been thought of as being

too hard and too direct; Michael believes that your time is valuable, so why should he

waste it trying to be "nice" when "tough love" would train faster and would "stick" better

in your mind. Michael never paints a “pie in the sky” type picture order to sell more

training or to cause the audience to become ill-prepared. He’d rather give the audience

more experiences, details, pitfalls, etc. in his training so the audience has a good

understanding of what they should expect when they attempt the techniques in their

business, rather than giving the audience “just enough,” which to Michael means “not

enough!”

Michael started investing in real estate in February of 2000, and his strategy was always

"buy and hold" single family houses and duplexes, which ranged from "move-in"

condition type houses to total rehabs. Michael has successfully acquired properties by

Short Selling, Assuming Mortgages (Subject-to), and conventional methods to name a

few techniques he uses everyday. In addition, Michael has helped homeowners salvage

their homes from foreclosure, by providing the homeowners techniques that helped with

negotiating with lenders.

Mostly through frustration of attending seminars and going through home study courses,

which lacked the content necessary to give Michael a good foundation to work from,

Michael decided to create the REI Training Warehouse, LLC, which has a vision to

provide high quality training, comprehensive enough to give the audience a solid

foundation, at a fair and reasonable price. Michael’s motto is: “Make competitors out of

the audience.” Michael’s no-holds-barred approach of training and his willingness to

answer questions allows the audience to leverage his experience for greater growth in

their business.

Chapter 1Introduction

This book was written because I understand that people in general want to live the

“American Dream” and own their own home. Of course there are several others that are

having such a bad experience with homeownership that they just want to get out. In

either case, this book is for you. This book shows you how to find money and several

techniques that can be used to keep your home, but I also included a section dedicated to

selling a house, in case you are unable to either create a deal with your lender or you are

just looking for a way to get out.

Though this book was written towards the homeowner facing foreclosure, this book can

also be used for anyone who deals with real estate. In fact this book could be an

excellent reference manual for the new wave of real estate investors and “transaction

engineers” who buy and sell real estate for profit. Several, if not all the techniques found

in this book can be used by both the homeowner and real estate investor.

This book is not intended to train you in how to get the names and addresses of

homeowners facing foreclosure, nor is it intended to inform you as to how to negotiate

with lenders. If you require this type of information, please go to the REI Training

Warehouse’s website at www.REITrainingWarehouse.com or you can email us at

Inquiries@REITrainingWarehouse.com so you are presented numerous programs that

concentrate on these subjects.

The chapters are written in such a way where you do not need to read them in order, but

you can jump around within the chapters, to best suit your situation. Use this book as a

reference guide, if you find some techniques and strategies found in the chapters might

not be available to you, there is no need to review those chapters, but I would really be

surprised to find that you could say that about any one of these techniques. Sure, you

might need to “tweak” the technique or strategy a little bit to make it fit your situation,

but in the end, everyone should be able to utilize 99%+ of the techniques and strategies

explained in this book.

This book was written to get straight to the point, and train you with techniques that you

need now. Though the material covered can be interesting and educational for someone

not facing foreclosure, I know that a person in foreclosure is under a great deal of

pressure and stress from their lenders, and I want to give the reader the needed

information, so that they can take action, and relieve the stress in the shortest and most

efficient way possible.

Chapter 2Definitions

There are several words and terms that are used when dealing with real estate and

lenders.

Please note: When I use the word “you,” I am talking about the homeowner.

Amortization: The number of years that would be needed to pay the note off and all

associated interest in full.

Example: A note that is amortized over 30 years means that it would take 30 years to

pay back all the money that you borrowed and the interest. A note that is

amortized over 15 years would be paid in full in 15 years.

Arrears: The total amount that is due to the lender; total of all missed payments.

Example: If your house payments were $1,000.00 a month, and you missed four

monthly house payments. You would have $4,000.00 in arrears.

ARM: Adjustable Rate Mortgage. A note with an ARM means that the interest rate

is adjustable after the initial time frame specified.

Example: In the description of the note, found Chapter 21, the interest rate is locked at

6.75% for two years; since it was a 2-year ARM. After the two years, had

passed, then the interest rate can adjust according to the terms of the note.

Balloon: A balloon on a note is the amount of time that the lender is giving you to

pay back their money.

Example: Using the note found Chapter 21, the balloon is defined as 5 years, and thus

you would make payments for five years, and at the end of the fifth year,

you would need to pay back the lender the balloon payment, either with

cash or refinancing.

Balloon Payment: This is the total amount due to the lender, when the balloon

expires. This includes the principal that you haven’t paid back

as well as any interest that has been added.

Example: Looking at Example #1, found in Chapter 21, the balloon payment is:

$76,963.99.

Deficiency Judgment: A judgment for the difference of what you owe the lender

and what the lender was able to get from selling your house.

The lender sued you for the difference, and won the lawsuit.

Example: If you owed the lender $100,000.00 and after the lender foreclosed on your

house, they were only able to sell your house for $85,000.00, the deficiency

judgment, if the lender gets one, would be $15,000.00 (plus court costs.)

Hardship: This is the reason that you fell into foreclosure.

Example: Job loss, an illness (medical bills), the monthly payments increased to an

amount that you can not longer afford, a death in the family, etc.

Lender: The person or company that gave you money to purchase your home.

Example: Homecomings, Litton, Ocwen, Countrywide, HomeEQ, Washington

Mutual.

LTV: Loan To Value. The percentage of what the homeowner owes on the property

and what the property is appraised for. LTV is computed, using the following

formula:

Amount Owed

LTV = ----------------------

Appraised Value

Example: If a house is worth $150,000.00, and the homeowner has a loan on the

house for $100,000.00. The LTV would be 100,000.00 / 150,000.00 or

67%.

Mortgage: This is the legal document, which is also called a securing instrument,

that is signed by you that says that if you do not pay back the Promissory

Note, according to the terms (monthly payments,) that the lender can take

back your home, and try to sell it, so that they can try to get their money

back. This document “collateralizes” your home, for access to the

lender’s money.

Note or Promissory Note: This is the legal document that is signed by you promising

that you will pay back the lender. It specifies the terms of

how you will pay the lender back as well.

Example: Looking at the description of how the homeowner purchased their house in

Chapter 21, the note is the piece of paper that the homeowner signed and

gave to Dewey Cheatham Lending promising that they would pay back the

$80,000.00 they borrowed, plus the interest.

Principal: Amount of money that you borrowed from the lender.

Example: Looking at the description of how the homeowner purchased their house in

Chapter 21, the principal is $80,000.00.

Terms: This describes the way you will pay back the money that the lender borrowed

to you. The terms describe the length of time that you will borrow the money

for, the interest rate that you will pay the lender for using their money, when

you need to make payments (usually monthly,) if there is a balloon, it

describes when the balloon payment is due, etc.

Example: Referring to the description in Chapter 21, the terms of the note are: that the

note is a 2-year ARM, having an interest rate initially of 6.75%, and

increasing 3% per year, after the ARM expires, that the payments are based

on a 30-year amortization and has a balloon payment due after the fifth

year.

Chapter 3Budgeting

Preparing a budget is probably the most beneficial thing that you could do at this point,

and I understand that you might feel that creating a budget is the last thing that you want

to do right now. Who really does want to look at how they are spending their money,

especially when it seems that you don’t make enough of it right now.

Yes, I do understand that this could be a painful exercise for you, and I am also aware

that many of you have never created a budget, and you don’t know the first thing about

how to even start. That is why I added this chapter in this book, because without getting

you to understand where your money is coming from and where it is going, how can you

possibly know if you are able to get yourself out of your current financial situation?

Creating a budget is not something that most people can do in a day or a week.

Sometimes it takes longer than a month, but generally after a month, you will have a

pretty good grasp of where your money is coming from and where it is going, at least on

a monthly routine. Of course, there may be situations, where you have bills that need to

be paid once every three months, six months or even once a year, but first getting a

foundation, by tracking your monthly income and bills is a great start.

This chapter will start you on setting up a simple budget, one that will work for most

people’s needs. Of course this chapter will not transform you into a financial advisor, or

even get very deep into financial planning. It will just give you a very basic overview of

how you should develop a system, where you are able to track your income and your

expenses, so that you can understand if there are places where you could save a little

money, so that you are able to save your home. If you really want to get into learn more

about how to budget money there are several resources available on this topic at your

local bookstore, the Internet or you can visit us at the REI Training Warehouse’s website

at www.REITrainingWarehouse.com or for more information, please send us an email

at: Inquiries@REITrainingWarehouse.com.

So here is what I need you to do, for the next month, at least.

1. Save every receipt and statement that you spend money on. If you purchase

something that doesn’t give you a receipt, then you need to write down (in a

notebook or on some thing that you will not lose,) what you spent money on,

and how much. This is very important. The more accurate you are in tracking

of every penny that you spend, the more accurate your budget will be. A few

cents here and a few cents there could add up to a significant number at the end

of the month. (Don’t worry; most people only need to do this for a month, just

to get a good idea of what their spending habits are.)

2. Save every payroll stub, check stub or if you get cash, you will need to write

down how much you received (in the same place where you write down your

expenses) and why you received the money. Again, keeping track of every

penny is very important at this time.

Now, at the end of the month, I want you to take out eleven sheets of lined paper. At the

top of a sheet of paper, write the word:

• “Income” on the first sheet

• “Groceries” on the second sheet

• “Utilities” on the third sheet

• “Entertainment” on the forth sheet

• “Transportation” on the fifth sheet

• “House” on the sixth sheet

• “Education” on the seventh sheet

• “Medical” on the eight sheet

• “Current Debt” on the ninth sheet

• “Miscellaneous” on the tenth sheet

• “Cash Flow Statement” on the eleventh sheet

Now, take all your receipts, payroll stubs, check stubs and your other written records of

what you spent money on and what other income you made for the month. Please note,

that once you write down an income or expense, put that receipt in a separate pile which

is away from the other receipts that you have not written down yet, because once you

write down the receipt on one of these sheets of paper, you do not want to write them

down on another sheet. You only count each income or expense once. Failure to do so,

will really mess up your budget.

• For everything where you made money (payroll and cash) write down where

you made the money and the amount that was made on the sheet of paper that

has the word “Income” on the top if it. For example:

Income Payroll $437.68 SSI $500.00 Payroll $437.68 Babysitting $15.00

• For all your grocery receipts, write them down, just like you did with all your

income, on the sheet of paper that has the word “Groceries” on it.

• Now find all your utility bills that you paid for the month, and write them down

on the sheet of paper that has the word “Utilities” on the top.

• Gather up all the receipts for movies, cable, DVDs, CDs (music,) restaurants,

pizza delivery, alcoholic beverages, vacations, baby sitting fees, etc. Whatever

receipts that you find that were for entertainment, and write them down on the

sheet of paper that has “Entertainment” on the top.

• Now take all the receipts that you spent on transportation (cars, bus tickets,

gasoline, whatever type of transportation you and your household uses, which

impacts your spending,) and write down the receipts on the sheet of paper that

has the word “Transportation” on the top.

• Did you spend anything on your house, like light bulbs, a snow shovel,

lawnmower maintenance, etc? Take all these types of receipts and write them

down on the sheet of paper that has the word “House” on the top.

• How about education? Did you pay any school dues, children field trips,

educational books or programs? Take all these receipts and write them down on

the sheet of paper that has the word “Education” on the top.

• Did you have any medical expenses, like doctor office visits, prescription

medicines, surgeries? Write down any medical expenses on the sheet of paper

that has the word “Medical” on the top of it.

• Do you have credit card payments, or car payments, or any other type of

payments that you need to make on a monthly basis? List out all your monthly

payments on the sheet of paper that has “Current Debts” on the top of it.

• Now take the rest of your receipts that you have not written down on one of the

above sheets of paper, and write them down on the sheet of paper that has the

word “Miscellaneous” on it.

You should have written down all the receipts, pay stubs and all other expenses and

income on one of the sheets of paper, and the sheet of paper that has the word “Cash

Flow Statement” should be blank (except for the title.) Remember, you can only have

one entry for each receipt or statement. Writing down a receipt more than once will

cause you to really mess up your budget, and that would just result in a waste of time.

Now get a calculator and add up the totals on every sheet, and write down the totals for

each sheet. It is important to get a calculator, or some type of adding machine, since you

probably will have a lot of numbers on each sheet of paper, and you don’t want to make a

mistake. I suggest that you add up the numbers, write down the total, and the re-add up

the number, to make sure that you come up with the same total, just to be sure that it is

right. If you get a different total, the next time you add up all the numbers, then you will

need to re-add them. To find out which total is the correct one. I can’t count the number

of times I miscalculated totals. It is frustrating at times, but again, being sure that you

have accurate numbers is very important.

Now we are going to transfer all the totals on to the tenth sheet, which is titled (has the

words) “Cash Flow Statement” on the top of it. This is how you will do this:

• Write the word “Income” and then on the same line, put the total on the right

side of the paper. Now underline the total for the “Income” line.

• Now for the other nine sheets of paper, Write the title (“Groceries”, “Utilities”,

”Entertainment”, etc.) on the left side and on the same line, put the total for that

sheet in the middle of the line. (You can look on the next page for an example.)

• Using a calculator, add up all the expenses that you wrote down. An expense is

everything that you spent money on, opposed to income, which is money that

you received from someone. Write “Total Expenses” on a line below the last

expense, and put the total on the right side of the piece of paper. (You can look

on the next page for an example.)

• The last step is to find out if you have any extra money at the end of the month,

or if you need to borrow some every month, to make ends meet. Below the

“Total Expenses” line, write the words “Cash Flow” and take the total found on

the “Income” line and subtract the total that you wrote down on the “Total

Expenses” line. Write this number over on the right had side of the page, on the

same line where you wrote “Cash Flow” one. If the number is positive, that

means that you did not spend as much as you made. That is a good thing! If the

number is negative, then you need to borrow money each month, in order to

make ends meet.

Here is an example of what one cash flow statement might look like. The numbers that

you will get are different than what I used in this example, although through this

example, you will get an idea of how the cash flow statement should look like, just plut

your number in place of the numbers that I used, to get your personal cash flow

statement.

Cash Flow Statement

Income $2,445.68

Groceries $156.98

Utilities $170.23

Entertainment $14.91

Transportation $68.10

House $1,465.47

Education $0.00

Medical $142.12

Miscellaneous $238.90

Current Debt $571.30

Total Expenses $2,828.01

Cash Flow (Income – Expenses): -$382.33

As you can see, using the above cash flow statement, the person doesn't have enough

money each month to pay for all their bills, in fact they are short close to $400.00 each

month, which might be one reason that they can't make their house payments. If the

person in this example didn't pay their house payment of $1,465.47 each month, then they

would have extra money to buy other things, that their family might need.

Again, the above is just an example, and probably is not the same as what your numbers

will show you. You might have a positive “cash flow” number at the bottom, you might

have a smaller negative number or maybe even a larger negative cash flow. Before I go

any further, let me explain what I mean by “cash flow”. Cash Flow is simply the amount

of money you have at the end of a given period, such as a month, once you take all your

income, and subtract all your expenses. You want to have a positive cash flow, since that

means that you have enough income to pay all your expenses, and then the extra cash

flow could be used for saving or to buy other items for the family. If you find that you

have a negative cash flow, which means that your expenses are greater than what your

income is, then we need to find ways to decrease your expenses, or increase your income,

or both.

Well, if you did this exercise, I need to congratulate you. You are truly looking for a way

to save your home. You have taken the first steps towards getting yourself out of your

situation; now let’s continue working on your budget. Don’t worry; you have already

done the hard part.

Look over your sheets of paper that have the titles of your expenses (the middle column

items on your Cash Flow Statement) and see if there is any way to reduce the expenses.

Are you buying a lot of “junk food” that isn’t really good for your body anyway, which

you could possibly not buy, to reduce your grocery expenses? Or maybe find another

grocery store, where you can buy the same types of food for less.

How about reducing your utility expenses? Are you living in a home that is constantly at

78ºF, when it is cold outside or 64ºF when it is hot? Yes, it is nice to be comfortable, but

putting on a sweater, or curling up with a comforter can allow you to drop the

temperature to 68ºF and still be comfortable when it is cold outside, and using your A/C

just to take out the humidity in a home, but still maybe 78ºF could save you a lot when it

comes to utilities. I am just offering some suggestions in trying to lower your utility

expenses. I don’t know the actual cost savings, but by contacting your utility company,

they could tell you approximately how much you would save/spend, by modifying the

temperature of your home. It might surprise you at what cost savings can bee seen, and

still not give up a comfortable environment.

Entertainment can be a huge expense for many, and many people could save a lot of

money by shaving down expenses from this area. Maybe you don’t go to your favorite

fast food restaurant two or three times a week, but maybe once a week, or once a month.

It will reduce your expenses and also help save your life. Again, this category of

expenses can yield a large savings, if your entertainment expense is high. If you don’t

have much in this category, then you are considered one of the very few, and fortunate (at

least for budgeting.)

Transportation is what it is. In some occasions, you are able to reduce this expense, but

don’t worry if you can’t. You need to get to work and back, you need to get food, go to

school, drop the kids off to school, etc. Some ways you could possibly reduce this

expense is if you have access to a city bus, and there is a way to get from home to work

and back, you could utilize that option. With the price of gas these days, you might be

very surprised at what you could save in both gas and insurance by using public

transportation. If you can find ways to save, like maybe car pool, great, but again,

sometimes this category is hard to find savings from. Be creative, you might find ways to

save with transportation.

House expenses should not be deferred (put off until another day.) If you need light

bulbs, you need light bulbs. If you need to fix the lawnmower, so that you can maintain

some sort of order with the maintenance of your home, you need to fix it. I am not

saying that you need to spend money on your house, but I am saying that you should try

to keep your house up. It is an investment, and letting things go, will make things worse

in the long run. Do what you can to save in this area, but don’t go to the extremes, and

let your house go.

