Rick Smenner, Agent RE/MAX Preferred Properties, Inc.

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Rick Smenner, AgentRE/MAX Preferred Properties, Inc.


My Solution Process

1. Analyze YOUR Situation

2. Explain all of YOUR Options

3. Recommend a SOLUTION





My Solution Process


1. What happened to get you here? (make notes for hardship letter)2. What solutions (foreclosure) have you sought to remedy situation?3. How much did you PAY for the house? When? Worth now?4. How much OWED? 1st / 2nd / Other Liens against property5. How much are your payments? 1st / 2nd – include taxes/insurance?6. How far behind are you on payments? Late fees/penalties? 7. What is the current condition of the house? Any problems? 8. What kind of work needs to be done to the house? 9. Are you behind on other bills – credit cards/utility/car payments? 10. What is you current monthly income? How stable is job? 11. Based on your income – how much can you afford to spend monthly? 12. How much CASH do you have available? In 30 Days? 13. Do you have any fall-back resources? (401K – Life Policies – Retirement Accounts – Annuities – Investments – Jewelry – Other Assets)14. Would you prefer to STAY or VACATE? Why/Why Not? 15. If you were to VACATE where would you go?

16. WHAT TROUBLES YOU THE MOST ABOUT THIS SITUATION?

Questions


1. Any Letters/Documents received from the Lender2. All Legal filings and Official notices3. Materials (solicitations) received from others 4. Original house purchase documents5. Recent appraisals – Major Improvements6. Tax Returns / Pay Stubs / Bank Statements7. Investment / Retirement / 401K / IRA Accounts8. Paid up Life Insurance Policies / Annuities9. List of Personal Assets - Financial Statement

Review Documents

The Property1. Detailed ‘work to be done’ List - Major Mechanical Deficiencies2. Possible Marketability Issues / Challenges





My Solution Process


DOING SOMETHING versus

DOING NOTHING

IT’S YOUR DECISION…THE RISK OF DOING NOTHING


THE RISK OF DOING NOTHING

FUTURE Negative Impact:

• Family Housing Needs

• Auto/Health Insurance Rates

• Sky High Financing Rates

• Employment / Job Applications

• Investigative Background Checks

• College Grants and Scholarships



FORECLOSURE INFORMATION REMAINS PUBLIC!! Embarrassing Humiliating Shameful

Don’t Let this Happen to Your Family…




DOING SOMETHING versus

DOING NOTHING

IT’S YOUR DECISION…THE RISK OF DOING NOTHING


SHOULD YOU STAY? or

SHOULD YOU VACATE?

IT’S YOUR DECISION…PLAN TO STAY OR PLAN TO VACATE


DESIRE – do you really want to stay in the home?

Key issues to be considered…

MONEY – can you afford to stay in the house?

FINANCIAL – does it make good fiscal sense to stay?

TIME – do you have enough time to arrange to stay?

COMMITMENT – are you willing to do whatever it takes?

STAY or VACATE?

PLAN TO STAY OR PLAN TO VACATE


DESIRE – do you really want to stay in the home?

Assign a POSITIVE (+) or NEGATIVE (-) to each of the following:

MONEY – can you afford to stay in the house?

FINANCIAL – does it make good fiscal sense to stay?

TIME – do you have enough time to arrange to stay?

COMMITMENT – are you willing to do whatever it takes?

The Stay or Vacate

Scoring: 4 or 5 Pluses = You Should Absolutely STAY!!3 Pluses = It’s Rather Questionable 1 or 2 Pluses = You Should Plan to VACATE!!

+ -

+ -

+ -

+ -

+ -

# of Pluses

DECISION MAKING GRID


IT’S YOUR DECISION…

STAY or

VACATE?

IS IT BETTER TO STAY OR VACATE?


STAY OPTIONS 1. Refinance or Payoff the Loan





2. Pre-arranged Sale / Leaseback






3. Negotiate a Lender Workout






REINSTATEMENT =





FOREBEARANCE =





LOAN MODIFICATION =


LOAN MODIFICATIONWhen does it really make cents?

… DO YOU MAKE TOO MUCH / TOO LITTLE?

… IS THERE A SUSTAINABLE INCOME?

… IS THE LENDER JUST TEASING YOU? (Have they provided you with a written Loan Modification Benefits Analysis yet? – If not they probably aren’t going to do so.)

… DOES IT REALLY MAKE GOOD FISCAL SENSE?

1. Property Taxes per month: $_____________ (this won’t change)

2. Property Insurance per month: $ _____________ (this won’t change)

3. Hopeful Principal Payment at ____ % = $ _________ (this may change)

SIMPLIFIED (+ HOPEFUL) MODIFIED PAYMENT CALCULATOR –



4. File for Bankruptcy??








… ONLY DELAYS THE FORECLOSURE – NO STOPPING IT

… BETTER TO FILE BK AFTER FORECLOSURE – NOT PRIOR

… CAN SOMETIMES COST YOU MUCH MORE $$$$







IT’S YOUR DECISION…

STAY or

VACATE?

