Short Sale, Foreclosure and Strategic Default

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Monday, June 11, 2007

Pre foreclosure - keeping your home

Wish to keep your home?
Here is part of our checklist

Potential Legal Outs or leverage

1. Predatory Lending
2. Non compliant documents
3. Faulty closing
4. Overcharging on the loan

Standard ways to prevent foreclosure

1. Pay off the entire loan
2. Pay the reinstatement amount
3. Mortgage Modification or Negotiate a new repayment plan
4. Refinance the loan with your lender or a new lender
5. Special Forbearance
6. Partial Claim against FHA insurance fund
7. Combination of the above
8. Short payoff and refinance with a lender for a new lower amount
(you usually need a very smart bank or a solid legal position for this)
9. Repayment plan forced on the bank though chapter 13 workout plan.

some of the Risks
1. Deficiency suits for the short fall between loan and the amount collected. (this may be subject to negotiation if applicable.)
2. IRS bill which could change your tax bracket for the loan forgiveness
3. Giving the bank financial information about the location and size of your assets.
4. Speaking with an adviser who can not protect your conversations from discovery by third parties.
5. Watch out for scams.

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