Education, like Transportation is what it is. There really is nothing you can do with this

expense, unless you are buying educational things that are not going to allow you to

better yourself or your family. If you are buying “Get Rich Quick” programs, hoping that

you are going to strike it big, with little effort, let me tell you right now, that will not

happen. It takes hard work and preparation to make it “big.” Luck is not a “by chance”

thing, it is that the person prepares themselves, and when there is an opportunity, they

take it. To the untrained eye, it is as if they got rich quick, but anyone that is truly rich,

and not through illegal methods, would tell you that they have been training for the

opportunity for years before. Okay, enough of the lecture, if you can find areas to save in

“Education” then save, if not, don’t worry too much about it.

Another expense that is really unavoidable is “Medical.” You need to spend in this

category in order to be healthy. Do not jeopardize your health, to try to save a few bucks.

It is not worth saving your home, if it costs you your health.

To really help create a larger positive cash flow is to reduce the number of monthly

payments that you are currently paying to your credit cards and other monthly payments

that are found on the “Current Debts” sheet of paper. So, you need to make a plan to pay

off these credit cards and other credit related expenses, and not to carry a balance on your

credit cards and have a car payment. This book can not fully explain how to go about

this, and if you are serious about increasing your positive cash flow, and you don’t know

how to reduce this category, it is best to seek professional credit counseling help from a

reputable credit counseling service.

Now we have come to the “catch all” category (“Miscellaneous”,) where you have

expenses that did not fall into any of the other categories. Take a look at the expenses in

this category, and try to remove some, if not all of the expenses. Treat this expense as the

“Entertainment” expense, and really dig into it, you might be surprised at what types of

savings you can bring out.

After reviewing your spending habits, is there anything that you can do to reduce your

spending, and therefore increase your “Cash Flow?”

Now that you understand where your money is coming from and where it is going, you

need to setup a system, so that you can help change your spending habits, so that you can

be more successful in saving your home. There are many systems that can be used, and

one can be found by either researching on the Internet or talking with a credit counselor.

To offer one suggestion, some people will write on an envelope the word

“Entertainment” and then only put in a small amount of money (according to what they

have decided they can spend according to their budget) in the envelope each month.

Once the money has been all spent, then they should not spend anymore for

entertainment items, until the next month, when they put more money into the envelope.

There are hundreds of systems out there, just find one that works with your budget, and

you are willing to do to keep you on track.

Many people do not track their spending, and that is the most common reason for living

from paycheck to paycheck. How can you even think about getting out of the current

situation that you are in, without knowing where your money is going? How can you

negotiate with your lenders, when you don’t know how much is available monthly that

could be used to pay them back with? How can you become rich, without being

disciplined in controlling your cash flow? All these questions revolve around tracking

your cash flow, and creating a budget. That is why I spent so much time talking about

this subject. It is critical in your success in saving your home. It is critical to everyone

that wants to become independently wealthy and it is critical for anyone who wants to

keep their home. I hope you feel the same way, and start building your budget, and

controlling your cash flow.

Section IIGETTING THE MONEY

This section will identify several ways that you may be able to create or find money that

you could use to attempt to save your home from being foreclosed upon.

Not all the resources that are discussed in this section are applicable to everyone, because

some grants or fund-raising opportunities might be local to a community, and therefore

since you might not live within that local community the grant might not be available to

you. Though on several occasions, the grant money is there, but maybe under a different

branch of the government or made available to you through private organizations. Don't

be too quick in telling yourself that the money is not local to your community. It very

well might be. Every state and city is different, it is up to you to research and find what

resources are available to you in your hometown. Unfortunately, do to the huge numbers

of communities, and the reality that these types of programs come and go, it is virtually

impossible to name all of these resources for you. I will tell you this, these resources are

not hard to find, and I will discuss how to start looking for them, within the appropriate

chapters.

Don’t give up hope if one of the techniques fails to work, just try another technique to see

it works. The more times you keep trying, the better the chances you will have in being

successful in keeping your home, and that is the goal, right?

So, with that, let’s get started in learning what options are available in finding the money

needed to so you can try to keep your home!

Notes

Chapter 4Borrow the money

One source of income might be what I call “Borrow the money,” which involves finding

ways to borrow money from places that are available and readily accessible to you, such

as credit cards, friends and family and personal loans.

What can’t you do with a credit card these days? You can buy groceries, electronics,

cars, boats, so why not help pay for your home? Now, before I go any further, I am not

saying that you should use credit cards to make payments that you could not make before,

as the credit card interest rates are extremely high, and much higher than the interest rates

on your home, what I am saying is that if you have the income to pay your credit card

payments on time as well as you overcame your hardship, where your income is now

high enough that you can start making your house payments again, but all you need is

just a little nudge to raise some money quickly, so you can keep your home, then using

credit cards is a fast way to get money. Be careful when you use this option and be aware

that the use of credit cards is just a temporary “shot in the arm” to get the money needed

to keep your home. Do not use credit cards if you can not afford the credit card monthly

minimum payments along with your monthly house payments. And never even think

about this option, or any other option for that matter, if you can not afford the monthly

house payments. Don’t max out your credit cards, and then lose your home anyway.

If you are just starting the foreclosure process, (you did not miss more than three monthly

house payments,) you could see if you are eligible to get a personal loan from a local

bank. This is really a shot in the dark as if you are able get a personal loan, but until you

try, you will never know. It might work. I mention three months, because the lender

usually doesn’t report nor usually pursue their right to foreclose until the lender has not

seen a payment from the homeowner for 90 days. So without the foreclosure action

recorded on your credit report, you have a better chance of getting a loan from a bank.

Once the foreclosure is recorded on your credit report, your chance of getting a loan from

a bank drops significantly.

Generally, once you are served with the notice that the lender is considering and

threatening foreclosure, your credit report is trashed, and therefore the chances that you

are eligible to get a loan from a local bank is extremely low. But that shouldn’t stop you

from trying to get a loan from somewhere that doesn’t check your credit; primarily I am

talking about family and friends.

If you know of someone that has some money available to use, it might be in your best

interest to contact them and see if they would allow you to borrow some money. Maybe

the family and/or friends could use their credit cards to advance you the money you need

to keep your home.

Some other sources to get a personal loan from, involve your current employers. It never

hurts to ask your employer for an advance on your payroll check, or if the company could

provide you a loan. Generally, your employer will not pull your credit, and will take

your employment history in consideration; if you have been a good employee and your

employer doesn’t have any reason to doubt that you will be employed there for at least

long enough to repay the loan, your chances of getting a loan from your employer is a lot

better than from a bank, but the decision of giving you a loan is at the sole discretion of

your employer. Your employer has direct access to your paycheck, and therefore could

holdback an agreed amount of money from each paycheck, to be applied to your loan.

Again, it never hurts to ask.

One last source for a personal loan could be a pawn shop, or a title loan shop, where you

have something of value that could be used as collateral to secure a personal loan, when

you don’t want to outright sell the item of value, like a car or some antiques.

Getting another loan is probably the last thing you want to think about, since you are

currently struggling with your home loan, but sometimes taking out a small loan, or

getting a small advancement from your credit cards or employers, could mean the

difference between saving your house and being forced to lose it. As long as you have

overcome your hardship, and you are able to afford the additional payments, that the new

loans require, loans could be one of the fastest and easiest ways to save your home.

Chapter 5Use your savings accounts

If the use of credit cards, using family and friends and obtaining personal loans has been

exhausted, then you need to look at areas where you might have money sitting in savings.

And we need to think of things outside of the standard saving account. Yes, if you have a

savings account at a local bank, with enough money in it then that would be the easiest

method to get the required money to save your home.

Now let’s assume that you do not have a savings account with enough money; there are

other savings accounts that are not as obvious or rarely considered as “a savings

account.” If you have an IRA (Individual Retirement Account,) also known as a 401(k),

ROTH, etc. either through your employer or otherwise, sometimes it can be used to

borrow money from, as defined in a “hardship clause” written in the IRA. Usually the

hardship clause states that you can borrow the money, up to a specific percentage of the

value of the IRA without penalties as long as you pay the money back within a specified

time and you are in a hardship situation. There are many times that people have

significant funds available sitting in an IRA, and it never corsses their minds as a source

of income. Of course depleting the money from an IRA will impact you during your

retirement years, but if it is between saving your home and getting a larger retirement

payment several years down the road, you might think that keeping your home is worth

the loss. Also, when you do borrow the money from the IRA, you will need to pay back

the money, (or else “Uncle Sam” [the state and federal governments] will penailize you

with a tax, which could be up to 50%+ of the amount you took out;) so unless you are

going to retire soon; you should have repaid back all the money to the IRA by the time

you retire anyway.

Other forms of savings accounts are Certificates of Deposits (CDs,) United States

Savings Bonds, Treasury Notes, Treasury Bills and Stock Portfolios. If you hold any of

these types of accounts, then selling or cashing in these items (even if prematurely) could

yield enough money to save your home. Stocks can be sold, even at a loss; CDs, savings

bonds and treasury notes can be sold before the maturity date, which you will need to pay

penalties on. If you are serious in saving your home, sometimes a loss is worth the

advantage of saving your home. And not all of the stocks, CDs or Treasury Notes that

you own would need to be sold, just enough to provide the money required to save the

home.

Do you have a life insurance policy? Some life insurance policies allows for you to

borrow against it, just like the IRA, where money is sometimes available to be “loaned”

to you, in cases of hardship, and all you need to do is make payments back to the policy.

Usually life insurance policies that have a cash value, which builds as insurance

premiums are made have this ability to be borrowed against, and usually the policy

holder is able to borrow up to the cash value of the policy. Check with your life

insurance agent to see if you are able to borrow against your life insurance policy. This

little technique is rarely thought of by homeowners or even real estate investors offering

help to homeowners, so using this technique often gives you success where others seem

to fail in providing help.

Along the lines of borrowing against insurance policies, are annuities, lottery payments,

and structured payments. To make it easier to read, I am going to refer to annuities,

lottery payments, and structured settlements as “structured settlements,” since that is

what all three of these types of income are. Do you have structured settlements that pays

you a small amount of money, maybe monthly or annually, or maybe every five years?

That really does not help you now, does it? There are several businesses out there that

will pay you money, if you will assign the rights and payments over to them. You will

need to sell at a discount (less than what the total payments equal over time) the rights of

the structured settlements, which means that you might sell your structured settlements

for fifty cents on the dollar, for example you might need to sell your annuity that will pay

you $20,000.00 over five years, for $10,000.00 cash right now. This might be distasteful

to you (to lose half the money you were expecting to receive,) but selling to get cash right

now, when you need it, does give you $10,000.00 right now; and if it means keeping your

home, it might be worth it. Not saying that all structured settlement buyers offer fifty

cents on the dollar, some might offer more, some might offer less. I just used that rate for

the example. It is good to check the various structured settlement buyers in your area, for

the best rate that is available to you. Maybe selling the structured settlements might give

you enough money to save the house and give you a little extra money to get even better

on your feet. Again, make sure that you do the research so that you can get the most out

of selling your structured settlements.

As you can see, savings accounts are not just an account that you hold at a bank that has

the words “savings” in the title. Savings accounts come in all forms, and sometimes are

not thought of as savings accounts. When you open your mind to all the various accounts

that you might hold, which has a cash value associated with them, you might be very

surprised to what type of money you have available to you for your use. You might have

the ability to save your home, through the use of these accounts, so do your research on

how you are able to use the money that you have “saved” through these accounts.

Notes

Chapter 6Sell your personal items

Okay, you can’t find a way to get money through borrowing it from credit cards, family

and friends or from finding a personal loan from others. And you have no savings

accounts or not enough in savings to where you can borrow or squeeze out money from,

in order to save your home. You have overcome your hardship, you have the ability to

make the payments from this day forward, but yet you are stuck in finding a way to

gather enough money, from quick and immediate sources. Well, all is still not lost, as

now we have come to a point where a little more effort is needed by you, in order to find

ways to establish the required money needed to save your home.

Are there some things that you own, that you have never used, or haven’t used for a

while, that someone else might like? If you have every looked on eBay®, you’d be very

surprised at what items people are trying to sell, and more surprised at how many people

are looking to buy it. If you have items, that you could live without, or should I say, if

you had to trade these items in, in order to save your home, you should try to see if you

could sell it. You might be very happy when you see how much money you can create

from your personal items.

As I mentioned in an earlier chapter, regarding using personal items to be used as

collateral in securing a loan with a pawn shop or a title loan shop, you could instead of

using the personal items as collateral, can simply sell the personal items, and use that

money to save your home. The sale of these personal items can be sold to people in the

neighborhood, family and friends, and using the Internet could be a useful tool in selling

your personal items. Today, when online auction houses are the new way to sell personal

items, and even real estate, posting items on such sites as eBay®, or Craig’s List® could

yield tremendous results. There are hundreds of ways to sell personal items, and many of

them are free, so start thinking and writing a list of methods that you could use, so you

have a good source of different ways in which you can transform your personal items into

much needed cash. Some ways to help build your list, is to search the Internet for auction

houses, search for ways to sell personal items on the internet, ask friends and family

about their thoughts of how they would sell their personal items, if they had to, and to

whom. You will be amazed to what type of list can be created when you spend a little

time thinking about the subject. Remember, while you are brain-storming for ways to

sell personal items, never reject anyone of them, by saying, “That would be a dumb way

to sell items” or “that will never work;” because that one “dumb” idea might spark

another idea that would work. So, take out a blank sheet of paper, and just start writing,

as fast as the ideas come to you, and never mind asking yourself if it would work. Once

you have created the list, you can start removing ideas that would not be in your best

interest. Never delete your ideas, just transfer the ones that seem to be able to work on

another sheet of paper, maybe in the future, re-reading all your ideas could allow you to

come up with the best idea. Refer back to your list weekly; read over your ideas, maybe

the “perfect” way to sell might just pop into your head, which will be even better for you

to implement.

Selling personal items can be the last thing you want to do, and rightfully so, you like the

things that you have gathered, and you are not looking forward to losing them. I ask you

to ask yourself this question: “What items would I trade, in order to save my home?”

You might find some things that could easily be sold, and your home saved.

Chapter 7Get another job

Another way for you to find the money needed to save your home is to get another job.

This new job would be only temporary and you would only need to keep it long enough

for you to have created enough money to save your home. Again, I am assuming that

you have already overcame your hardship, you are making enough income to pay the

house payment without straining yourself, and the only roadblock that prevents you from

keeping your home is that you need the extra money that you and your lender negotiated

in order for you to save your home. If that is not the case, then another job might not be a

temporary solution, and the second job might be needed to create enough income to make

the house payments.

When it comes to another job, I am not saying that the second job needs to be with an

established employer, who is outside of the home. If you have a hobby that you enjoy,

and can produce a valuable product or service, which others are willing to pay for, why

not transform your hobby into a home-based business? Many successful businesses have

been created by this type of transformation.

You might be telling yourself, that you are already having a hard time making ends meet

every month, and building a business is the last thing you can do, since you don’t have

any extra money laying around to start it. I have good news for you. Who said that you

need to use your money to invest into your company to get your inventory and to market

your business? There is a great resource out there for people who want to start up a

business, and it is called SBA (Small Business Administration.) You visit a local SBA

office, near or around your hometown, or on the Internet at www.sba.gov, for suggestions

on how to start a business. You can talk with mentors from SCORE (Service Corp Of

Retired Executives,) which is a free service of the SBA, to get mentored in creating and

running your business. The SBA has several loan programs that will help you either get a

loan from your local bank, or introduce you to some venture capitalists, looking to invest

in good companies. I am not going to fully expand this subject matter; I just wanted to

let you know that if you truly want to start your own business, there are resources out

there that are willing to help.

If you don’t have a hobby or a passion that you can transform into a business, then going

outside the home might be your only option, to where you need to work for someone else,

and earn the money needed to save your home. Again, this might be just a temporary

situation, until you have established enough money to save your home.

To most people, the thought of getting a second job is not a well received thought, but I

have identified to you that getting a second job does not need to be looking for another

employer, where you really don’t like doing the work, and the only reason you are there

is just that you need the extra money; your second job could be the creation of a home-

based business, out of a hobby that you already enjoy doing, so why not get paid for

having fun? Also, I stated that this second job doesn’t need to be permanent, but it could

be just a temporary situation, until you get the money needed to pay back your lenders,

save your home, and get back on to your feet.

Chapter 8Grants

Another option that might be available to you is the use of grants, which are directed

towards homeownership or to help people get into owning a home. When you think of

grants, do you have any limitations? Do you just think of federal grants? Do you think

of state funded grants? Or do you expand your mind beyond what most people do, when

they think of grants?

Grants come from all areas of the community. Here are some areas that need to be

considered, when researching for grant agencies:

1. Churches/Religious Organizations

2. Local/State/Federal Governments

3. Community Outreach Programs

4. Charitable Organizations

The list does not stop there; the above list is just a sample of places that you need to think

about and to research in your area for places to apply for grants. Start making calls to

various agencies; search the internet for grant agencies, to see what is out there. The

Catalog of Federal Domestic Assistance (CFDA [www.cfda.gov]) is a good place to start,

but it is not the only place to look, as the title indicates it is only for federally funded

grants.

Not many people realize that several churches and religious organizations have put

money aside (a benevolence fund) to help out their community in their times of need. If

you belong to a religious organization, contact the leader of the organization, and ask if

they have such a reserve for this type of aide. Because not too many people think of

going to these types of organizations for help, the competition for getting money from

these types of organizations is very low, and therefore if the church or religious

organization has programs available, you have a better chance of getting the needed

funds. Now you should not expect that even if the religious organizations do have public

grants, that they will be able to give you 100% of the money required to save your home,

but every little bit helps; keep applying for as many grants and programs as you possibly

can, until you have the needed money to save your home..

The obvious grant agency is the federal government, and because everyone thinks of the

federal government for grant money, the competition for getting grant money from the

federal agencies is a lot fiercer, as you are now fighting for the money with thousands if

not tens of thousands of others. Because of this high demand to seek money from the

federal agencies, these agencies put restrictions and requirements when applying for their

grants. If the applicant (you in this case) forgets to provide sufficient information, forgets

to fill out a section properly or you do something that doesn’t follow the rules exactly,

which the federal granting agencies will tell all their applicants to follow, even if you

don’t think that it is important to include all of the information or follow the rules to the

letter, the grant application will be rejected.

