The Road to Recovery

MN Home Help NetworkIndustry experts guiding home owners through the complex issues of our current market.www.MnHomeHelp.comAgendaWhy we are here.Housing Default Trends.Lenders dont want your house, but there are hurtles & state organizations to help.Solutions for Unaffordable Mortgages. Avoiding Foreclosure.Remaining a Home Owner.

www.MnHomeHelp.comMissionMinnesota Home Help is a group of industry professionals working together to find the best solutions available for difficult home ownership issues. By providing Minnesotans with an understanding of their options and available resources we are able to guide them to the solution that best fits their needs. Improving the housing economy one home owner at a time.www.MnHomeHelp.comWho Can Help?AttorneysRealtorsAccountantsFinancial AdvisorsLoan AdvisorsPublic and Non-Profit Organizations/ServicesHome Ownership Center (enter phone#)Loan ModificationCredit RepairLutheran Social Services (enter phone#)Financial Counselingwww.MnHomeHelp.comWhy are we here?Mortgage payment exceeds the budget.Past Lending PracticesNon-Traditional LoansFinances and/or Credit in jeopardyNo savings because house payment is too highAccumulating debt due to high house paymentLife circumstances have changedJob lossDeath in familyGrowing family

www.MnHomeHelp.comOther Common OccurrencesHome wont sell for enough to pay off lender.Need to downsize but cannot get home sold.Cannot get lender to approve sale.Cannot get lender to cooperate on restructuring the existing loan.

www.MnHomeHelp.comMortgage Default StatisticsInsert graphs4 yr default trend% of foreclosures averted in 2008 vs 2009Goal to eliminate as many foreclosures as posiblewww.MnHomeHelp.comEvery Case is UniqueThere is no One Size Fits All solution.Put your family first.Know your budget.Know your options.Talk to the experts.Understand the laws.Know the facts about your situation.Legal advise is a must.www.MnHomeHelp.com5 Step PlanTransitioning into a future of home ownershipthat is better for you and your family.www.MnHomeHelp.comStep 1:BudgetReview your budget & seek professional advise Contact LSS or HOCDoes your current loan payment fit into your budget?Mortgage should be 30% of Gross IncomeTotal revolving debt should be 45% including house payment.May need to reduce cost of housing and perhaps other debt.

www.MnHomeHelp.comStep 2:Loan ConsultationConsult a Loan Officer about RefinancingLower Rate, perhaps Fixed RateLower overall paymentSee Realtor before paying for appraisalIf no refinancing option works contact HOCNegotiate a Loan ModificationNegotiate ForbearanceSome borrowers may not qualify for Refinancing or Loan Modification.

www.MnHomeHelp.comStep 3:Home ValuationRealtor will visit your homeComparable homes SoldCondition of home compared to those SoldMarket time to expectSelling OptionsTraditional Sale Home will sell for enough to pay off the existing home loan(s).Short Sale Home value doesnt support payoff and will require lender approval.

www.MnHomeHelp.comStep 4:Attorney ConsultationNote: Not all attorneys will charge you up front. Lenders will allow proceeds from the sale of the home to cover the payment of an attorney that is advising the seller and negotiating the short sale.

Note: Do not do a short sale without consulting a RE Attorney that specializes in short sales.

www.MnHomeHelp.comAttorney (continued)Review of your overall situationTerms of your home loan(s)Refinance history and equity drawnPersonal HardshipRepayment abilityLiability of Second Mortgage or other LiensTax Liability You may be directed to an AccountantTo Short Sale or Not To Short SaleReview final terms of the short sale

www.MnHomeHelp.comStep 5:What is Your Best OptionYou have gathered the facts about your personal situation and the options available to you.

Loan Modification/RefinanceSell the homeRent out your homeShort SaleDeed in lieu of foreclosureForeclosurewww.MnHomeHelp.comShort SaleBetter to sell prior to sheriff's saleBetter to sell without missing paymentsAvoid the emotional strain and credit damage of a foreclosureStart with Legal ConsultationPrepare home for sale

www.MnHomeHelp.comShort Sale (continued)Listing - market value is keyShowings - allow every showing possibleNegotiating offer with buyerNegotiating accepted offer with lenderLender approval and termsTitle Work and ClosingProfessional service fees paid out of the proceeds of the sale at closing.

www.MnHomeHelp.comForeclosureThe Foreclosure ProcessYou have spoken with an attorney and exhausted your options.Giving it to the lenderDeed in Lieu of ForeclosureAccelerated RedemptionForeclosure by AdvertisementSheriff delivers notice of foreclosurePublic notice of Sheriffs Auction6 month period following sheriffs saleNew laws allow deferment of sheriffs saleYou can still work things out with the lender during redemption.You may sell the property during this periodMay need bank approval for saleIn a specific situation the property may be sold for less than what is owed by the seller without getting lender approval (see attorney)Redemption ends - All rights to the property are that of the lien holderwww.MnHomeHelp.comForeclosure (continued)Why you want to avoid Foreclosure.It destroys your credit.Second mortgage can file a judgment.Home owners association can file a judgment.More difficult to borrow in the future.Higher interest rates and fewer loan options .Red flags on rental applications. May have to pay higher rent or larger rental deposit.www.MnHomeHelp.comBuying AgainAfter ForeclosureFHA 3 yrsConventional 5 yrsAfter Short SaleImmediatelyMust have good payment historyMust have good credit score (650 or higher)Contract for Deed/Rent to OwnRequires Downpayment or Option FeeConsult a loan officer to review the terms of financing the seller/landlord is offeringIs the monthly payment 30% of Gross IncomeIs your total revolving debt 45% including house paymentAre you on track to qualify for a loan to pay off the seller/landlord in 3-5 years

www.MnHomeHelp.comBuying AgainRemember the Basics!BudgetSet your budgetStick to your budgetBe educated and buy smartSeek the help of a professionalHOC Home buyer classesNot just for first time home buyersLower default rate

www.MnHomeHelp.comFAQsWhy am I having a hard time getting the lender to restructure my loan?Can a lender take funds from my retirement account in a short sale?What if I owe more on the home than I can afford even after modifying the loan?

www.MnHomeHelp.comTaking ActionYou know your optionsYou know your resourcesPut the system to work for you

Contact HOC today to get started!Modify the loan! Stay in your home!www.MnHomeHelp.comResources for Healthy Home OwnershipLoan Modification HOC651-659-9336www.HOCMN.org

Financial Counseling LSS651-642-5990www.LSSMN.org

For more resources visit:www.MnHomeHelp.com

www.MnHomeHelp.com