Lake County Foreclosure Mediation Program
Foreclosure Mediation:
Is it for me?
Foreclosure Process
Topics Covered
Foreclosure Mediation
Foreclosure Process
Retention options - keep your home
Disposition options - exit the home
Talking to your lender
Moving Options
Offers a strategic and graceful exit to people who have demonstrated hardship and don't qualify for a loan modification
Staying Options
What is Foreclosure Mediation?
Court program
Solution driven
Assess your goals
Review possible solutions
Help gather information
Open dialogue
How will the program benefit me?
We will work with you to avoid the need for multiple document submissions.
Legal Stay: the court proceedings stop while you are in the program.
Mediation: the lender and their attorney are required by the court to participate.
Who will work with me?
Mediators
What now?
Foreclosure Timeline
What to expect?
Don't panic...the process takes time
The average foreclosure takes about 365 days from 1st missed payment
Foreclosure Timeline in a Normal Market: Assumes continually missed payments and no attempt to resolve.
Jan 1: 1st missed mortgage payment
Feb 1: 2nd missed payment - lender sends default notice
Mar 1: 3rd missed payment - lender sends default notice
May 15: Homeowner served with summons/complaint
June 15: Homeowner's Answer to complaint is due
Jul 15: Judge enters Order of Default against homeowner
Dec 15: Judicial sale of home
Jan 1: Judge confirms sale and orders possession
Feb 1: Homeowner is evicted
The Key Rules
Don't put your head in the sand
Open all your mail
Don't move out (until a judge tells you to or you reach an agreement)
Pay your HOA and taxes
Be honest and accurate with your lender
Resolution Options
Stay Option. Situation is curable, keep the home.
Move Option. Transition out of the home.
Loan Modification
What does loan modification do?
It changes the terms of the loan in order to:
-Bring loan current
-Sustain affordability for the life of the loan
Loan Modification and Affordability
31% housing to income ratio
Compares mortgage payment to gross income
Mortgage payment = PITI(A)
Principal, Interest, Taxes, Insurance, Assessments
Gross income (before taxes, deductions taken out)
Reaching a Modification (31% HTI)
Reduce interest rate permanently or temporarily
Extend loan term
Add arrearages and fees to loan balance
Forgive a portion of the principal balance
Forbearance
Suspend partial/full payment
Must demonstrate hardship is short-term or ending
Immediate relief
Often provided with little paperwork
Always ask your lender if it is an option
Other Staying Options
Refinance: Lowers interest rate for homeowners who missed 0-1 payments in the last 12 months
Repayment Plan: Adds arrearages to monthly payment
Reverse Mortgage: For homeowners age 62+ with a lot of equity
Your Workout Options
Your loan type
Your lender, servicer and investor
Property value
Your financial circumstances
Reason for default (hardship vs. debt)
When purchased (more options if after January 1, 2009)
Bankruptcy
Consider if:
Turned down for a loan workout
Default is due to debt not hardship
Can usually remain in the house
May qualify for a loan mod after bankruptcy is discharged
Obtain legal counsel proficient in both foreclosure and bankruptcy
Eligibility Guidelines to Move
Guidelines vary by investor but typically include:
Ineligible for loan workout
Unable to sell home after listing for 90 days
Experienced a long-term hardship
Owe more than the home is worth
Behind on mortgage payments
Can no longer afford home and are ready to leave
Short Sale
Lender accepts less than loan balance due and incurs cost of the sale
Depends on a market analysis
Lengthy process with lots of red tape
Need to negotiate with all lien holders
Use a realtor experienced in short sales in your neighborhood
Affordable Housing Corporation of Lake County (AHC) 847-796-8050
Deed in Lieu
Lender repossesses property and homeowner is relieved of debt
Must leave property in good condition
More viable if no subordinate lien holders
More lenient guidelines than short sales
Benefits of Moving Options
Relocation cash incentives possible
Subordinate debt is often relieved
Forgiveness on tax ramifications may occur
Less damage to your credit than a foreclosure
May purchase a home in 2-3 years (versus 4-7 after a foreclosure or bankruptcy)
Intentional Foreclosure
Can be an intentional choice to create breathing room, save and prepare for the future
Commit to basic property maintenance prior to eviction
Possible ramifications:
Owe taxes
Damage credit profile
Property deterioration, impact on neighborhood
Communicate with your lender
Lake County Foreclosure Mediation Program
Attorney
Handle on your own
Foreclosure Mediation Program
Application packet and financial documentation
Counseling and intervention with your lender
Prepare a loan workout packet
Mediation
Call before your deadline expires 847-377-3552!
Work with an Attorney
Represent you in mediation and in court
Prairie State Legal Services 847-662-6925
Lake County Bar Association 847-244-3143
Talk to Your Lender on Your Own
The Initial Call
Explain your situation concisely
Clarify documents required and the submission process
Identify a single point of contact
Request a forbearance
Ask for time-frame for decision making
The Follow-Up Call
Keep detailed communication log
Save all paperwork
Make copies of documentation submitted
Read all mail and answer all calls
Consistent and determined follow through
Resources
AHC http://www.ahclc.org/saveyourhome.html
For questions about housing counseling please call:
Affordable Housing Corporation of Lake County (AHC) 847-796-8050
For questions about the program please call:
Resolution Systems Institute (RSI) 847-377-3552
Foreclosure Mediation Program
847-377-3552
Affordable Housing corporation of Lake County (AHC)
847-796-8050
Documents Webinar: https://prezi.com/wcomyntviv8x/preparing-a-loan-workout-packet/
Prairie State Legal Services
847-662-6925
Lake County Catholic Charities
847-782-4000
Consumer Credit Counseling Service of Northern Illinois
815-338-5757
Present Remotely
Send the link below via email or IM
Present to your audience
- Invited audience members will follow you as you navigate and present
- People invited to a presentation do not need a Prezi account
- This link expires 10 minutes after you close the presentation
- A maximum of 30 users can follow your presentation
- Learn more about this feature in our knowledge base article
Lake County Foreclosure Mediation Program
No description
by
Tweet