Looking for missing information or improperly filled out applications is usually the first

filtering technique that these agencies use, to reduce the number of applications that are

further reviewed. Grant writing is strictly following the rules, where unless the applicant

(you) have successfully written grant applications before, it is better to hire a grant writer,

preferably one that has successfully applied for the specific grant before, than having you

try to fill out the grant application correctly. The only negative to this, is that you might

not have the money to pay for the grant writer. The reason you are considering applying

for the grant is to get money, not spend it. And for that reason, applying for federal or

federal grants might be out of reach for most homeowners. At the local level, the

applications are a little easier to complete, and therefore the application can be filled out

to the specifications of the granting authorities by you. Please don’t think that I am

saying that you can not apply for federal and state grants yourself, you can; I am just

trying to emphasize that at the federal and state level, due to the high amount of

competition, you grant application needs to be written so that it makes a large impact to

the granting authority, so much so, that you are selected from the thousands of other

applicants.

Federal grants are nice, when you get them, and if you have the patience. Usually getting

money from federal grants is a very slow process, and it could be a futile cause, if you are

about to lose your home. The reason for the large delay in getting the money from

federal agencies is due to the number of applicants that apply for the grant, and the

agencies quest to find the most eligible applicant.

Local and State grants generally are for the citizens that reside in the local town, city,

county and state; or will be used to improve the town, city, county or state in some

specific way. Therefore the competition for these types of grants is reduced, as now you

are not competing with the entire nation for the grant money, but still the competition for

the grant money can still be very great. While local and state grants are easier to receive

money from, due to the reduced competition, there are some things that you need to

realize.

First, the money awarded from local and state grants are usually lower, as the funding

(which come from state and local taxes, as well as some federal subsidies) of these grants

tends to be smaller. The grant at a local or state level could be a few hundred dollars of

relief, whereas at the federal level it might easily award thousands if not significantly

more. Also, you need to realize that grants provided at the federal level might not be

available at the state level or even the local level. This is the same for state funded

grants; they might not be at the local level or even the federal level. That is why you

need to research what grants are available, at which level, and what are the qualifications

for the grants.

Community Outreach programs are another good source for obtaining money in order to

attempt to save your home. These outreach programs are usually non-profit corporations

that may or may not be funded at the federal or state level; sometimes churches or other

religious organizations might help fund an outreach program, instead of administering the

grant programs themselves. Also funds for outreach programs can come from charitable

foundations, corporations or fund-raisers, if they do not want to administrate such

charitable programs themselves. Places to inquire about these outreach programs could

include local churches, housing authorities, local “soup kitchens” and other places that

the destitute might seek for help. Not that these outreach programs are hard to find, it is

just that generally these outreach programs do not spend their money on advertising, as

the money is best suited for providing help to the needy. The key to find these types of

programs is to network with people in the area, so that you have more options to try when

saving your home.

Charities are another great place to look for money to save your home. Some charities do

not have the man-power to administer grants, and as stated above, that is why they help

support a community outreach, to distribute the money, and some charities do have the

ability to accept applications and issue grant money to the winning applicants. As with

any grant, different charities support different causes. You will need to seek the

appropriate charities that are available to you.

As you can see, there are numerous areas that you need to consider, when you start

thinking of places to look for grant money. Just do not limit yourself to federal grants, as

the competition is very fierce and time consuming, but look for areas in your

communities that are created to help people that are in need of help. Also remember that

persistence is a requirement when dealing with finding money from grants, but through

hard and diligent work, I am very confident that you will be successful in obtaining some

form of help from the various organizations out there.

Chapter 9Fund-raising

Fund-raising is a great resource to help gain the necessary money to save your home. All

the elected government officials, like the president and the United States senators, hold

fund-raisers in order to fund their campaign. Why not you? Of course, you are not

running for office, and chances are that you will not hold the political clout that a public

candidate would hold, but what about the student raising funds for a field trip, or the Girl

Scout selling Girl Scout cookies? All these are fund-raisers for private causes, and

millions of dollars are given every year for these causes. Instead of just walking the

streets begging for money, you could either create a product (from your hobby/business)

that you could walk around your neighborhood selling or there are several fund-raising

organizations that supply people with fund-raising materials, like candy bars, cookies,

and other trinkets, at a low price, so that it allows for a small profit to be made. Now I

am not telling you to commit fraud and have you tell your neighbors, friends and family a

lie. I would expect that you would tell the truth, which is that you are raising funds in

order to save your home. People can be quite generous, and many really are not too

concerned with if you are fund-raising for a big cause like breast cancer research or if the

reason for the fund-raiser is to allow you to keep your home. In fact there may be more

compassion given to you, if it is known that you are working on saving your home.

You could also ask your local church or school if you could use their building to hold a

fund-raiser, where maybe a meal could be served, or a live auction held where the profits

are given to you. Along these lines, asking local businesses to donate some of their

services and/or products to be auctioned off at the fund-raiser can bring in tremendous

profit for your cause of saving your home. Again, I trust that you will truthfully

represent your cause to the local businesses, so that fraud is not committed. You will

probably be delightfully surprised at the generosity that you will experience with the

local companies; as long as you ensure them that you will promote their name, during the

fund-raiser.

Many large organizations use fund-raising to either find cures for illnesses, raise money

for political campaigns and for school field trips, so why can’t you raise money to save

your home? Isn’t it just as important to you to raise money so you can keep your home,

as it is to have a cancer-victim raise money to find a cure cancer? This technique is

rarely thought of by people that are looking to save their homes, but with a little honesty

and integrity, this technique could be a great way to earn the needed money, so that you

are able to save your home.

Chapter 10Other ways to get money

If you have attempted all the different options that have been discussed in the last seven

chapters (Chapters 4 – 9) and yet you still haven’t found a way to create enough money

to save your home, there are a few more options that I will discuss in this book, under this

chapter.

In chapter 4, I mentioned that you could ask for a loan from your current employers, and

if you were unsuccessful with that technique, and your current employer offers their

employees bonuses for meeting productivity goals, you could ask your employer for an

advancement of your bonus. Again, this technique is only for people who get bonuses or

earn commissions outside of their normal payroll income. If you do not get bonuses,

then it would not do any good to ask for advancement on your paycheck, because you

will need that money for making your monthly house payments. Getting a large chunk of

your paycheck advanced to you, might give you enough to save your house, but then

what happens when you need to pay your house payment, let alone other monthly bills,

and you are not receiving your paycheck, because you already received the money?

Another technique, if you own other pieces of real estate, which have equity in them, is to

refinance your other real estate holdings, to pull out the equity so that you can save you

home. In order to provide you with a clear example of this technique, please review the

case study on refinancing your rental real estate (Chapter 21.)

If you own more than one piece of real estate, like vacant land, abandoned buildings,

other houses and rental property, you could strike a deal, where you can sell one of your

other pieces of real estate to give you some money (if not all) that you need in order to

save your house. Please review Chapter 21, to view several options that may be available

to you, when you hold other real estate.

Lastly, you could resort to begging for the money that you need to save your home.

Some might think that his technique is beneath them, and will not do it, but desperate

times, requires desperate measures. You can not expect to make all the money you need

in a day, it might take several days, or months, depending on the types of donations that

you receive. This is not the most proud thing you can do, but as I told you throughout

this book, you need to start thinking of various ways to make money, and not to discard

one option, just because you don’t think that it would work. This is a prime example of

that type of thinking.

Finding money can be hard work, and sometimes you need to resort to doing things that

are legal, but you really would like to avoid at all costs. I am sure you are not proud, if

you need to resort to begging to strangers, and I truly feel for you, if this is what you need

to do, to get the money to save your home. I also congratulate you, if you do resort to

begging, as you are truly committed to trying to save your home.

This is the last chapter discussing ways to find money in order to save your home, the rest

of the book will discuss different ways to try to keep your home and ways to sell it, if it

comes down to that.

Section IIIKEEPING YOUR HOME

This section will identify several ways that you may be able to salvage your home from

being foreclosed upon. Though these techniques have provided help by many

homeowners, unfortunately there are no guarantees that some of these techniques are

available to you, as each situation is different. You might have several investments that

you can extract money from; you might be literally on the edge of complete financial

ruin; you could have great negotiation skills; you might not like to “rock the boat” and

avoid conflict. Even though there are literally endless numbers of situations that each

homeowner could be in, this book is a great resource to provide you options and

techniques that could help you out of many of the situations. By providing you several

different options, the book allows you to pick and choose which options and techniques

might apply to you. Also, upon reading the chapters contained within this section, you

might start thinking of other ways that might work, not covered in this book... That would

be great! This book was written to both provide time-tested techniques as well as get you

to start thinking of other ways that you might be able to save your home. If you discover

a technique that is not covered, we would be more than happy to hear from you, so that

other may share in your success.

Lastly and ultimately, when it comes to having success saving your home, it all comes

down to being able to negotiate an agreeable solution with your lenders. Some lenders

are willing to work with you, to get to a solution that both you and the lender agree to.

Some lenders can be very inflexible, where it seems that there is no way that a deal can

be reached. Don’t give up hope if that happens. Just keep trying other techniques to

attempt to work something out. The more you keep trying, the better the chances are that

you will be successful in keeping your home, and that is the goal, right?

First and foremost, if you are wishing to save your home from foreclosure, you need to

have solved the hardship that made you fall behind in paying the monthly house

payments, in other words, whatever caused you to stop making the monthly house

payments needs to be resolved before you even attempt to try to save your home. What

good is it to go through all the steps required in saving your home, if at the end of it all

you can’t make the monthly house payments that you negotiated with your lender? If

you are still facing the hardship then you need to face the reality that the odds are not in

your favor, but I am not saying that all is lost. There are still ways to attempt to save the

home; it is just going to be a little more difficult, as the number of techniques in saving

the home is a lot less.

If you are still in your hardship situation, then a budget is extremely important, because

you need to understand how much you can actually afford and what can be sacrificed (if

needed) in order to keep your home, during this hardship. You need to ask yourself: what

is the most that you can afford per month for your house payments. The number that you

come up with must be reasonable, and not too much of stretch that you truly can not

afford the house payments each month. The number that you come up with must be large

enough to be reasonably accepted by your lenders. If the number is too high, you might

be in threat of failing to maintain the monthly house payments, if another hardship is

experienced. If the number is too low, then the chances of having the lenders take the

negotiations seriously will be low as well.

There are three different ways that you can keep your home, but within these three ways,

you have literally hundreds of different ways to implement them. The three different

ways to allow the homeowner to keep their homes are the following:

1. Reinstate the Note

2. Forbear and Modify the Terms of the Note

3. Refinance the Note

So, with that, let’s get started in learning more about what options are available in

attempting to keep your home, and some of the various ways that you can implement

them!

Chapter 11Bankruptcy

Now really this subject doesn’t fit in the section for saving a home, nor does it fall in any

other subject that is covered in this guide, but since the use of bankruptcy can be a useful

tool for some homeowners trying to keep their homes from foreclosure, I have decided to

put this chapter in the Keeping Your Home Section, opposed to placing it at the end of

the guide, like in the Resources Section. I must again remind you of the disclosure at the

front of this guide, that I am not an attorney, and that you are advised to retain competent

counsel to determine what state and/or local laws or regulations may apply to the user’s

particular business. With that being said, let’s discuss how bankruptcy can help you keep

your home.

Let’s first start with a little history of what bankruptcy is. Did you know that bankruptcy

is a Biblical term? Read Leviticus 25:8-55, the Year of Jubilee, where every fifty years

all debts are wiped clean and all property is returned to the original holder. Also, it can

be found in Deuteronomy 15:1–2 which instructs a release of debt every seven years.

Some people think that bankruptcy is the answer, to saving their homes, but unfortunately

that is not the case. Though bankruptcy is a great tool for some to stall the foreclosure

proceedings, it is not a way to keep your home from foreclosure.

This is not a decision that should be made lightly, and it is strongly recommended that

you seek the advice of a lawyer that is familiar with the bankruptcy process. It is also

important to consider the timing of a bankruptcy declaration with respect to the “Notice

of Default” filed on your home. If you are at the beginning of the default process, you

should have enough time to explore other options such as the sale of your property or

refinancing. If the foreclosure is imminent, bankruptcy may be your only way to delay

the sale of your property. If you decide to declare bankruptcy, it is important to note that

the courts will take control of your finances and that this will have a long-term, negative

impact on your credit reports. Hiring a good bankruptcy lawyer is a wise investment.

Bankruptcy is a federal court process that helps individuals and businesses repay their

debts under the protection of the bankruptcy court or wipe those debts out completely.

When you file for bankruptcy, an automatic stay goes into effect, prohibiting your

creditors from taking action to collect the debt without the approval of the court. There

are different types of bankruptcy: Bankruptcy Chapter 7 and Bankruptcies Chapter 11, 12

and 13. Chapters 7 and 13 apply to individuals, such as homeowners, and therefore I will

limit my discussion to these two chapters of the United States Federal Bankruptcy Law.

Bankruptcy Chapter 7 is known as a liquidation bankruptcy.

In a liquidation bankruptcy you turn your personal property over to the court, which sells

it and uses the proceeds to pay your debts or the court allows your creditors to repossess

your property (for example: your house). Now before I go any further, you need to

understand that the courts wont sell your house, they will look for assets that have value

that could be sold at an auction to create funds to pay back your creditors. Additionally,

every state has a “homestead exemption” clause, where every state is different, (so you

will need to discuss this with an attorney,) but the debtor is able to keep some (if not all)

of the equity of their assets. (Again, you will need to consult with an attorney in your

state, so they can help explain it to you and tell you the state's “homestead exemption”

figure [I am not an attorney, so I can not tell you more than to ask about it to your

attorney.]) Creditors can no longer come after you for payment, but the bankruptcy stays

on your credit history for 10 years and you may be denied credit during that period. If

you are behind in your mortgage payments, you could lose your house in a Chapter 7

bankruptcy. Filing for bankruptcy has very serious consequences and should not be

entered into lightly. Having your debts erased does not solve your long-term financial

problems if you have irresponsible spending habits, but sometimes it's the only way out

of a crushing financial burden caused by job loss, medical bills, or other circumstances

that are out of your control.

Bankruptcy Chapter 13 is known as reorganization bankruptcy.

In reorganization bankruptcy, you file a repayment proposal with the bankruptcy court.

This bankruptcy does not release you from making payments. You will have to

immediately start making your regular payments plus the catch-up payments as described

in your repayment plan. During the repayment period, the court will place restrictions on

how you can spend money. In many cases, a set amount will be garnished from your

wages and a trustee of the court will make the payments to your creditors. This type of

bankruptcy makes sense only if you have a regular job with regular income and are sure

you can stick to the repayment plan. The majority of debtors never complete their

Chapter 13 repayment plans. Although most people file for Chapter 13 bankruptcy

assuming they'll complete their plan, only about 35% of all Chapter 13 debtors do. Many

drop out early in the process, without ever submitting a feasible repayment plan to the

court. If you do not expect to be able to make payments when you file for Chapter 13,

then you may be doing more harm to yourself than simply doing nothing. Not only you

will lose your house to foreclosure but you will also have BANKRUPTCY stamped in

your record and it usually stays there for 7 to 10 years.

You should also consider the fact that, when you file bankruptcy, any cosigner on your

mortgage automatically becomes liable for the full amount of a co-signed debt. If you do

not want this to happen, you should not file or you should make arrangements with the

court for repayment. The problem is that even debts you do not want included (such as a

loan from a friend) must be included since the court does not accept any partiality.

Bankruptcy will not always be accepted by court. A judge could dismiss bankruptcy, if it

can be proven that you recently ran up debt knowing you would declare bankruptcy (for

example:. a vacation charged to your card in the last 60 days), or you unloaded assets to a

friend, or you have concealed assets or liabilities. When considering filing bankruptcy

you must ask yourself if this will solve your problems. In case of foreclosure there are

other options and you should consider all of them.

There is a new bankruptcy law out there, that you should be made aware of, and it is

called Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of

2005, which became effective on October 17, 2005, which when signed into law

President George W. Bush stated:

Under the new law, Americans who have the ability to pay will be required to pay back at

least a portion of their debts. Those who fall behind their state's median income will not

be required to pay back their debts. The new law will also make it more difficult for serial

filers to abuse the most generous bankruptcy protections. Debtors seeking to erase all

debts will now have to wait eight years from their last bankruptcy before they can file

again. The law will also allow us to clamp down on bankruptcy mills that make their

money by advising abusers on how to game the system.[1]

According to the BAPCPA, if you are considering filing for bankruptcy your finances are

reviewed and put through a "means test", which makes it more difficult for you to file a

Chapter 7 bankruptcy, when most of your debts are primarily consumer debts, such as

credit cards and personal loans. With this new “mean test,” your lenders can often get

your bankruptcy discharged more easily than before this act was enacted. If you do not

qualify for a Chapter 7 bankruptcy, because you failed the “means test”, or the courts feel

that the bankruptcy will not provide you relief from your delinquent secured debts, you

can still seek file a Chapter 13 bankruptcy which does not require repayment to general

unsecured debts, such as credit cards or medical bills.

Additionally, with the new laws in force, you need to sign up and take credit counseling

with approved credit counseling agencies before you can file a bankruptcy and you need

to sign up for personal financial management education in from approved agencies prior

to being granted a discharge of debts under either a Chapter 7 or Chapter 13 bankruptcy.

Bankruptcy may be an opportunity to keep your home, if you just have too much

consumer debt, like credit cards, or other non-secured loans, where making payments to

those lines of credit, causes you not to have enough money to make your house

payments. Now I am not advocating that using bankruptcy is a great way to be

irresponsible, by running up large amounts of debt, and then say that you will just declare

bankruptcy so that you are able to benefit from your spending habits, but not be

responsible to pay for your spending. I am just saying that if you had all intentions of

paying off your debts, but some major hardship came around that caused you not to be

able to pay off your debts, and this hardship also is causing you to lose you home, using

bankruptcy may be an option to get you back on your feet.

Again, it is best that you seek a professional bankruptcy attorney or counselor to give you

the legal advice that will best suit your needs, on your quest to keep your home.

