I often receive calls or emails asking for assistance/advice from homeowners who owe more than their home is worth. There is a big industry of companies claiming to assist these homeowners and many simply charge a fee and do nothing.  I don’t know anything about IFR Loan, but I do know the vice president, Phil Atwan.  I have known him professionally for nearly twenty years.  My husband George was his neighbor thirty five years ago and knows Phil’s family.  Phil is a good guy, if you need help call him, I would trust him.

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Are there Alternatives to Foreclosure? You may be facing foreclosure…so what are your options? 

1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at a foreclosure auction.  Loan applications generally ask if the applicant has ever been foreclosed upon.  Credit reports also disclose this damaging information. 

2. Reinstatement If in default, the borrower may pay all past due amounts including: back interest,
Attorney /trustee fees, late fees and taxes, can bring the loan current.

3. Loan Modification – The ability to restructure the current mortgage between you and your lender.  It is a change in one or more of the loan terms which results in a payment the homeowner can afford.  (IFR and its team of attorneys may be able to assist you with a Loan Modification.)

4. Forbearance – The Lender may arrange a repayment plan based on the homeowner’s financial situation.  The lender could provide a temporary payment reduction or suspension of payments.  Information will be required from the lender to show that you are able to meet the new payment plan.

5. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing.  Banks generally require the home be well maintained, all mortgage payments and taxes must be current.  Most loan applications ask if the borrower has ever given property back to a bank.

6. Bankruptcy – This option can liquidate debt and/or allow more time.  You will need to retain a qualified bankruptcy attorney.
     --Chapter 7   (Liquidation) To completely settle personal debt.
     --Chapter 13 (Wage Earner Plan - Individual) Payments are made toward a plan to pay off debt in 3-5 years.
     --Chapter 11 (Business Reorganization) A business debt solution.

7. Sale – If the property has equity (money left over after all loans are paid), the homeowner may sell the home without lender approval through a conventional home sale.  On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender if what is owed is MORE than the property’s value.

Can I get out of My House Payment Alive? Today many homeowners find themselves upside down in their property and in financial hardship due to a challenging economy.  They are uncertain as to what to do, and realize they cannot maintain the monthly payments for a home that is worth less that the actual loan balance.  Some have turned towards a loan modification, but unfortunately a great number of homeowners who apply will not qualify.  Are there any helpful answers to resolve this situation? 

Today many who need to sell property which has devalued are doing a Short Sale.  A Short Sale is the ability to sell the home for a fair market value, yet the bank accepts less than what is owed on the mortgage.

A number of homeowners are turning to their Realtors and Short Sale Negotiation companies like IFR to facilitate a Short Sale.  One of the criteria a bank looks at is a seller’s hardship - which must be a legitimate hardship due to one or more of the following reasons: unemployment, reduction in job hours, death of a spouse, decline in business if self employed, a medical or recent disability or illness, relocation, military obligations, and divorce.

Can you please answer some of my questions?!!

Will the bank pursue me for the differences I owe?                                                     
Not if the loan is non-recourse (purchase money). 

Does some sort of Hardship have to be present for a Short Sale to occur?               
Yes.  A short sale is for people suffering financial or personal hardship.  It is not simply an escape from a bad investment or choice of loan.  Lenders are placing increase focus on whether there is a true hardship.

Why do I have to submit a Short Sale package?                                                              
All lenders require a complete short sale package, including tax returns, bank statements, pay stubs, other forms of income, household expenses and a handwritten hardship letter.

Can I sell my property for any price?                                                                 
No.  Lenders are looking for particular ratios in comparison to market value, and unreasonable offers have a very small chance of success.  If your lender believes it is better off financially to foreclose, it will do so.  The lender will foreclose if you do nothing or if you give them an incomplete short sale packet or an unreasonably low offer.

Will I get any monies from the sale?                                                                             
Not usually. Most lenders will not allow a borrower to receive any money.  If the lender thinks you are getting paid from the sale, they will terminate the short sale.

How long will this take?                                                                                               
This is entirely up to the lender.  Some lenders take as little as two weeks, some over six months. The only way to know is to begin the process.  The key is making sure that your Short Sale package is complete with continuous follow-up with the bank.

Will a Short Sale hurt my Credit?    Perhaps.  Though the short sale may not show up on your credit, the short sale is reported as “Paid-Settled”.  If you are late with your monthly payments, your lender will report this and your credit will be affected.  A Foreclosure is detrimental to ones credit score.

IFR negotiates with the lenders for the purpose of affecting a Short Sale. 

Short Sale or Loan Modification questions? Contact Phil:

Phil Atwan,
Vice President 
Short Sale Negotiators
Loan Modifications
IFR Loan
Direct (213) 477-0006
Toll Free: (866) 990-1437