IS IT BETTER TO STAY OR VACATE?


VACATE OPTIONS 1. Abandon the Property


VACATE OPTIONS 1. Abandon the Property


VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu



… YOU GIVE UP ALL OF YOUR RIGHTS

… THEY MAY NOT WANT IT OR TAKE IT

… LENDER MAY STILL FORECLOSE

… THERE ARE NO GUARANTEES



3. Rent Property to a Tenant




… TAKES TIME AND $$$ TO GET RENTED

… ONE PROBLEM TRADED FOR ANOTHER

… LENDER MAY STILL FORECLOSE

… THERE ARE NO GUARANTEES








4. File for Bankruptcy?? … ONLY DELAYS THE FORECLOSURE – NO STOPPING IT

… BETTER TO FILE BK AFTER FORECLOSURE – NOT PRIOR

… CAN SOMETIMES COST YOU MUCH MORE $$$$





5. SELL THE PROPERTY!!





5. SELL THE PROPERTY!!


SELL THE PROPERTY


SELLING OPTION 1TRADITIONAL RETAIL SALE


SPRUCE UP THE PROPERTYMAKE ALL THE NEEDED REPAIRS

TRADITIONAL RETAIL SALE

SELLING OPTION 1



+ = Should Sell for the Highest Price- = Will Take the Longest Time to Sell- = Need $$ and Time for Repairs

- = Proceeds May Not Satisfy all Liens

TRADITIONAL RETAIL SALE

SELLING OPTION 1


SELLING OPTION 2SELL WITH CREATIVE FINANCING


SELL WITH CREATIVE FINANCING

YOU BECOME THE BANK

SELLING OPTION 2


SPRUCE UP THE PROPERTY MAKE ALL THE NEEDED REPAIRS

+ = May Sell for a Higher Price- = May Take the Less Time to Sell- = Need $$ and Time for Repairs


- = Increased RISK for both Parties

SELL WITH CREATIVE FINANCING

SELLING OPTION 2


SELLING OPTION 3SELL IN “AS-IS” CONDITION



SELL IN “AS-IS” CONDITION

SELLING OPTION 3



+ = Will Sell for the Much Less $$- = Will Take the SHORTEST Time to Sell- = Need $$ and Time for Repairs


SELL IN “AS-IS” CONDITION

SELLING OPTION 3


SELLING OPTIONS

3. SELL IN “AS-IS” CONDITION

2. CREATIVE FINANCING

1. TRADITIONAL RETAIL SALE


WHAT HAPPENS…IF WE OWE MORE THAN IT SELLS FOR??



“AS-IS”VALUE

=

$ 150K

TOTALOWED

=

$ 190K

$ 40,000 IN NEGATIVE EQUITY!!



“AS-IS”VALUE

=

$ 150K

TOTALOWED

=

$ 190K


OPTION 1 = BRING $$ TO THE CLOSING TABLE



“AS-IS”VALUE

=

$ 150K

TOTALOWED

=

$ 190K


OPTION 2 = NEGOTIATE A REDUCED PAYOFF


HOW TO NEGOTIATE A REDUCED PAYOFF

WITH YOUR LENDER?


Negotiating a Reduced PayoffAKA = Negotiating a “SHORT SALE”

Contact the LENDER to determineShort Sale

requirements

1




requirements

Retrieve and Assemble

ALL of the required

documents

1 2




requirements

PREPARE a ComprehensiveSHORT SALE

PACKET


ALL of the required

documents

1 2 3




requirements


PACKET


ALL of the required

documents

SUBMIT the PACKET

and VERIFYthat the LENDER

received it

1 2 3

4




requirements


PACKET


ALL of the required

documents

SUBMIT the PACKET


received it

Continue to MONITOR PROGRESS

with the LENDER

1 2 3

45




requirements


PACKET


ALL of the required

documents

SUBMIT the PACKET


received it


with the LENDER

Regularly UPDATE

all of the PartiesInvolved in the

Sale of theProperty

1 2 3

456




requirements


PACKET


ALL of the required

documents

SUBMIT the PACKET


received it


with the LENDER

Regularly UPDATE


Sale of theProperty

Be Availableto retrieve

missing and updated docsfor the Lender

1 2 3

456

7




requirements


PACKET


ALL of the required

documents

SUBMIT the PACKET


received it


with the LENDER

Regularly UPDATE


Sale of theProperty



1 2 3

456

7 Review the TERMS and

Conditions of the Reduced

Payoff

8




requirements


PACKET


ALL of the required

documents

SUBMIT the PACKET


received it


with the LENDER

Regularly UPDATE


Sale of theProperty



1 2 3

456

7 Review the TERMS and

Conditions of the Reduced

Payoff

8 Coordinate andTROUBLESHOOTIn order to GET

THE SALE CLOSED

9





My Solutions Process


My Recommendation:


Rick Smenner, AgentRE/MAX Preferred Properties, Inc.

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