Bankruptcy is a great tool to give you more time to work out a solution with your lenders

to keep your home; it is not a way to keep your home, without making your monthly

payments.

Notes

Chapter 12Reinstating the note

Reinstating the Note simply means that you are paying back the lender all the back

payments, all the late fees, attorney fees, and all the other fees and charges that the lender

added to the late payments at the time that you stopped making payments.

Also, if you are still in your hardship situation, then there is no need to examine ways to

reinstate the note, as you are not be able to maintain the house payments, because the

reason for falling behind will cause you to fall behind again, but you will be in a much

worse off situation, as you would have paid the lender a large sum of money, just to lose

all that money. So, again, if you are still in the financial hardship, which caused you to

fall behind in the first place, then stop and go to one of the other chapters which describe

another method that might be available in saving your home, which is better suited for

your situation.

Here is an example of what is involved in a reinstatement: Let say that the monthly

house payment is $1,400.00, and you had stopped paying the house payment for six

months. So $1,400.00 * 6 = $8,400.00. But that is not all. The lender might have a late

fee of $100.00 for each late payment for each month that the payment is late, and since

you haven’t paid for six months that is another $600.00 + $500.00 + $400.00 + $300.00 +

$200.00 + $100.00 = $2,700.00 (note: it is $100.00 PER MONTH PER LATE

PAYMENT, unbelievable isn’t it.) Then let’s assume that they add $1,500.00 for

attorney fees. Then you have processing fees, appraisal fees and other legal fees, so let’s

assume that all that comes to $2,500.00. Now I am not adding in if the lender had to pay

for homeowners (hazard) insurance to the house, which I have seen the premiums being

600% the average costs of regular premiums. So let’s examine how much we are up to:

$ 8,400.00 House Payments

$ 2,700.00 Late Fees

$ 1,500.00 Attorney Fees

$ 2,500.00 Processing/service/appraisal fees, _________ other foreclosure fees

$15,100.00 In Arrears (total owed) to the lender.

So you can see, in this simple example, if you missed $8,400.00 in monthly house

payments you could now owe about $15,100.00 (close to DOUBLE.)

Loan Reinstatement is the option that all lenders want, when the note is in default (when

a person stops paying their monthly house payments, they are considered in default.)

They want to get all their money that was owed them, and if you pay the lender all this

money, then they will stop calling you, and they will start to accept the monthly house

payments as if nothing ever happened, but there is one major problem. You didn’t have

the money before you stopped paying your house payments, and unless you just won the

lottery, you probably still don’t have any money that you can give to the lender, and

certainly not all the money that the lender wants.

So does that mean that this method of trying to keep the house is out of touch, and only

available to those who actually had a windfall of money? Not at all; all it takes is some

thinking outside of the box, and thinking of ways that might be available to you as

sources of income.

To reinstate the note, requires that you are out of your hardship, that you found enough

money to pay back the lender all the missed monthly house payments, all their late

charges and other fees; and in doing that, usually the lender will forget that you ever

missed a single payment. The foreclosure should be wiped off your credit report, and

everything will be as if it never happened. Reinstatement is what the lender wants from

you, but many are not able to come up with enough money to do such. In the next

chapter we will discuss forbearance agreements, which is more common between

homeowners which overcame their hardship, but don’t have all the money they need to

reinstate the note.

Chapter 13Forbearing the Note

Forbearance: [fawr-bair-uhns] – noun: an abstaining from the enforcement of a right.

(Dictionary.com Unabridged (v 1.1). from Dictionary.com website: http://dictionary. reference.com/browse/forbearance)

I needed to quote the term “forbearance” to let you know that when you are negotiating

with your lender, for a forbearance agreement, you are asking your lender to be patient

with you and to not continue with their right to foreclose on your house. Forbearance can

involve a lot of different techniques; some will be not acceptable to your lenders, while

others are able to be negotiated. Each lender is different, and therefore what one will

accept, might be unacceptable to another, so you will need to possess the skills of a good

negotiator, in order for you to work out a good deal for you and your lender.

Negotiations are key to getting to an agreement that is best for you and your lender, if

you are not able to perform negotiations well, you will either be unable to work out an

agreement with your lender, and therefore will lose your home, or the agreement that you

and your lender come up with might not be in your best interest.

Lenders spend thousands of dollars and hundreds of hours training their loss mitigators (a

representative of your lender, who is in charge of negotiating an agreement with people

in default,) so that they have the proper training to negotiate deals. Do you have

thousands of dollars in training, or spent hundreds of hours training or negotiating with

others? Most people are not prepared to deal with their lender, and therefore “hit the

brick wall” fast, just leaving them extremely frustrated. If you have tried to work with

your lenders, have you felt frustrated and felt like they were being unfair in their

demands? Again, if you are not properly trained, your lender will eat you alive, leaving

you feel frustrated and maybe in a position where you made a deal that was not in your

best interests, and you “lose.”

Before I continue in this chapter, I want to let you know that our company has several

years of experience working with many lenders, and have worked on several

homeowner’s behalf to come to agreements that both the lender and our clients were

happy with. So if you are not a strong negotiator, you need to contact our sister company

at Inquiries@Synergy-Properties.com so that they can work on getting you the best

deal that we possibly can. Don’t get stressed out negotiating with your lenders, let us

take away that burden, so you can concentrate on getting your life back together.

First, you need to understand that the lender is in the money lending business, and not in

the home ownership business. You need to keep that in mind, when negotiating with the

lender, you could tactfully remind the lender that if a deal can not be agreed upon, that

the lender will need to take back the house and the lender will need to deal with making

the repairs, selling the house and lose all their money (arrears, interest, foreclosure costs,

etc.) that you will not pay them, unless you can come up with an agreement. Of course,

they have already considered that before they started the foreclosure process on your

house, so telling them that, might just make them less willing to work a deal with you,

even more so than what they might have already shown you. Just keep that in mind,

while you negotiate.

Second, the subject of negotiating, let alone negotiating forbearance agreements, is an

advanced level subject, which due to the complexity of this subject, can not be discussed

in this book. This book is an entry level book, dedicated to training you in the various

techniques that are available in attempting to save your home. If you are interested in

understanding how to negotiate forbearance agreements, please feel free to review the

offerings of The REI Training Warehouse, by going to their website at

www.REITrainingWarehouse.com or emailing their customer services department at

Inquiries@REITrainingWarehouse.com.

The different types of forbearance agreements fall under the following:

1. Taking the arrearage, fees and expenses that you incurred, by going through the

foreclosure process and putting it at the back of the note

2. Taking the arrearage, fees and expenses that you incurred, by going through the

foreclosure process and making arrangements to pay it back in monthly

installments

3. Negotiating new terms for the note

a) Modify the interest rate

b) Lengthen the amortization schedule

c) Convert to an interest-only payment

d) Convert to a negative amortization payment

The first type of forbearance agreement is where you negotiate with your lender to put all

the missed house payments, all the late fees, all the legal fees, etc. on the back of the

note, this means that you agree that you owe the lender the money, and that you will pay

them back when you refinance the note, sell the house, or you negotiate that at the end of

your note term, you will continue to make additional payments, until all the money is

paid. Usually, to get this type of forbearance agreement, you need to give the lender a

lump sum of money, $5,000.00 for example, as a good-faith offering that you are trying

to work out an agreement with your lender; it is just that you can’t reinstate the note,

because you don’t have all the money. The amount that you need to give your lender as a

“good faith offering” needs to be negotiated. Of course your lender is looking for the

most that you can give them, and you are looking to give them the least that they will

accept. If this negotiation is properly done, you will come to an agreeable amount that

you can afford to pay and the lender is willing to accept. This type of forbearance

agreement does not increase your monthly house payments; it just extends the amount of

time you are required to make the house payments to your lender.

The lender would be more acceptable with the next type of forbearance agreement, where

you negotiate that you will make additional payments above your current monthly house

payments to the lender, which will be applied to the money you owe the lender for the

missed monthly house payments, late fees, etc. This will increase your monthly house

payments, so you will need to consider if this type of forbearance agreement will work

with your income. Again, the lender usually is looking for a good-faith offering with this

type of forbearance agreement.

The next type of agreement that you may be able to negotiate is called “loan recasting” or

“loan modification.” This is usually not a forbearance agreement by itself, but since it is

usually associated with forbearance agreements, I have included this technique within

this chapter. Loan recasting can be used with one of the above forbearance agreement

types, in order to make the monthly house payments more affordable to you. Loan

recasting is when you negotiate with the lender to modify the terms of your note, so that

the payments become affordable to you, and therefore you are able to make the monthly

house payments. Such things can be changed like the interest rate, or the number of

months to pay the loan back, or changing what you are paying back. Please review the

examples found in Chapter 21, to see what different types of modifications that you can

work with your lender, and these examples shows that if you modify one or more of the

terms, how these modifications impacts the monthly house payments. Note: some

modifications do very little to the house payments, while some significantly drop the

house payments. You need to negotiate the best deal that your lender will accept, so

make sure that you calculate what modifications would be best concerning your loan.

One thing I will tell you, when it comes to negotiating, be prepared. Make sure that you

have the information ready to give to your lender, when they ask for it. If you are

looking to recast your note, make sure that you have the numbers and terms that you are

looking for before you call your lender, also be prepared to persuade your lender that the

deal that you are suggesting is in their best interest and help them understand that you are

trying to get to an agreeable solution, if they are willing to be flexible.

Also, to increase your negotiation success is to pretend that you are the lender, and you

have someone that owes you money, but is failing to pay you back. Would you trust

them to make good, if they asked you for what you are trying to ask the lender? You

have to be reasonable in what you are trying to negotiate.

Lastly, it is really up to the lender, as to if they want to make the agreement with you. If

you prepared well, showed the lender why working with you is in their best interest, and

you are asking for reasonable agreements, your chances are a lot better than if you were

not prepared for the negotiations, or you are asking for unreasonable things from your

lender. But it is ultimately up to the lender. You might offer the lender the best

negotiations agreement that was ever given, but sometimes your lender’s representative

(loss mitigator) is in a bad mood, or just doesn’t see that it is in the best interest of the

lender to take your agreement, and you could be unsuccessful. If that is the case, try

talking with another loss mitigator or their supervisor, to see if you can get something

negotiated.

Again, negotiations is a very tough game to play, and your lender has spent a lot of

money in training their representative in negotiations, are you prepared to get into this

game with your experience? It might be in your best interest to hire an experienced

company that has deals with lenders regularly, to negotiate your forbearance agreement,

as lenders can be very hard to negotiate with, by discouraging you through threats and

other tactics to get you to agree to a forbearance agreement that is not in your best

interest, and could result in you losing the home after a few months, because you are

unable to afford the payments or the other terms that they negotiated with you. Getting a

third-party involved in the negotiations can disarm the lender from trying to use

techniques like telling you that it is your fault for being in this situation, and that you

need to make good on your promise, since the third-party had never made such promises

or otherwise was involved when you were getting the money from the lender. If you

wish to use an experienced company, to perform your negotiations, you need to contact

our sister company at Inquiries@Synergy-Properties.com, so that they can work on

getting you the best deal that we possibly can.

Remember, forbearance means that your lender is showing you patience, and not going

through with their right to foreclose on your house, but instead are willing to work on an

agreement with you to get their money back. Along with the forbearance agreement that

has been negotiated, you might want to recast the note, so that you can get better terms, in

order to reduce the monthly house payments so that you can keep your promise to pay

back the lender the money that you borrowed.

In the next chapter, we will discuss how you might be able to refinance your home as an

option in seeking a way to save you home from foreclosure.

Chapter 14Refinance the note

The next option that you have available to you, when you’re attempting to save your

home is to look for another lender to refinance the house. The reason I mention that you

will need to look for another lender, other than trying to refinance with your current

lender is because once you have fallen into foreclosure, your current lender is looking for

any way to get their money back, and they are not interested in keeping you as a

borrower. They just want to forget that you ever borrowed money from them. Is that

childish? Maybe, but if you had someone that you lent a lot of money to, and they didn’t

pay you back, you would be looking for a way to get it back, and it certainly would not

be by allowing them to keep borrowing money from you.

First let me lay down the guidelines that most, if not all lenders use, when they are

deciding if they want to refinance a homeowner that has a pending foreclosure on their

credit report. Simply the guidelines check to see if there is enough equity in the house

that the new lender is considering lending money against. And the magic number that

most lenders use is 60% LTV (Loan To Value,) which means that you need to have 40%

equity. So, here is a rule of thumb that most lenders use: take the value of what your

home would appraise at or what you think it is worth, and multiply that number by 0.6. If

the number you get is more that what you currently owe, including all the fees and taxes

that are owed, the chances are you can get refinanced pretty easily. If the number that

you get is less than what you owe, (you owe more,) then chances are very small. Again,

this is just a rule of thumb, some lenders will refinance when there is less equity in the

house, and some will need more equity. You will need to contact a mortgage broker or a

lending company, to see if their requirement is more or less than 60% LTV.

Now that I said that, there are some exceptions to needing this large amount of equity in

your home, in order to refinance.

Due to the record-breaking number of foreclosures that lenders are seeing since 2001, the

United States government have been trying to come up with ways to come to the aide of

the lenders and homeowners, without going so far as to bail them out, as of yet. I am sure

that you are aware of the fact that every year new records are broken in regards to

foreclosures, so you are definitely not alone. One solution that the United States

government has come up with is a program called FHASecure. FHASecure allows

homeowners the ability to refinance their homes, without having large amounts of equity,

if the homeowner failed to make their house payments because the interest rate on their

adjustable rate note adjusted, (increased) and now they are unable to afford the monthly

house payment. That is a pretty strict guideline, but since a lot of homeowners purchased

or refinanced their homes, when the interest rates were very low, and took out a short-

term ARM (Adjustable Rate Mortgage,) which converted to a higher rate interest rate in

the future, like two or three years later, many people bought homes than were more

expensive that what they could normally afford.

If you are a victim of having your monthly house payment adjusting (increasing) to a

level that now it is not affordable, and that is the only hardship that prevents you from

making your monthly house payments, then talk with a mortgage broker or a lender about

refinancing your home, using the FHASecure or HAMP program. Please review Chapter

25 for more information.

If you are a homeowner, that has more than one note on your home, like you borrowed

80% of the house purchase on one note, and then had another lender (or the same lender)

give you the other 20% as a second note on the house, thus you purchased the house

using 100% financing, there might be a way to reduce your monthly house payments, by

refinancing the house, and instead of getting two separate loans on the house, you convert

(consolidate) it into one note, which is large enough to pay off both notes. So, instead of

making two monthly house payments, you just need to make one, (to the new lender.)

Why is that better than making two house payments, you might be asking. Simple,

usually the lender who takes a second, third, etc. note, wants a higher interest rate to

allow you to borrow the money. If you can convert the two notes into one, then the

lender generally will have a lower interest rate, which in turn lowers you monthly house

payment. Again, usually the lender wants to see that there is more than enough equity

(40% equity) in the house, so if you know that your house has appreciated (went up in

value) significantly, this option might work for you. Remember, if you initially bought

the house with 100% financing, the house would need to appreciate significantly. For

example, if you bought a house for $150,000.00 with 100% financing, the house would

need to increase in value to now be worth $250,000.00 to cause the house to have 40%

equity or 60% LTV.

The usual requirement that you need to refinance your house loan is that your house

needs to have at least 40% equity, before anyone will be interested in refinancing you.

There are a couple programs out there that allow you to refinance your notes, when you

don’t have a lot of equity in your house, but there are strict guidelines that are required to

be eligible for them. Talking with your mortgage broker or a lender will help, in seeking

any programs that might come up that are intended in helping you refinance your house,

so that you are able to save it.

This was the last chapter that provided you with options in saving your home, if you have

exhausted all the techniques, and still haven’t found a way to save your home, it is in

your best interest to realize that you need to get rid of the house, so that you can salvage

your credit, and relieve the stress that your house is causing you.

Notes

Section IVGETTING RID OF YOUR HOUSE

I included this section in this book, because even though you wanted to keep your house,

sometimes you don’t have the resources or the lender just doesn’t want to come up with a

deal that both you and the lender can agree to, it is better to try to get rid of your house

than have the bad mark on your credit report. You might think that your credit report

doesn’t matter, so why even try to keep the foreclosure off. Well, these days,

unfortunately, everyone looks at your credit report. Not only people that would give you

loans, for houses or cars, but also insurance companies and even now landlords! Having

a poor credit report might forbid you from even being able to rent an apartment, if you

did lose your house. I don’t want you to be homeless, so that is why I needed to add this

section, to give you all the opportunities that I know of to make your life less stressful, so

you can enjoy it.

In this section will identify several ways that you may be able to either sell your house or

otherwise minimize the impact that the foreclosure will have on your credit report.

Again, though these techniques have provided help to many homeowners, unfortunately

there are no guarantees that some of these techniques will work for you, as each situation

is different. You might be in a “hot” market, where people are looking to live in your

neighborhood and houses are selling quickly; you might owe too much money on your

house, and therefore no one can afford to pay you what you owe, and either you need to

come up with money to sell your house, or you can’t sell it. Even though there are

literally endless numbers of situations that each homeowner could be in, this book is a

great resource for all the situations, as it offers you several of different options that may

be available to you, and allows you to pick and choose which ones might apply to you.

Also, upon reading the chapters contained in this section, you might start thinking of

different other ways that might work, that are not covered in this book... That would be

great! This book was written to both provide time-tested techniques as well as start the

reader to think of other ways that they might be able to get rid of their stressful situation.

If you discover a technique that is not covered, we would be more than happy to hear

from you, so that other may share in your success.

So, with that, let’s get started in learning what options are available in attempting to get

rid of your house in order to save your credit!

Chapter 15House Condition

When people think of selling their house, most people don’t realize that selling the

conventional way (For Sale By Owner [FSBO] or using a real estate agent) means that

they need to prepare the house for house buyers. You are thinking… “Of course,” but let

me explain what I mean. People, who are looking to buy a new house to live in, are

looking for the house to be in “perfect” condition, where they do not need to do anything

to the house. No painting, no carpeting, no yard cleanup, no general cleaning, etc. The

house buyers are looking to walk into their next house and have to do nothing, and I do

mean nothing! So what does that mean to you? If there are any repairs that need to be

done, cosmetic things that need to be done, any issues that need to be addressed, you will

need to fix or take care of them, before you start to let people go through your house.

And what that means to you is you are going to need to spend more money on your

house, just to sell your house. You are already in needing every dollar to live on; I am

sure that you do not want to spend money on something that you are intending to sell.

Here are some techniques that you should do, when thinking about selling your house, so

that you are aware of what other home buyers will see. You have to really take a good

look, and remove all your emotions regarding the house, since prospective house buyers

will most likely see flaws in the house, that you don’t. Are there any repairs that need to

be done? Get picky, because anyone that will be looking at your house will be.

1. Look outside. Walk outside you house, and look at the condition of the house,

landscape and neighborhood. You will need to pretend that you don’t own the

house, and you are looking to buy a house. Ask yourself:

a) Would you buy this house in the condition that it is currently in, or does it

look like it needs too many repairs?

b) Does the siding of the house look good, or does it need to be resided or

painted?

c) Does the roof look good, or does it look like it needs to be replaced now or

within five years?

d) Does the neighborhood around you look good or is it run down?

e) How do the windows and doors look? Are they in good condition, or would

you want to have then painted, caulked or replaced?

f) Does your house look pretty (have curb appeal) or are the bushes/trees

overgrown, look trashy, or otherwise does not look good?

g) Is the neighborhood safe, and child friendly, or are there drug houses near

by, that bring in crime?

h) Are there schools near by?

i) Are there any missing storm windows/doors, or screens?

j) What are other houses in the neighborhood selling for, and is the asking

price below that? Or can I get a better deal somewhere else?

2. Look inside. Now look around the inside of your house, and see if there is

anything that doesn’t look “perfect.” Did you know that about 80% of the

buying decision for a house is dependent on the condition of the kitchen and

bathrooms? I am not saying that all you need to concentrate on are these rooms,

but if these rooms are not in absolute perfect condition, your chances of selling

your house drops considerably.

a) Does the kitchen look “fresh,” (up-to-date) or does it have “ugly” cabinets?

b) Are the kitchen cabinets in good working order, or are they missing some

hardware (hinges, door handles, etc?)

c) How is the plumbing? Are there any leaks that need to be fixed?

d) Does the toilet work, does the shower/bathtub look good, or is there mold,

cracks in the walls?

e) Do the sinks drain, or are they stopped up or drain really slowly?

f) Do the bathrooms look clean and “fresh” or are they dark and not

appealing?

g) Do you need to go through one bedroom, to enter another bedroom? House

buyers don’t want a house, where you need to go through one bedroom, to

get to another. Having this situation, really limits your chances of selling.

h) How old is the furnace, and does it work? Do you think that it will need to

be replaced within the next five years?

i) How old is the water heater? Do you think that it will need to be replaced

within five years?

j) Are there circuit breakers, or fuses? These days, fuses are very outdated,

and many house buyers will not buy a house, unless it has circuit breakers.

k) Do the walls need painting?

l) How does the carpeting look? Is it worn, dirty, torn or outdated? If you

were going to purchase this house, would you want to replace it?

m) Look at the interior doors, are some missing or damaged? Do they need

painting?

n) How do the floors look, are they “beat-up” and need to be refinished,

carpeted or have linoleum replaced?

o) What size are the bedrooms? Are they larger than 12 feet by 10 feet?

Bedrooms smaller than 10’ x 12’ are considered small, and not very

desirable. House buyers today want bedrooms at least 10’ x 12’, and many

house buyers will not buy a house that has small bedrooms.

p) How many rooms are in the house? Most people today want to have a

living room, a dining room, a kitchen and a place for storage (basement,

attic or crawl space.)

q) If you have a garage, what condition is it in? Is the slab broken (small

cracks are okay, large gaping cracks and holes are not.)

r) Is the garage door working, and does it have an electric garage door opener?

s) How many parking spaces are available? These days, house buyers need

space for at least two cars, if not more. Not having the proper parking

places will cause house buyers not to purchase.

t) Is the house infested with mice, rats, bugs, spiders, etc?

u) Are the window panes (the glass) cracked or missing?

v) What other areas are in need of repair?

w) If you hired a cleaning service/maid, would your house look better, and

cleaner?

x) Is your house full of clutter, or is everything put away, and looks like a

“showroom house”?

I am sure that I could double the number of questions that I have described in this

chapter, as what you need to ask yourself, when looking at the condition of your house,

because when a house buyer looks at a house, these questions and more are going through

their mind. Again, this chapter is not to discourage you, but to make you realize what

you are up against, when you try to sell your house using conventional methods (FSBO

and using a Realtor®).

One solution is to get in contact with someone that will use unconventional ways to sell

your house, like a real estate investor, please contact our sister company, Synergy

Properties, LLC at Inquiries@Synergy-Properties.com, we have contact with many

investors that have the experience and ability to think of ways where your house does not

need to be perfect, and gives you ways to get out from your situation, with little or no

impact to you.

Unfortunately, people today are looking for the “perfect” house, that doesn’t need any

repairs or money spent on it, when they move in. And because of this houses stay on the

market for several months, if not years. This chapter identified many of the common

questions that go through people’s minds, when they are looking for a new house to buy.

If any of these questions are not answered positively. Meaning there was nothing bad was

seen, then the house might sell a little faster, but that in itself is not guaranteed. House

buyers are very particular when they buy, and the smallest little thing, might cause them

not to buy your house.

Notes

Chapter 16For sale by owner (FSBO)

This is the first chapter, dedicated to not attempting to save your home, but to sell it, in

attempts to get from underneath the “rock” that your house has put you in. I know that

some of you do not want to lose your home, but if you have tried all the techniques in the

previous chapters, you might need to take a step back and face reality… You need to try

and save your credit, so that you are in a position where you can get into an apartment,

get a car, or even get a bank account, so that you don’t need to pay all these unnecessary

fees to check cashing places, and you can cash in your payroll checks.

If you have tried everything prior to this chapter, I am sorry that you are facing this

situation, but take some comfort that taking action to attempt to save your credit will

allow you to try homeownership again, and a lot sooner than later. (I will not be

discussing the various techniques that you could use to improve your credit report, for

that type of information, please contact us at The REI Training Warehouse’s website

www.REITrainingWarehouse.com or you can contact us through email so we can let

you know of some other resources we might have available to you. Send your questions

and requests to Inquiries@REITrainingWarehouse.com.

The first way that most homeowners think of selling their houses is to put a “For Sale”

sign in the front yard, and hope that they get calls. Well, that is one way of selling your

house, and depending on the appearance that other people see when they view your

house, depends on how successful you can be in selling it. What I mean is, if you asked

yourself the questions that are found in Chapter 15 of this book, and looked around your

house for the answers, what would you see? Does the house need some minor cosmetic

repairs, like paint and carpeting? Or is there some more major repairs needed, like a new

furnace, hot water heater, a new roof or siding?

Unfortunately, home buyers today are looking to move into their new home and not need

to put money into it for a while. It is a buyers market, since the number of houses in the

market today is huge, and therefore the prospective home buyers will look until they find

the “perfect house.” I am sure that you do not have the extra money to put into your

house, so that all the repairs have been done, just to try to sell it. Also, if your house is in

need of repairs, and you are able to find someone who is willing to make an offer to buy

your house as is, chances are that the interested house buyer would offer you less than

what you owe your lenders, and you would not be able to accept the offer or you will

need to bring more money to the closing table, in order to sell your house, and we both

know, if you are in foreclosure, money is hard to come by.

Now putting a sign out in the front yard is a good start, with putting the word out there

that your house is for sale, but unless you live on a very busy street, not too many house

buyers will know that your house is up for sale, which means that you will not have as

many calls as you would like or need, so that you can sell your house quickly. So what

else should you expect to do, to increase the number of house buyers to look at your

house? You need to do a more active marketing campaign, meaning that you might need

to put your house in the classified ads of the local newspaper. You might want to put up

signs at major intersections around your house, pointing people to your house. You

might want to put up fliers in your local hardware and grocery stores, telling people that

you have a house for sale, and where it is located.

Enclosed, under Chapter 23, is a “cost of selling” worksheet, which identifies several

costs when selling a house, and will give you a rough estimate of all the costs that need to

be considered when selling a house. This worksheet will give you a rough expectation of

what money will be made or will need to be brought to the closing table, when you do

sell your house. It is just a tool and due to several variables, such as your current

situation with your house, your assumptions of costs and your calculations, an accurate

final figure can not be guaranteed.

These are a few techniques that most people use, when they are trying to sell their house,

and many of them work well, and many are very expensive to do. You probably are not

looking for ways to spend more of your money, especially when you are barely making

ends meet now.

There are a lot of things to consider, when trying to sell a house yourself, and there are a

lot of things that most homeowners don’t take into consideration, like marketing the

house, making the house look good (both outside as well as inside,) does the house look

clean or cluttered, etc. which in the end could cost them more in both time and money

than what they have or ever expected.

Notes

Chapter 17Using a Realtor® to sell

When people think of selling their house, most people think that they need to get a real

estate agent who is a Realtor®, in order to get the best price. It seems obvious, since the

real estate agent can put the house into the Multiple Listing Service (MLS,) which allows

thousands of other real estate agents to see your property. There are a couple flaws with

that type of thinking.

First, you realize that for this service, the real estate agent will want a commission,

typically 6% of the sales price, which means for every $100,000.00 that your house sells

for it will cost you $6,000.00. So for a $150,000.00 sale that is $9,000.00. Many people

don’t know this, but the commission is negotiable, meaning that the real estate agent

might want 6%, but you can attempt to have them take less. Paying the real estate

commission is fine, if you have a lot of equity in your house, so that you can cover this

additional expense, since you will need to raise your asking price, or come to the closing

table with cash. Do you have the equity to do that? I know that no one wants to pay

someone to sell their house.

Second, is your house in a state of disrepair? If you asked yourself the questions that

were in Chapter 14, and looked around your home, looking for the answers to the

questions, what would you come up with? Remember, people looking at your house,

when it is on the market are asking these types of questions, and home buyers today will

skip on a house, if there is work to be done to it, unless they can get the house for very

cheap, and usually that doesn’t really make a difference to these home buyers. They

want it to be perfect, or they will move to the next house, searching for the “perfect

house.” Can you blame them, if you just bought a new home, would you want to put

more money in it right away, or do you want to move in and relax?

The number of houses that are currently for sale is very high, and the number of months

that a house sits on the market, not selling, is getting longer and longer, and currently the

average time a house sits on the MLS (Multiple Listing Service) is six months, because

there are more houses available, and because people are looking for the “perfect house.”

This is not a good thing for you, if you are facing foreclosure, because time is not on your

side. You need to sell fast enough to allow the house buyer to inspect the house, then get

it appraised, then find a lender, then, then, then… You will need to do all this before your

lender takes the house to auction, kicks you out of your home and takes control of the

house. Using a real estate agent can be a good thing, if you have a lot of time to sell your

house, and you are not under any pressure to sell the house. Then you can keep it on the

market, until the right house buyer comes alone, be it six months from now or even one

year. As long as you are not in a hurry, and you can sell your house for enough, so you

can pay the Realtor® their commissions, I say, go for it, but we both know that you are

not in that position.

Enclosed, under Chapter 22, is a “cost of selling” worksheet, which identifies several

costs when selling a house, and will give you a rough estimate of all the costs that need to

be considered when selling a house. This worksheet will give you a rough expectation of

what money will be made or will need to be brought to the closing table, when you do

sell your house. It is just a tool and due to several variables, such as your current

situation with your house, your assumptions of costs and your calculations, an accurate

final figure can not be guaranteed.

Using real estate agents is a good way to sell a house, since they use their agencies name

and reputation to help sell your house. Also, they use various marketing tools that

improve your exposure to many people looking to buy a house. So, the homeowner

doesn’t have to worry about their own marketing, everything is being done by the real

estate agency. The negative aspect of using a real estate agent is that it can be very

expensive, in the form of real estate commissions, when you do sell it. As long as you

can sell it for a high enough price, to cover these expenses, you are good. If these

expenses causes you to bring money to sell your house, that is not a good thing.

Chapter 18Selling to an investor

This technique, when used with a reputable and honest real estate investor or real estate

investment company, can be one of the most beneficial ways to get out from the stresses

that your house is causing you, and put you strongly on the road towards improving your

life. Unfortunately though, there are several businesses and so called investors that prey

on homeowners facing foreclosure, and scam them out of the little money they have,

offering hopes and unbelievable offers to these homeowners. Because of these scam

artists, many honest and fair businesses truly looking for creating a solution for

homeowners facing foreclosure are passed by, because the homeowner doesn’t want to

get “scammed.”

In this chapter, I will be using the word investor to mean either a person who is a real

estate investor, or a business, whose business is to invest in real estate, to make the

chapter easier to read.

I will show you some of the benefits of involving an investor with the sale of your house,

and how you can take steps in ensuring that the investor that you are looking to sell to, is

a reputable and is not a scam artist.

First, let’s look at some of the benefits you receive, when you work with an investor:

1. The house does not need to be in “perfect.”

2. The house doesn’t need to be clean and uncluttered.

3. Repairs on the house do not need to be done.

4. The house can have out-dated wallpaper, carpet and cabinets.

Looking at the questions that more house buyers think of discussed in Chapter 14, of this

book, most if not all of these questions are not an issue with the investor. What the

investor is primarily concerned about is the potential to make a profit with the house.

The investor is willing to make the required repairs that the house needs, make the house

look clean and appealing to house buyers, make updates with the wallpaper, paint,

cabinets and carpeting. They are willing to do all this, if they can see that there is a way

that they can get more money than they spent buying your house and doing what was

necessary to make the house ready for sale. They have the money and resources that you

probably do not. They are willing to take a chance on improving your house, where you

can not.

Even if you know that you owe more than what the house is worth, investors have

techniques to where they may be able to negotiate with the lender to take less that what

you owe and sell it to then for that discounted price. This technique is called “short

selling” and since this is a very complex technique, and out of the scope of this book, this

technique will not be discussed in this book. If you are interested in learning more about

short sales, please visit us at www.TheREITraningWarehouse.com or contact us at

Inquiries@TheREITrainingWarehouse.com, and email one of our representatives

regarding this course material. We will be more than happy to let you know what

offerings we have to satisfy your needs. In any case, don’t feel that you owe too much to

get an investor involved, because if you work with an experienced investor, who

understands how to work with lenders, how much you owe is irrelevant, and they will

most likely be able to help you.

Also, when working with an investor, you don’t need to market your house, and the

investor sometimes is able to close on your house in as little as one hour. How about that

for a fast sale?

The investor might offer you some creative types of financing, where they might not

actually purchase your house with cash, but might say that they will take over your house

payments. This is a pretty common practice, and as long as you researched (I will show

you what you should look for later in this chapter) the investor, to make sure that they

were honest and not a scam artist, you should listen. Besides, if you are currently in

foreclosure, and haven’t been making your monthly house payments anyway, does it

really matter of the investor doesn’t make them? You are not any worse off. And if you

are not in foreclosure, then why would you think that the investor would risk all the

money they put into the house, making all the necessary repairs, and making the house

look nice, just to not make the monthly house payments, and lose all the money that they

invested in your house to your lender, when it falls into foreclosure?

Of course, any good investor will say what they will do, and do what they say, you

should trust in the investor, if you had done all your homework, to make sure that they

are reputable and not a scam artist. Just remember, when dealing with investors, keep

your mind open, and see if you can create a deal, that is good for you and good for the

investor.

There are other techniques that many investors use, and far too many to cover in this

chapter or even this book, so I will refrain from discussing any more techniques, so that I

can help show you ways to look make sure that the investor is not a scam artist.

Here are several ways to research an investor to weed out if they are a scam artist or not:

1. Check with the BBB (Better Business Bureau)

2. Check with the Chamber of Commerce or the Department of Financial

Institutions

3. Check the Circuit Court System

4. Ask for references

5. Ask for testimonials and/or prior client’s situations

The first two points are if the investor is a business. Individual investors are not reported

to these two organizations, and therefore if the investor is a person, you will not find any

reference to them in either of these organizations.

The first point, looking the investor up in the BBB: Did you know that even if the

investor is not a member of the BBB, people can file a complaint with the BBB, for

others to view? It is true, so if the investor is a business, check out the investor to see if

there were any complaints filed.

Additionally, if the investor is a member of the BBB, it tells you that the investor has

been around for at least two years, since that is a requirement of being a member of the

BBB. Becoming a member of the BBB gives some assurance that the investor is not a

“here today, gone tomorrow” type business, and that they have been doing business for at

least two years, if not more. You will find the year that the investor became a member of

the BBB, and as always, the longer the better. Synergy Properties, has been around since

2004, and has been a member of the BBB since 2006. We feel that it is important to

provide our clients with as much assurance as we possibly can provide, and that is why

we are members. And not to brag, but to inform, we have never had any complaints

about they way we do our business yet. If you are interested in using our services, please

feel free to contact us at Inquiries@REITrainingWarehouse.com, and we will be more

than happy to work with you in solving your needs.

Second point, is to check with the state’s chamber of commerce or department of

financial institutions, whichever the investor’s business is required to file their business

with, to check out how long the investor has been doing business, and if they are current

with the state’s filing organization. You could go a step further with this and contact the

registered agent that is filed with the corporate filing, to ensure that you are dealing with

a representative of the company. Some scam artists might pretend that they are

employees or representatives of a legitimate company, so that if homeowners check the

business records, everything looks good. Then they victimize the homeowner. So

contacting the registered agent of the business reduces the chances of this kind of scam.

Go ahead and view our sister company’s record. Here is the link:

https://www.wdfi.org/apps/CorpSearch/Details.aspx?

entityID=S068178&hash=1069643203&searchFunctionID=54acb1ed-751e-4199-

8fedb02185b1259b&type=Simple&q= Synergy+Properties+LLC

Next place to look is the court records of the county in which the investor lives. Most of

the counties in the United States have their court records on the Internet, and available for

public viewing. Some counties are not quite up to having this available, but in either

case, you need to know that court records are public record, and even if you need to go to

the courthouse to look up the court records up, it would be time well spent. You want to

check out if there were any legal actions filed against the investor, and if the investor is a

business, if any legal actions were filed against either the representative that you are

dealing with or the owner of the business. Again, the time spent could save you

thousands and stress. You want to see if anyone has been cited with a fraud case, or have

broken any types of laws that might show that they are not good people to work with. If

the investor has traffic violations or other types of violations that really do not show that

the investor is a scam artist, you can disregard those records. Just be looking for

something that would raise a “red flag” as to the investor acting against your best

interests. You might want to perform a nationwide search against the investor, if the

investor has not been living in the area for a long time. Remember, the more you check

the better off you will be. Again, my company Synergy Properties, has nothing to hide,

and has no record of legal actions. Wisconsin has their circuit court access program at:

http://wcca.wicourts.gov/index.xsl, go ahead al look up Synergy Properties, LLC, or my

name Michael E. Suess, to see that there is nothing to hide.

Now after you have checked out the investor’s legal filings, to see if they are scam artists,

it is time to check out their experience with being successful in their business. So ask for

references of work they have done for clients, ask for types of education or other proof

that the investor keeps current on real estate training, so that they are offering you the

highest quality of service that they possibly can. Nothing wrong with an investor that is

just starting out, we all need to start somewhere, right? But do you want someone that is

just starting out their investing career, who is bound to make mistakes, as they learn, or

would you rather have an investor that has been doing this for a while, and have learned

all the techniques that are required to be successful in working on your needs? For me,

I’d choose the experienced investor, and as I mentioned above, we have been doing this

business for four years, and have many satisfied clients.

Lastly, you should ask for testimonials. These are other clients that the investor worked

with, and they tell how their experience was working with the investor. If the investor

doesn’t have testimonials, doesn’t that concern you? Was it because they never helped a

client, or was it because they never asked their clients to write one? If I were you, I could

not give the investor the benefit of the doubt, and I would have to believe that it was

because they lack experience. It is better to error on the conservative side, than hope that

the investor is experienced, if they were working with me. If you work with an investor,

and they ask for a testimonial from you, describing your experiences with the investor, do

them the favor and give them one. They are working towards helping you out of your

situation; I think it only fair that you help them out when proving their worth to other

possible clients.

As you probably have guessed, Synergy Properties, LLC does have several testimonials

of previous clients and are more than happy to show them to you, if you were interested

in using their services. Again, our email is Inquiries@REITrainingWarehouse.com.

In this chapter, I described some of the benefits of working with an investor, as well as

how you can weed out a real investor that is in the business to help you as well as help

themselves from the many scam artists out there. If after discussing your situation with

an investor, the investor prefers not to buy your house, and other investors decide not to

purchase your house, you might want to help save your credit by giving back the house to

your lender. The next chapter describes this technique.

Chapter 19Deed-in-lieu of foreclosure

Sometimes your back is against the wall; you are either in a hardship that you can not get

out of, or you have looked at every option in attempting to raise enough money so that

you could attempt to save your house or simply you have tried to negotiate with the

lender, and you are getting nowhere. You have looked into trying to sell your house, but

either the house is such a state of disrepair, or something else is stopping you from selling

the house, even real estate investors are not interested in buying your house. You have

contacted businesses that help negotiate with your lender, but either they have had lo luck

with creating a deal for you, or you just don’t have the money to pay for their services.

You want to find a way that you can save some of your credit, so what options are left?

Well, I truly hope that you are not in this situation, because this is a very poor situation to

be in, but unfortunately some people do experience this, and a sense of despair

overcomes them, which many just give up and let it go to the sheriff’s/trustee sale. That

is an option, which I discuss in the next chapter, the last chapter of this book that

discusses techniques, which describes the last option that you (the homeowner) has in

regards to your house, but we can’t give up hope yet. As I mentioned before, your credit

history is very important to protect, since nowadays everyone checks credit, including

landlords, and what you don’t want to experience, is the fact that you lose your house to

foreclosure, and you are unable to find a place to live, because the landlord thinks that

you are too much of a credit risk, therefore they don’t rent to you.

This technique is called “deed-in-lieu of foreclosure,” which means that you are going to

sign over the house (the deed) to the lender, before it goes to the sheriff’s/trustee sale.

This technique allows the lender to stop processing the foreclosure, which saves the

lender some money, because instead of having the lender complete the foreclosure

process, which allows them to forcibly take over the house, you are voluntarily giving the

lender the house. This technique is just like if you were a tenant, and you were being

sued for an eviction. If you leave voluntarily, the landlord doesn’t need to get the writ of

restitution, which allows the landlord to seize the property, and forcible kick you out.

This saves the landlord time and money, and sometimes this causes the landlord to be a

little more “nice” to you and maybe won’t sue you for as many “damages” that they can

legally come up with. Same thing with you and the lender, in a foreclosure; you leave

before they need to pay for the extra foreclosure processing, they might not “ding” your

credit history as badly. You still will have a foreclosure on your credit history, but it will

not show that they had to finish the foreclosure process, but the house was given back.

Don’t get me wrong, a foreclosure is very bad, but this technique does soften the blow a

little bit.

In order to give back the house to the lender, using the “deed-in-lieu” technique, all you

need to do is contact your lender, (the loss mitigation department,) and tell them that you

want to give back the house “deed-in-lieu.” And they will tell you what steps that you

will need to do to complete this. Mostly it involves the lender mailing/faxing you a

document, which you sign in front of a notary public (state approved and registered

witness,) and mail/fax the document back to the lender. You will need to abandon the

house, which means move out. The lender will then secure the property, by changing the

locks and winterizing the house, (if the house is in an area where the water lines could

freeze.)

Deed-in-lieu of foreclosure is a technique that allows the lender to take back the house,

without completing the foreclosure process. This in turn reduces the impact that a full

foreclosure can do to your credit report. Remember though, you will need to abandon

your house, sometimes before you send the deed over to your lender. So be sure that you

intend to vacant swiftly.

Chapter 20Letting it go

Here is the last chapter of this book, which contains options/techniques for you (the

homeowner) when dealing with your foreclosure situation. Again, I truly hope that you

are not reading this chapter, because you have to, since you found no other way to either

save your home, sell it or give it back to the lender.

When it goes to sheriff’s sale (mortgage states,) or trustee’s sale (deed-in-trust states,)

you house is sold to the highest bidder, usually the lender, and you’re forcibly removed

from the house. You credit report has a completed full foreclosure on it, which will

remain on your credit report for seven years.

There is really not much to say about this option, as it is really out of your hands at this

point; the lender and it’s representatives are in control of liquidating your collateral (your

house) to attempt to recover the money that the lender gave you, when you purchased the

house. And since this book is not covering the details of a sheriff’s/trustee sale, there is

not much more I can write about the inner workings of this process. If you are interested

in learning more about the sheriff’s/trustee sale process, negotiation techniques or any

other topic regarding real estate, feel free to contact The REI Training Warehouse at:

www.REITrainingWarehouse.com or Inquiries@REITrainingWarehouse.com for

further information.

The lender may or may not be able to file a deficiency judgment against you, which

means that they are able to collect the difference between what you owe the lender and

what the lender was able to sell your house for, after the Sheriff Sale. Even if the lender

has the right to sue you for a deficiency judgment, the lender might not pursue getting

one from you, since they might feel that having a “piece of paper” (the judgment) stating

that you owe them the difference is not worth the money it would take to get the

judgment, since you (the homeowner) is insolvent (don’t have any money.) The lender

usually feels that throwing good money after bad is not good policy. But that is not to

say that lenders never act on their right to get a deficiency judgment, it is at the sole

discretion of the lender.

I want to thank you for your investment in this book, and I truly wish you the best in

saving your home!

Section VExamples

The following chapters were developed to provide you, the reader with examples of how

changing the terms of the note changes the monthly house payments, and case studies of

the different techniques, that are discussed in this book, in order for you to get a better

understanding of the techniques. Please remember that these are just examples, and you

will need to perform the analysis and calculations, which are relevant to your personal

situation.

Notes

Chapter 21Modification of note terms

All the following examples will start with the following situation:

A homeowner bought a house for $100,000.00. The homeowner put 20% down

($20,000.00) and received a loan from Dewey Cheatham Lenders for $80,000.00

(principal) to buy their house. The note terms include a 2-year ARM, with a

starting interest rate of 6.75%, which adjusts 3% every year after the first two

years. Also there is a 5-year balloon and the note is amortized over 30 years. The

payments for this note are just for principal and interest (no escrow [for property

taxes or property insurance] is held.)

Example #1:

The monthly payments for the five years, before the balloon “bursts” are:

Year 1: $518.88 (Interest Rate: 6.75%)

Year 2: $518.88 (Interest Rate: 6.75%)

Year 3: $679.85 (Interest Rate: 9.75%)

Year 4: $851.65 (Interest Rate: 12.75%)

Year 5: $1,030.77 (Interest Rate: 15.75%)

Balloon payment: $76,963.99 due to the lender when the balloon “bursts.”

Example #2:

In this example the note will be amortized over 40 years, instead of 30. The monthly

payments for the five years, before the balloon “bursts” are:

Year 1: $482.69 (Interest Rate: 6.75%)

Year 2: $482.69 (Interest Rate: 6.75%)

Year 3: $659.36 (Interest Rate: 9.75%)

Year 4: $846.26 (Interest Rate: 12.75%)

Year 5: $1,037.69 (Interest Rate: 15.75%)

Balloon payment: $78,778.95 due to the lender when the balloon “bursts.”

Example #3:

In this example, the interest rate is fixed at the initial rate of 6.75%. The monthly

payments for the five years, before the balloon “bursts” are:

Year 1: $518.88 (Interest Rate: 6.75%)

Year 2: $518.88 (Interest Rate: 6.75%)

Year 3: $518.88 (Interest Rate: 6.75%)

Year 4: $518.88 (Interest Rate: 6.75%)

Year 5: $518.88 (Interest Rate: 6.75%)

Balloon payment: $75,004.13 due to the lender when the balloon “bursts.”

Example #4:

In this example, we are changing the payments from principal and interest to interest only

payments. The monthly payments for the five years, before the balloon “bursts” are:

Year 1: $450.00 (Interest Rate: 6.75%)

Year 2: $450.00 (Interest Rate: 6.75%)

Year 3 $650.00 (Interest Rate: 9.75%)

Year 4 $850.00 (Interest Rate: 12.75%)

Year 5 $1,050.00 (Interest Rate: 15.75%)

Balloon payment: $80,000.00 due to the lender when the balloon “bursts.”

Example #5:

In this example, we are changing the payments from principal and interest to a negatively

amortized interest only payment, where the interest rate for the loan is 8.5%, amortized

over 30 years, but the payment is based on 5.75%, amortized for 30 years. The monthly

payments for the five years, before the balloon “bursts” are:

Year 1: $383.34 (Interest Rate: 5.75%)

Year 2: $383.34 (Interest Rate: 5.75%)

Year 3: $383.34 (Interest Rate: 5.75%)

Year 4: $383.34 (Interest Rate: 5.75%)

Year 5: $383.34 (Interest Rate: 5.75%)

Balloon payment: $93,927.28 due to the lender when the balloon “bursts.”

Please take notice that you will owe $13,927.28 more (after five years of payments)

than what you borrowed initially using this technique.

Notes

Chapter 22Multiple Real Estate Holdings Case study

All the following examples will start with the following situation:

Let say that you own three pieces of real estate: your home and two duplexes that

you use as rental properties. Let’s assume the following situation:

Home

Appraised Value: $150,000

Amount Owed: $135,000

Equity: $15,000.00

Interest: 8.5%

Terms: 30 year fixed

House Payment: $1,038.03

LTV: 90%

Rentals

Duplex #1

Appraised Value: $225,000

Amount Owed: $150,000

Equity: $75,000.00

Interest: 7.75%

Terms: 30 year fixed

House Payment: $1,074.62

LTV: 67%

Monthly Costs*: $300.00

Rents: $1,400.00/month

Monthly Cash Flow: +$25.38

Duplex #2

Appraised Value: $185,000

Amount Owed: $150,000

Equity: $35,000.00

Interest: 7.85%

Terms: 30 year fixed

House Payment: $976.16

LTV: 81%

Monthly Costs*: $312.00

Rents: $1,300.00/month

Monthly Cash Flow: +$21.84

*Monthly costs include property taxes, property insurance, utilities not paid by the

tenants, maintenance and other related costs in running a rental property.

Using the above situation, let’s assume that you have lost your job, and have not made

your house payment for six months, but you have tenants in your rental properties, which

are making the payments on the duplexes, so they are not in threat of being foreclosed on.

That would mean:

Amount you owe in arrears: $1,038.03 * 6 (months) = $6,228.18.

Let’s assume that all the rest of the lender fees added up to $3,500.00 to make things

easy. Now let’s say that you found a new job, and you can now start making the monthly

house payments on your home again.

That would mean that you would need $6,228.18 (arrears) + $3,500.00 or $9,728.18 to

reinstate the note.

Option #1:

Could you refinance your rentals (duplexes) to give you enough money to save your

home?

Looking at duplex #1, it has an LTV (loan to value) of 67%, and has $75,000 in equity,

which means that it would be a good candidate to refinance and get some of the equity

from. Looking at duplex #2, it has an LTV of 81%, and has $35,000 in equity, and since

most lenders will lend 80% LTV on rental properties, this duplex would not be a good

candidate to refinance.

Analysis #1:

The maximum amount of equity that can be taken out of duplex #1 is 80% of what the

duplex is appraised for is $30,000.00, which is computed with the following formula:

Equity Available = (Appraisal Value * 0.8) – Amount Owed

Equity Available = ($225,000.00 * 0.8) - $150,000.00

= ($180,000.00) - $150,000.00

= $30,000.00

So, we have discovered that there is enough equity in duplex #1, to provide you with the

needed cash to save your home ($9,729.18,) and could also give you an extra $20,270.82

(minus closing costs) to help you get back on your feet, and pay any other bills that your

hardship might have caused you.

Analysis #2:

Now that we know that one of our duplexes has enough equity to save our home, we need

to review if we can afford the refinance or if we are better off leaving the equity in the

duplex, and trying another home saving technique. You should have access to a finance

calculator for this portion of the analysis. There are several free “mortgage calculators”

online, if you do not have a financial calculator available. If you do not have access to

the Internet, then look for a friend or financial help organization that can help you,

because the formula that you would need to figure the monthly house payments is very

complex, and if not done properly it could produce very different results that what you

expect.

Example #1:

Interest rate: 7.75%

Terms: 30 year fixed

Amount refinanced: $180,000.00 (the maximum)

Your monthly payments would change from $1,074.62 to $1,289.54, which would cause

your monthly cash flow on this duplex to change from +$25.38, which means that every

month you were making $25.38, to -$189.54, which means that every month you are

losing $189.54.

Does that mean that you shouldn’t refinance the duplex, to save you house? It depends

on a couple things:

1. Could you raise the rents, so that you could cover the new monthly house

payment? If you have not raised the rents for a while, and duplexes around

yours are renting for more than what your duplex is getting, this might be an

option for you. If you could increase your monthly rental income for this duplex

to $1,600.00, instead of the $1,400.00 that it currently is bringing in, that would

solve the negative cash flow problem.

2. Are you making enough money with your new job, that you can make your

monthly house payments, pay all your monthly bills and pay an extra $189.54 to

your monthly house payment for your duplex #1? Having a piece of real estate

that takes money from you is never really a good thing, but if you see that the

duplex value is going to go up within the next few months or a year, maybe

paying a little money to keep it might be worth the thousands that you expect the

house will be appreciate. If this is your situation, be very cautious, as this is a

very dangerous thing to do, and should only be done by people that have a full

understanding of how dangerous this situation really is.

Example #2:

Interest rate: 6.75%

Terms: 30 year fixed

Amount refinanced: $180,000.00 (the maximum)

Your monthly payments would change from $1,074.62 to $1,167.48, which would cause

your monthly cash flow on this duplex to change from +$25.38, which means that every

month you were making $25.38, to -$67.48, which means that every month you are

losing $67.48.

Should you refinance? Again, look at the previous example to see if this would be right

for you.

Example #3:

Interest rate: 7.75%

Terms: 30 year fixed

Amount refinanced: $162,000.00 ($150,000 [what you owe] +

$9,728.18 [the money needed to save your house + closing costs)

Your monthly payments would change from $1,074.62 to $1,160.59, which would cause

your monthly cash flow on this duplex to change from +$25.38, which means that every

month you were making $25.38, to -$60.59, which means that every month you are

losing $60.59.

Should you refinance? Again, look at the previous example to see if this would be right

for you.

Example #4:

Interest rate: 6.75%

Terms: 30 year fixed

Amount refinanced: $162,000.00 ($150,000 [what you owe] +

$9,728.18 [the money needed to save your house + closing costs)

Your monthly payments would change from $1,074.62 to $1,050.73, which would cause

your monthly cash flow on this duplex to change from +$25.38, which means that every

month you were making $25.38, to +$49.27, which means that every month you are

making $49.27, or an additional $23,89 per month. That is even a better deal, because

you were able to keep $18,000.00 of equity in your duplex, you were able to save your

home and you didn’t need to raise rents or lose money holding the rental property!

Option #2:

Could you sell one or both of your rentals, in order to produce enough money in order to

save your house?

Looking at both duplexes, both have enough equity that selling either one of the duplexes

would provide you with enough money to save your house. If this is an option that you

are considering, please review the chapter regarding selling you house for the various

ways that you might be able to sell one or both of your duplexes.

Option #3:

Sell to a RE investor, possibly for what is owed plus the needed capital to save your

home, in order to get a fast sale.

Notes

Chapter 23Cost of Selling Worksheet

Here is a worksheet that helps show what it will cost you to sell your house, using

conventional methods (FSBO or a Realtor®.) If you are going to use creative financing,

you can include an experienced real estate investor, (like our sister company Synergy

Properties, LLC) who understands how to put together creative deals, where a “win-win”

agreement is created, many if not all of these costs can be avoided, and thus save you

thousands of dollars.

As you can see there are several different costs that you need to consider, when you sell

your house, using conventional methods. There are two worksheets, one that is very

detailed, and will give you a more accurate amount that you should expect to profit or

need to bring to the closing table, when selling your house. You will find instructions as

well for this form in this chapter, to help you fill it out, and explain how to calculate the

figures. Also included in this chapter is a simplified version of figuring out what your

house will make you, or have you bring to the closing table, in order to sell it, but since it

doesn’t account for a lot of the things the detailed worksheet covers, the final numbers

could look better that what you will actually experience. You can use this worksheet if

you’d like, just to see what it would take, and if you could even sell your house for a

profit, if you have not found any way to save it.

Please note, that these worksheets are just provided to give you a rough idea of what it

will cost you to sell your house, this worksheet can not, nor ever makes the claim that it

covers all the expenses that occur during a closing within your community, as every

community and homeowner situation is very unique, and it is virtually impossible to

account for these variances. These worksheets are just a tool, to give you an example of

what you should expect, and if you wish to have an accurate accounting of what selling

your house will truly cost you, you will need to seek the guidance of a professional that

performs closings within your community, (an attorney or title company for example.)

Mortgages1st Mortgage

1 Amount Due:

2 Monthly Payment:

3 Number of months behind:

4 Total in arrears (Multiply line 2 by line 3):

5 Monthly Late Fees: (Multiply line 2 by 0.025)

6 Total Late Fees: (Multiply line 5 by line 3)

7 Approximate 1st Mortgage Balance Outstanding: (Add lines 1, 4 and line 6)

2nd Mortgage8 Amount Due:

9 Monthly Payment:

10 Number of months behind:

11 Total in arrears (Multiply line 9 by line 10):

12 Monthly Late Fees: (Multiply line 9 by 0.025)

13 Total Late Fees: (Multiply line 12 by line 10)14 Approximate 2nd Mortgage Balance Outstanding: (Add lines 8, 11 and

line 13)

3rd Mortgage15 Amount Due:

16 Monthly Payment:

17 Number of months behind:

18 Total in arrears (Multiply line 16 by line 17):

19 Monthly Late Fees: (Multiply line 16 by 0.025)

20 Total Late Fees: (Multiply line 19 by line 17)

21 Approximate 3rd Mortgage Balance Outstanding: (Add lines 15, 18 and line 20)

22 Total Balances Outstanding (Add lines 7, 14 and 21):

Basic Foreclosure Costs23 Pre-payment Penalty:

24 Foreclosure Fees ($2,500.00 if in foreclosure, $0.00 otherwise):

25 Delinquent Property Taxes

26 Minimum required to cover mortgages (Add lines 22, 23, 24 and 25):

Holding Expenses27 Annual Property Taxes:

28 Monthly Property Tax Expense (Divide line 27 by 12):

29 Monthly Mortgage Payments (Add lines 2, 9 and 16):

30 Total Monthly Holding Expenses (Add lines 28 and 29):

Cost of Selling31 Asking Price:

32 Realtor’s Commissions (Multiply line 31 by 0.06):

33 Number of Months from the First of the Year:

34 Prorated Property Taxes (Multiply line 28 by line 33):

35 Closing Costs (Multiply line 31 by 0.01, if less than $1,500, put in $1,500):

36 Repairs needed:

37 Marketing costs (signs, flyers, newspaper ads, etc.):

Profit or Loss from Sale38 Total Expenses of Sale (Add lines 26, 30, 32, 34, 35, 36 and 37):

39 Amount received at closing (Subtract line 38 from line 31):

(A negative number, on line 28, means you need to bring that cash to the closing, just to sell your house.)

Instructions on filling out the “Cost of Selling Worksheet”

Line 1: Write the total amount you owe on the first mortgage. This number can usually be found on your monthly statement from the lender.

If it is not, you can either put in the original loan amount or you could call your lender and ask for the mortgage balance.

Line 2: Write the amount you pay monthly to the lender, as a mortgage payment for your first mortgage. Even if the payment includes

insurance and property taxes, since this number is how much it costs you every month.

Line 3: If you have fallen behind on your first mortgage payment, how many months have you failed to pay? When you don’t pay, it is called

having payments in arrears. You will need to make up these payments, when you sell your house.

Line 4: Here is where you figure out how much money you need to pay back to the first mortgage holder (lender,) if you missed some

payments. If you are current (never missed a payment) then you can put a zero in this line, otherwise multiply line 2 by line 3 and put the

answer on this line.

Number on line 2X Number on line 3

Number to put on line 4

Line 5: Here is where you figure out approximately what the monthly late fee is for not paying on time. Generally the late fee is 2.5% of the

monthly payment. If you know what your late fee is, then substitute your late fee percentage in place of 0.025. To figure convert the

percentage to a decimal, us the following formula. If you are current (never missed a payment) then you can put a zero in this line, otherwise

multiply line 2 by line 0.025 (for 2.5% late penalty) and put the answer on this line.

Number to put in formula below

100 Your known late fee percentage

Number on line 2

X

Late Fee decimal. (Put 0.025, if 2.5% of monthly payment)

Number to put on line 5

Line 6: Here is where you figure out how much you owe your lender in late fees for non-payment. If you are current (never missed a

payment) then you can put a zero in this line, otherwise multiply line 5 by line 3 and put the answer on this line.

Number on line 5X Number on line 3

Number to put on line 6

Line 7: Now add the numbers on lines 1, 4 and 6 together. This number is the total amount of money your lender is owed for the 1st mortgage

Number on line 1 Number on line 6

+ Number on line 6

Number to put on line 7

Line 8: Write the total amount you owe on the second mortgage. This number can usually be found on your monthly statement from the

lender. If it is not, you can either put in the original loan amount or you could call your lender and ask for the mortgage balance. If you don’t

have a second mortgage, then put zeros in line 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 and go to line 22.

Line 9: Write the amount you pay monthly to the lender, as a mortgage payment for your second mortgage.

Line 10: If you have fallen behind on your second mortgage payment, how many months have you failed to pay? When you don’t pay, it is

called having payments in arrears. You will need to make up these payments, when you sell your house.

Line 11: Here is where you figure out how much money you need to pay back to the second mortgage holder (lender,) if you missed some

payments. If you are current (never missed a payment) then you can put a zero in this line, otherwise multiply line 9 by line 10 and put the

answer on this line.

Number on line 9X Number on line 10

Number to put on line 11

Line 12: Here is where you figure out approximately what the monthly late fee is for not paying on time. Generally the late fee is 2.5% of the

monthly payment. If you know what your late fee is, then substitute your late fee percentage in place of 0.025. To figure convert the

percentage to a decimal, us the following formula. If you are current (never missed a payment) then you can put a zero in this line, otherwise

multiply line 9 by line 0.025 (for 2.5% late penalty) and put the answer on this line.

Number to put in formula below

100 Your known late fee percentage

Number on line 9

X

Late Fee decimal. (Put 0.025, if 2.5% of monthly payment)

Number to put on line 12

Line 13: Here is where you figure out how much you owe your lender in late fees for non-payment. If you are current (never missed a

payment) then you can put a zero in this line, otherwise multiply line 12 by line 10 and put the answer on this line.

Number on line 12X Number on line 10

Number to put on line 13

Line 14: Now add the numbers on lines 8, 11 and 13 together. This number is the total amount of money your lender is owed for the 2 nd

mortgage

Number on line 8 Number on line 11

+ Number on line 13

Number to put on line 14

Line 15: Write the total amount you owe on the third mortgage. This number can usually be found on your monthly statement from the

lender. If it is not, you can either put in the original loan amount or you could call your lender and ask for the mortgage balance. If you don’t

have a third mortgage, then put zeros in line 15, 16, 17, 18, 19, 20 and 21 and go to line 22.

Line 16: Write the amount you pay monthly to the lender, as a mortgage payment for your third mortgage.

Line 17: If you have fallen behind on your third mortgage payment, how many months have you failed to pay? When you don’t pay, it is

called having payments in arrears. You will need to make up these payments, when you sell your house.

Line 18: Here is where you figure out how much money you need to pay back to the third mortgage holder (lender,) if you missed some

payments. If you are current (never missed a payment) then you can put a zero in this line, otherwise multiply line 16 by line 17 and put the

answer on this line.

Number on line 16X Number on line 17

Number to put on line 18

Line 19: Here is where you figure out approximately what the monthly late fee is for not paying on time. Generally the late fee is 2.5% of the

monthly payment. If you know what your late fee is, then substitute your late fee percentage in place of 0.025. To figure convert the

percentage to a decimal, us the following formula. If you are current (never missed a payment) then you can put a zero in this line, otherwise

multiply line 16 by line 0.025 (for 2.5% late penalty) and put the answer on this line.

Number to put in formula below

100 Your known late fee percentage

Number on line 16

X

Late Fee decimal. (Put 0.025, if 2.5% of monthly payment)

Number to put on line 19

Line 20: Here is where you figure out how much you owe your lender in late fees for non-payment. If you are current (never missed a

payment) then you can put a zero in this line, otherwise multiply line 19 by line 17 and put the answer on this line.

Number on line 19X Number on line 17

Number to put on line 20

Line 21: Now add the numbers on lines 15, 18 and 20 together. This number is the total amount of money your lender is owed for the 3 rd

mortgage

Number on line 15 Number on line 18

+ Number on line 20

Number to put on line 21

Line 22: Now add the numbers on lines 7, 14 and 21 together. This number is the total amount of mortgages owed on your house.

Number on line 7 Number on line 14

+ Number on line 21

Number to put on line 22

Line 23: If it will cost you to pay off your mortgage early, then put the amount of money it will cost you on this line. Some mortgages allow

homeowners to pay the loans off early, others charge prepayment penalty.

Line 24: If you had been notified that you are in foreclosure, by receiving a Notice of Default (NOD) or court papers, then you have additional

filing fees, attorney fees, late charges, service fees and other court related fees. Write $2,500.00 on this line, if you are in foreclosure,

otherwise you can write a zero.

Line 25: Are you delinquent on paying your property taxes, or owe the city government money, for any citations or other fees? Put the money

you owe the city for any taxes, fees or citation (tickets).

Line 26: Now add lines 22, 23, 24 and 25 together. This is the total amount of money you need to pay off all your lenders, all arrears and

other fees.

Number on line 22 Number on line 23 Number on line 24

+ Number on line 25

Number to put on line 26

Line 27: If you have your property taxes escrowed in your first mortgage payments, you can put a zero on lines 27 and 28. Otherwise put in

the amount you pay per year, for property taxes on line 27.

Line 28: We need to figure out how much it costs you per month in property taxes. If you sell your house (on your own, or through a Realtor,)

you will need to pay a percentage of the property taxes, so we need to figure what you’ll owe. Divide line 27 by 12.

Number to put on line 28

12 Number on line 27

Line 29: Now put in the amount it costs you in mortgage payments every month. Remember, even if you are not currently paying your

mortgage payments, the mortgage companies keep track, and will increase the amount you owe them, by the missed payments. To figure this,

add lines 2, 9 and 16 together.

Number on line 2 Number on line 9

+ Number on line 16

Number to put on line 29

Line 30: Now we need to figure out how much it costs you every month to keep your house. So add lines 28 and 29 together and put on line

30.

Number on line 28+ Number on line 29

Number to put on line 30

Line 31: Write in the amount of money you think you can sell your house for. This is the asking price of your house. Sometimes when selling

a house, you can get the asking price, but generally, people pay less for the house, than what the homeowner asks for. If you price the house

too high, you will never sell the house. Make sure that you get enough to cover your debt. Some homeowners find out that they owe too

much, and therefore are unable to sell the house. Put in a fair price for you house on this line.

Line 32: If you use a Realtor to sell your house, then they expect to get paid a percentage of the sales price of the house. The cost to be paid is

negotiable, between 5 and 7 percent. In this calculation, we are going to figure 6%, which is generally used. To calculate what to put on this

line, multiply the asking price by 0.06 and put on line 32.

Number on line 31X 0.06 6%

Number to put on line 32

Line 33: Write in the number of months that have passed since the first of the year. If your first mortgage payments include the property

taxes, then put in zero otherwise use the chart below:

Escrowed 0January 1February 2March 3April 4May 5June 6July 7August 8September 9October 10November 11December 12

Line 34: We need to figure out how much property taxes have been prorated, while you lived in the house. If you sell your house (on your

own, or through a Realtor,) you will need to pay a percentage of the property taxes, so to figure what you owe, multiply line 28 by line 33.

Number on line 28X Number on line 33

Number to put on line 34

Line 35: When you sell your house, you need to pay closing costs, which include taxes, title insurance and other fees that the closing

department charges for their services. Generally, this figure is near 1% of the sales price. So to figure this line, multiply line 31 by 0.01 (1%).

Number on line 31X 0.01 1%

Number to put on line 35

Note: If the above amount IS LESS THAN $1,500.00 put $1,500.00 in line 35. This is because the title company has a minimum charge

for preparing the closing documents. This minimum charge averages $1,500.00.

Line 36: Also, when you sell your house, you might need to make some repairs, to make your house attractive to your buyers. You know that

you wouldn’t want to buy a house that needed a new roof on it, or new carpet, or needed holes patched. Most Realtors will tell you that these

repairs need to be fixed, before they list the house. This is an added expense to selling your house. So go around the house, and look at what

repairs are needed. Pretend that you were going to buy your house. What things you want fixed, before you bought? Put an estimate of what it

would cost you to fix them on line 36.

Line 37: If you are going to try and sell the house on your own, and not use a Realtor, you will need to estimate how much it would cost you

to do so. If you are using a Realtor, put a zero on this line, otherwise, think of things you would do to let people know that your house is for

sale. Like newspaper ads, fliers, yard signs, etc. Call around to figure out the prices and put the total amount of money you would spend to sell

your house. Be realistic. Remember, your house is not going to sell itself, you will need to advertise. Put the amount you expect to pay to

advertise your house on line 37.

Line 38: This line is the line that shocks most people. What it will really cost them to sell their house. Add all the numbers on lines 26, 30,

32, 34, 35, 36 and 37 and put on line 38. Costs sure add up fast, don’t they! This is roughly how much it is going to cost you to sell your

house. This is not an exact number, but a very good estimation of what you should expect. You could pay a title company or an attorney if

you want a more precise cost, but you will find out that it will be very close to this number.

Number on line 26 Number on line 30 Number on line 32 Number on line 34 Number on line 35 Number on line 36

+ Number on line 37

Number to put on line 38

Line 39: Now let’s see if your house is valued enough to make a profit. Subtract line 38 from line 31, and put the answer on line 39. If the

number is positive, that is what you should get roughly when you sell your house, for the asking price. If you sell it for less, then you will get

less. If the number is negative, then you will need to bring that much money to the closing table, when you sell your house.

Number on line 31- Number on line 38

Number to put on line 39

Your done! Congratulations on your hard work. As you can see, there are a lot of costs when you are selling a house, and many

people forget about them, until it is too late! Don’t let this happen to you, Synergy Properties, LLC has many options for homeowners,

to help minimize costs. Please feel free to contact our offices at SynergyProperties@gmail.com or look us up on the web at:

www.Synergy-Properties.com.

Cost of Selling Worksheet – Simplified Form (EZ)

Here is a worksheet that helps show what it will cost you to sell your house, using conventional methods (FSBO or a Realtor®.) If you are going to use creative financing, you can include an experienced real estate investor, (like our sister company Synergy Properties, LLC) who understands how to put together creative deals, where a “win-win” agreement is created, many if not all of these costs can be avoided, and thus save you thousands of dollars.

As you can see there are several different costs that you need to consider, when you sell your house, using conventional methods. There are two worksheets, one that is very detailed, and will give you a more accurate amount that you should expect to profit or need to bring to the closing table, when selling your house. You will find instructions as well for this form in this chapter, to help you fill it out, and explain how to calculate the figures. Also included in this chapter is a simplified version of figuring out what your house will make you, or have you bring to the closing table, in order to sell it, but since it doesn’t account for a lot of the things the detailed worksheet covers, the final numbers could look better that what you will actually experience. You can use this worksheet if you’d like, just to see what it would take, and if you could even sell your house for a profit, if you have not found any way to save it.

Please note, that these worksheets are just provided to give you a rough idea of what it will cost you to sell your house, this worksheet can not, nor ever makes the claim that it covers all the expenses that occur during a closing within your community, as every community and homeowner situation is very unique, and it is virtually impossible to account for these variances. These worksheets are just a tool, to give you an example of what you should expect, and if you wish to have an accurate accounting of what selling your house will truly cost you, you will need to seek the guidance of a professional that performs closings within your community, (an attorney or title company for example.)

Cost of Selling Worksheet (CoSW-EZ)

Asking Price:

- Mortgages:

= Equity:

# months late:

+ Holding Time (6 mo avg) 6

* Monthly Payments:

= Total Arrears:

Total Arrears:

* Late Penalties (2.5% avg) 0.025

= Total Late Fees

Monthly Utilities:

* Holding Time (6 mo avg) 6

= Total Utility Costs

Asking Price:

* Closing Costs (1.0% avg): 0.01

= Total Closing Costs:

Asking Price:

* Realtor Fees (6.0% avg) 0.06

= Realtor Expense:

Equity:

- Total Arrears:

- Total Late Fees:

- Closing Costs:

- Property Taxes

- Utilities:

- Repairs:

- Realtor Expense:

- Marketing Costs:

= Expected Profit:

Note: The National Average to sell a house is SIX months.Let Synergy Properties, LLC help show you how you can save hundreds, if not thousands of dollars, by contacting us at

Inquiries@Synergy-Properties.com or visiting us on the web at: www.Synergy-Properties.com.

Section VIResources

The following pages provide you with other resources in order to better serve you, when

trying to save your home, or for training on the numerous other aspects of dealing with

real estate. I hope that you find this material beneficial and they improve your chances of

saving your home.

Notes

Chapter 24Budgeting Worksheets

The following pages have been added for your convenience and to help you develop

budgets so you are better equipped when you are working on saving your home. Again,

as the chapter on budgeting identified, there are literally hundreds of ways to develop a

budget, and equally numbered ways to implement a budget. The following worksheets

found in this chapter are just one way that can be used, so feel free to use them or modify

them to better fit your needs. A budget is just a tool, to help you watch where your

money is going, so you can control it better.

The following worksheet is used to figure out what your current net value is, which is

helpful to see where you are financially. Since this worksheet is very general, and

therefore can be used for people that are living from paycheck to paycheck, this form can

also be used for those who have become financially independent. I mention this because

there are several areas that do not pertain to you, just leave those areas blank, if that is the

case.

Also this worksheet can be used to present to both your current lenders, to show them

what your hardship has done to your finances and what assets you have (if any,) as well

as this form can be used when you are trying to refinance, again to show your prospective

lenders what assets and liabilities that you currently have, so that they better understand

your situation.

Again, this is just a tool that can be used to further understand your current financial

“health,” I suggest that even if doing this exercise will be unpleasant, you should see

where you stand, because ignoring it does not make it go away. You might be surprised

to what you find out, and this tool may give you some ideas to help save your home.

INDIVIDUAL FINANCIAL STATEMENT

Name:Address:I am Married Single Legally Separated

Include all assets and all liabilities of both spouses (if married.) COMPLETE ALL BLANKS, WRITE “NO” OR “NONE” WHERE NECESSARY

ASSETS LIABILITIESCash, Checking & Savings: Notes Payable – Secured:Government and Listed Securities: Notes Payable – Unsecured:Unlisted Securities: Notes Payable – Other:Notes/Loan Receivables: Life Insurance Loans:Homestead/Real Estate Owned: Due to Brokers:Automobiles: Accounts Payable:Other Personal Property: Unpaid Income Taxes:Cash Value of Life Insurances: Real Estate Mortgages:Securities in Margin Accounts: Real Estate Taxes:Equity in Partnerships: Credit Cards:Equity in Proprietorships: Other Debts:Vested Pensions/Profit-Sharing:Other Assets:

TOTAL LIABILITIES:TOTAL ASSETS: NET WORTH: (ASSETS – LIABILITIES)

SOURCES OF INCOME FOR YEAR CONTINGENT LIABILITIES

Salaries & Bonuses: As Endorser, Co-Maker or Guarantor:On Lease or Contracts:

Commissions: Legal Claims:Dividends & Interest: Other:Real Estate:Other:

TOTAL INCOME: TOTAL CONTINGENCIES:

INDIVIDUAL FINANCIAL STATEMENT SCHEDULES(Page 1 of 5)

CASH, CHECKING & SAVINGS ACCOUNTS

Type Financial Institution Amount In Name Of:Pledged

Yes No

INDIVIDUAL FINANCIAL STATEMENT SCHEDULES(Page 2 of 5)

U.S. GOV’T. LISTED & UNLISTED SECURITIES# Shares/

Face ValueDescription Owner Market Value

PledgedYes No

LIFE INSURANCE Face

AmountName of Company Owner Beneficiary

Cash SurrenderValue Loan

INDIVIDUAL FINANCIAL STATEMENT SCHEDULES(Page 3 of 5)

REAL ESTATE OWNED

Address Owner CostMkt

ValueMORTGAGE

InsuranceAmount Monthly Maturity

INDIVIDUAL FINANCIAL STATEMENT SCHEDULES(Page 4 of 5)

LENDERS/CREDIT CARDS

Name of Lender Balance % Interest Monthly MaturityHigh Limit

Maturity Date

SecuredYes No

INDIVIDUAL FINANCIAL STATEMENT SCHEDULES(Page 5 of 5)

NOTES & LOANS RECEIVABLEUnpaid Amount

Note MakerDate Made

Security Pledged

Notes

The following worksheet is used to help track of your spending on a daily basis. This is a

variation of what I described in the chapter discussing budgeting, but either technique can

be used. The only issue with using the following worksheet over the technique that I

describe in the budgeting chapter is that if you have multiple expenditures for a specific

category for the day, you will need to add all of the expenses for that day and write it

down in the appropriate box. The technique in the budgeting chapter does not require

this, as each expense is on a separate line, and therefore you don’t need to add then

together each time, just once (at the end of the month.)

Again, there are several different ways to attack the budget subject; my advice to you is

use the technique that works best for you. The best technique is the technique that you

will use, having a technique that you will not use is not worth anything to you, so select

which one works for you and use it.

Day Income Taxes Groceries Utilities Insurance Entertainment Transportation Clothing Housing EducationBudget

123456789

10111213141516171819202122232425262728293031

Day Medical Credit Cards Savings Misc #1 Misc #2 Misc #3 Total Expenses for the DayBudget

12345678910111213141516171819202122232425262728293031

The following worksheet is used to keep track of all your debts, which include your

mortgages, credit cards and any other personal loans that you might have, where you

need to make payments on. This tool allows you to quickly look at what you owe; so that

you can make a plan of how to remove items from this list (pay them off.)

Once suggestion that I often tell my clients is that you should look at paying off some of

the smaller balanced loans, even if the lower loan has a lower interest rate, because when

you see one of these line items fall off, it is exciting, and gives you that “extra boost.” If

you keep making payments, and nothing falls off, sooner or later, you will get

discouraged, and you will fail.

Here is an example: If you have several large credit cards, where you owe $5,000.00

each, and the credit cards have an interest rate of 27%. You also have a store credit card,

like Sears® or Home Depot®, with a balance of $300.00, and that interest rate was 21%.

My suggestion would tell you to pay off the store credit card, even though it has a lower

interest rate, because it would be easier to pay off the $300.00 than it would be to pay off

one of the $5,000.00 credit cards.

List of DebtsName of Lender

Contact Balance % Interest

Monthly Payment

# Payments LeftPhone #

The last worksheet in this chapter is the Monthly Income & Expenses Worksheet, which

breaks up several common items where you are spending your money. Again, this is just

a tool, and is used to review where you are spending your money each month. This

worksheet can be used with the technique that I go through in the budgeting chapter, as

well as in conjunction with the monthly budget tracker technique. Additionally, this

worksheet can be used with several other budgeting techniques that are available. Again,

the best budgeting tools are the ones that you will use.

After filling out this worksheet, you may find areas where you could cut back your

spending habits on, so that you have more money available for other expenses, which in

turn could help you discover a way that you are able to save your home.

This page was intentionally left blank.

Monthly Income & ExpensesIncome Entertainment/RecreationSalary Eating OutInterest Baby SittersDividends Activities/TripsOther VacationOther OtherTotal Income: Other

Total Entertainment/Recreation:Taxes from Income:

Clothing:Net Spendable Income:

Savings:HousingMortgage Medical ExpensesInsurance DoctorTaxes DentistElectricity Credit CardGas/Heat OtherWater Total Medical:SewerTelephone MiscellaneousMaintenance Toiletry/cosmeticsOther Beauty/BarberOther Laundry/CleaningTotal Housing: Allowances

SubscriptionsFood/Groceries: Gifts

CashAutomobiles Cable/InternetPayments OtherGas/Oil Other

Insurance Total Miscellaneous:License/TaxesMaint/Repairs InvestmentsTotal Automobiles:

Education/Child CareInsurance TuitionLife MaterialsMedical TransportationOther Day CareTotal Insurance: Other

OtherDebts Total Education/Child Care:Credit CardsLoans/Notes Total Expenses:OtherOther Net Spendable Income =Other Less Total Expenses: -Total Debts: Extra Cash (needed if negative) =

Notes

Chapter 25New Programs Available

Disclaimer: Now, every effort was taken to keep this book as up-to-date as I

possibly, could, but please be aware that due to the huge impact on the world

economy that foreclosures are having today, several programs are being created to

attempt to minimize this impact. As these new programs become available, I will

attempt to update this book in a timely manner, so that these resources are brought

to your attention as possibilities. Please feel confident that this book will have all the

new programs available to homeowners, up to the date of shipment.

FHASecure: This program is available to homeowners who took out a subprime loan,

because of a low FICO (credit) score, who have stopped making their monthly house

payments, due to their interest rate on their loan has adjusted to a level where they can no

longer afford the monthly payments. The homeowner could not have had any other

hardship, that caused them to stop making payments, and they could not have been late

on their monthly house payments before their interest rate on their home loan adjusted.

The eligibility for this program is very strict, but if this was the only reason that you

failed to make your monthly house payments, then contact a new lender or a mortgage

broker, to see if you can use this program to refinance your home loan into one with a

more affordable monthly house payment.

HOPE Now: Hope Now is a collective alliance between large banks, counselors,

services, and other critical industry supporting organizations with the sole purpose of

trying to keep homeowners in your home and to mediate any foreclosure threats. The

Department of the Treasury and the HUD supported the formation of this alliance to

encourage responsible business practices and to help avoid further down turns in the

housing market. Under Hope Now, major lenders agreed to voluntarily “freeze” low-cost

“teaser” rates on some subprime adjustable-rate mortgages for five extra years, if the

homeowner qualifies using the FHASecure criteria. You can contact HOPE Now by

either calling their hotline at (888) 995-HOPE, or visit their website at:

www.hopenow.com. Here are some of the lenders that are participants of HOPE Now:

* Assurant, Inc.

* Aurora Loan Services

* Avelo Mortgage, LLC.

* Bank of America

* Carrington Mortgage Services

* Citigroup, Inc.

* Countrywide Financial Corporation

* EMC Mortgage, Inc.

* Fannie Mae

* First Horizon Home Loans

* First Tennessee Home Loans

* Freddie Mac

* GMAC ResCap

* Home Loan Services, Inc. (d/b/a First Franklin Loan Services & NationPoint Loan

Services)

* HomEq Servicing

* HSBC Finance

* IndyMac Bank

* JPMorgan Chase & Co.

* Litton Loan Servicing

* MERS

* National City Mortgage Corporation

* Nationstar Mortgage, LLC.

* Ocwen Loan Servicing, LLC.

* Option One Mortgage Corporation

* PMI Mortgage Insurance Co.

* Saxon Mortgage Services

* Select Portfolio Servicing, Inc.

* SunTrust Mortgage, Inc.

* Washington Mutual, Inc.

* Wells Fargo & Company

* Wilshire Credit Corporation

Project “Lifeline”: A program that is available to homeowners who have taken out any

types of home loan, not just subprime loans. The program was put together by six of the

nation's largest financial institutions, (Bank of America, Citigroup, Countrywide

Financial, JP Morgan Chase, Washington Mutual and Wells Fargo,) which service almost

50 percent of the nation's mortgages. Project Lifeline is designed to create affordable

deals that will help homeowners facing foreclosure, a way to delay their foreclosure

process for 30 days to improve their payment situation with their lender. (The goal is to

provide a temporary pause in the foreclosure process “long enough to find a way out” by

allowing homeowners and lenders to negotiate a more affordable mortgage.)

Homeowner Affordability and Stability Plan (HASP): On March 4th, 2009, a new

program called the Homeowner Affordability and Stability Plan was created by President

Barack Obama, in attempts to allow the United States economy to recover from the

failing home loan lenders. The plan would allow homeowners to reduce their monthly

payments, and only on their first home loan, to 31% of their income. So if the

homeowner had multiple home loans, this plan would only allow for the modification of

the first note. This is to try to keep people in their homes and protect them from the

variable rate home loans that would otherwise cause them to fail to make their monthly

payments. This plan is restricted to the following homeowners:

• The homeowner must be current with their monthly home loan payments.

• The homeowner must be in a situation that is threatening their ability to continue

to make the monthly payments. For example: Job instability.

• The homeowner owes a maximum of 125% of the current house value.

• The home loan must be less than $450,000.00 (729,900.00 for high cost areas)

• The home loan must be held by either Fannie Mae or Freddie Mac.

• This plan is not available for investors.

• Any junior lien holders would need to agree to subordinate to the new mortgage

If the homeowner fits all of the above criteria, the may be eligible to refinance their first

home loan note to a 15 or 30 year fixed rate home loan. The homeowner should call their

mortgage broker or their lenders to confirm their qualifications, to leverage this plan.

You can contact Fannie Mae (1-800-7FANNIE) and Freddie Mac (1-800-FREDDIE) to

see if your loan is guaranteed by either of them.

Housing Affordable Modification Plan (HAMP)

• Eligibility:◦ Principle/Interest/Taxes/Insurance > 31% of homeowner's gross income◦ Homeowners that are either delinquent or about to become delinquent◦ Must be on an owner-occupied house from 1 to 4 units◦ Maximum principal owed:

▪ $729,500 – 1 unit▪ $934,000 – 2 units▪ $1,129,250 – 3 units▪ $1,403,400 – 4 units

◦ Loan had to originate before January 1. 2009◦ Need to first attempt to modify the note and either no modification can be

agreed upon or the homeowner fails to maintain the modified terms◦ Any junior liens need to subordinate to the new mortgage

• What to expect:◦ Lower payments◦ Possible reduction in what is owed◦ $1K a year from the government for the first five years, if you (the

homeowner) remains current on the mortgage.◦ Any homeowner that went through foreclosure will be eligible to get some

renter's assistance from the government ($1.5B set aside)• How it works:

◦ Lenders will ask for proof of income◦ Unpaid interest, taxes and insurance payments will be placed on the back of

the note – all late fees and penalties will not◦ Lender will calculate interest rate, so that payment will not exceed 31% of

the gross income▪ Minimum interest rate will be 2%▪ If a 2% interest rate will still not meet the 31% rule

• Lender can extend the length of the note• Defer a portion of the principal to bring the payment at 2% to fall

within the 31% rule◦ The homeowner is placed on a “trial basis” for three months at the proposed

plan▪ If the homeowner remains current – the note is modified according to

the plan▪ If the homeowner defaults – the plan can be modified or the lender can

foreclose◦ The interest rate will be fixed for 5 years, and after the sixth year, it can go

up (1% max) each year until it achieves a interest rate of conforming loans being secured by Fannie Mae or Freddie Mac

◦ Any differed principal will be paid back either at the time the note matures as a balloon payment or when the house sells

• Lender will evaluate which would be more beneficial: foreclose the house or follow the plan that the lender would need to follow for the 31% rule

• Why would the lender want to participate:◦ Lenders will receive a $4K bonus in the form of $1K initially, then $1K for

the next three years that the homeowner remains current◦ Both mortgage servicers and lenders get a $1.5K bonus for every loan they

can convert, before it goes into default◦ Lenders get additional incentives from the government ◦ Mortgage servicers get additional incentives from the government◦ The government will insure the house value if the house value declines

further.

Home Equity Loan Modification (Second Lien Program)

• Eligibility:◦ Homeowner must have a home equity loan or second mortgage loan◦ Homeowner must fir the eligibility requirements of HAMP

• What to expect:◦ Lower payments◦ $250 a year from the government for the first five years, if you (the

homeowner) remains current on the mortgage◦ In some cases a total debt elimination of the junior loan

• How it works:◦ Amortized loans: Interest rate drops to 1% for five years

▪ The period of the note is extended to match the period of the first mortgage

▪ Defer principal in proportion of the deferment of the first mortgage – with a possibility of an option to extinguish the deferred principal according to the Extinguishment Schedule

▪ Interest rate increases to the interest rate of the first mortgage after five years and the total principal owed is amortized at the remaining period of the first mortgage

◦ Interest-only loans: Interest rate drops to 2% for five years▪ Defer principal in proportion of the deferment of the first mortgage –

with a possibility of an option to extinguish the deferred principal according to the Extinguishment Schedule

▪ Interest rate increases to the interest rate of the first mortgage after five years and the total principal owed is amortized at the remaining period of the first mortgage

▪ The period of the note either is amortized over the remaining period of the first mortgage or the period identified in the original loan document (whichever is longer.)

• Why would the lender want to participate:◦ Loan servicers will receive a $1,250 incentive

▪ $500 up-front▪ $250 per year for the first three years – if the borrower remains current

◦ Government will provide incentives to the lender◦ If the lender extinguishes any loan amount the government will pay

▪ $0.03 for every dollar for loans that were in default > 180 days

▪ $0.04 - $012 for every dollar for loans that were less than 180 days in default

Chapter 26More Information

I have presented you with a lot of information and techniques, and some of these

techniques can be very involved, very time-consuming and the lenders can be very

intimidating. Many times it is better to remove yourself from trying to negotiate with

your lenders, and let a third-party, who has years of experience working with lenders, be

on your side, to increase your chances of coming to an agreement with your lenders, so

that you are able to keep your home.

Because I am aware of this fact, I am offering this service to you, at a discounted rate,

because you have invested in this program. If you contact my office at

Inquiries@Synergy-Properties.com, and let us know that you have purchased this

training material, we will reduce our negotiation services from $1,500.00 down to

$1,000.00 (a $500.00 savings, and 33% discount off the retail price.) Just to let you

know, that we will first ask you a couple questions to see if we think that you are in a

position to save your house, before you pay us the fee.

If we think, after talking with you, that your chances of getting an agreement with your

lender are not so good, we will let you know, and tell you what you would need to do,

before we could attempt to negotiate on your behalf with your lenders, and this service is

free, so there is no reason why you should not contact us at Inquiries@Synergy-

Properties.com, to see what we can do for you. There is nothing to lose!

If we believe that the chances are pretty good that we can come up with an agreement

that will save your house, we will send you a packet of information, that you would fill

out, and mail back to us, with your check, and we will start working on negotiating with

your lenders once we get the filled out packet back.

Here at The REI Training Warehouse, we offer several programs to help homeowners

and real estate investor with their training needs please feel free to look us up on the web

at www.REITrainingWarehouse.com or please feel free to send us an email at

Inquiries@TheREITrainingWarehouse.com and ask about other training material such

as:

1. Negotiating with you lender(s)

2. The Complete Foreclosure Process from start to finish

3. Land Lording Tips and Tricks: Secrets that can save you thousands

Again, these are just a couple of topics that are available at The REI Training Warehouse,

please visit us at: www.REITrainingWarehouse.com or please feel free to send us your

requests by sending them to Inquiries@REITrainingWarehouse.com to find more

selections to choose from.

Thank you,

Michael E. Suess