Your Property Connection (YPC) wants you to know that you have OPTIONS other than foreclosure.

We understand that foreclosure can be overwhelming, and we have found the reason people actually loose their home to foreclosure is fear, people won't deal with this unfinished business because of fear. Well, YPC would like to assist in easing your fear and give you some options to help you find the best solution that is right for you.

Go through the list below, figure out what your best options are, 9 out of 10 times most people come to the short sale option as the only other option besides foreclosure. We have made a comparison between Your Property Connection purchasing the property and foreclosure.

KEEPING THE HOUSE

Continue Paying the Loan

If this is possible, pay on the mortgage until the market recovers.

Refinance

YPC has a few referrals, that we have used in the past, that may be able to help.

Personal Loan

Borrow money from a family member or a friend to catch up on any delinquent payments.

Hard Money Loan

If the situation you are in is temporary this could be a way to catch up. Keep in mind that but points and interest rates are very high when you use a hard money loan.

Loan Modification

There many companies out there that will take your money and not produce. Please do your homework. Make sure they are in your home state (all laws will apply), have a written contract and read it, make sure there is a money back guarantee (processing fee may apply). There are people out there that are less than trustworthy, so please do your homework.

If none of these options work for you, try calling your lender(s).

LENDER OPTIONS

Forbearance

A forbearance may reduce your payments or suspend them completely for a period of time, depending on your situation, and often extends the length of your repayment term.

Repayment Plan

A repayment plan may assist your if you are able to pay the regular payment, plus an additional amount per month.

Modification

A Loan Modification will change your existing mortgage note and give you a fresh new start in managing your home. Some examples would be to extending the maturity date, adjust the interest rate and forgive the delinquent amount.

Private Mortgage Insurnace (PMI)

PMI is extra insurance that lenders require from most home buyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI. If you have this, call and see if they can help you.

DON'T KEEP THE HOUSE

For Sale By Owner

Have a little equity but not enough to pay a Real Estate Professional? Sell it yourself!!!! Put a sign in your front yard, advertise on the net (craigslist.com, zillow.com) If you have a few dollars to spend put an ad in the paper, go to FSBO.com or ForSalebyOwner.com, HelpUsell, even some Real Estate Professionals may have an "ala-Cart" fee based system.

Deed in Lieu of Foreclosure
A potential option taken by a mortgagor (a borrower) to avoid foreclosure under which the mortgagor deeds the collateral property(the home) back to the mortgagee (the lender) in exchange for there lease of all obligations under the mortgage. Both sides must enter into the agreement voluntarily and in good faith.

Short Sale
A short sale is when a bank or Mortgage Lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

Bankruptcy
Bankruptcy remains on your credit history up to 10 years. While acceleration of bankruptcy removes many debts, any reference to filing,dismissal or discharge still appears on your credit history for up to10 years. During this time, you'll find it more difficult if not impossible to get a new mortgage, personal loan or a credit card. (experian.com)

Foreclosure
Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. The lender may then declare the entire debt due and owing and may seek to satisfy it by foreclosing.Foreclosure is commonly by a court-decreed sale of the property to the highest bidder, who is often the lender.

GOVERNMENT PROGRAMS / REQUIREMENTS

PROJECT LIFELINE

(money.cnn.com - “Major Lenders put freeze on foreclosures”)

Under the program, homeowners 90 days or morebehind in their mortgages will get a letter from their lenders asking them tocall. Borrowers will be asked if they want to stay in their homes; if so, theywill be offered financial counseling.

Loanmodifications are not automatically granted. Borrowers will have to provideup-to-date information about their wages and debts. At that point, the lendersdecide whether to pause theforeclosure process.

Duringthe moratorium, foreclosure prevention specialists will determine ifthere's a good possibility that a loan modification will work. In other words,will a borrower be able to regain his footing and start paying his mortgageagain?

Anyloan modifications - such as lowering interest rates, balances or both - willbe provisional. After homeowners make payments on time for three months,the changes to the terms of loans will become permanent.

FHA SECURE

Families should not wait to seek mortgagerelief. Right now, homeowners can determine if they are already eligiblefor mortgage assistance through FHAsecure, FHA’s existing refinancingprogram. They can obtain information through either of the followingoptions:

1. Contact a local, HUD-approvedhousing counseling agency at HUD.gov;
2. Contact the HOPE NOW Alliance at 1-888-995-HOPE

· REQUIREMENTS:

Their mortgagemust have originated on or before January 1, 2008;
Their mortgagedebt-to-income must be at least 31 percent;
They cannotafford their current loan;
They did not intentionally miss mortgage payments;
They do not own second homes.
GoodCredit
FHAwill charge PMI based on risk
Thelender has to be willing

PROGRAM 3648 - Debt Forgiveness Act

REQUIREMENTS:

Primaryhome
1million or less forgiven
Debtused to buy, build or improve principal residence
IRSform required
Proofof Hardship and insolvency required

HOPE FOR HOMEOWNERS

REQUIREMENTS:

First lien owner occupied residential adjustable rate loans (ARMS) with initial fixed rate for 36 months or less. – NO 2^nd
Must be originated between 1/1/05 and 7/31/07 and included in securitized pools with reset date between 1/1/08 and 7/31/10.
The loan must be current. Current means not more than 30 days delinquent and not more than one 60 days delinquent in last 12 months.
Loan to value must be less than 97%. MORTGAGE OR EQUITY
FICO Score must be less than 660.
FICO score cannot be more than 10% higher than origination.
Servicer must determine that owner cannot afford higher payments.

YPC purchases the property vs. Foreclosure

Shouldn't I just let my home go into foreclosure? I cant pay it anyways!
Won't I have tax liabilities either way? Not necessarily!

	YPC PURCHASE	FORECLOSURE
IRS	You may receive a 1099-C* from your lender. You will have a full release of debt and liens and proof of insolvency* and FMV** IRS Publication 544 *See link for more detailed information	You will receive a 1099-A* form from your lender. In cases of recourse debt, your lender can come after you for the difference of the loan and actual sale price based on an appraisal regardless of FMV*. IRS Publication 544 See link for more detailed information
Will I lose my home?	Yes, you will have to move.	Yes, and it will be publicly auctioned off.
What will I need to do?	Collect documents required by your lender, participate in calling your lender(s) when needed, be available.	Nothing proactive.
What will this cost me?	YPC trys to create a no out of pocket expenses for the seller, and are usually successful. Some lenders may require a fee or a payment to look at a package.	Depends on how much your home is auctioned for. They may come after you for the difference! Especially if it is a recourse loan. Along with a 1099 creating income on taxes.
What do I do in the meanwhile?	Save the money you'd usually be using on a mortgage or pay off debt to get credit back on track. Find a place to stay.	Worry about the future of your home and your credit. Save the money that you are not using for your mortgage or pay off debt.
Can I buy my own home back after?	No. Part of the process is proving insolvency, and to buy your house back would disprove your insolvency* and would be committing fraud.	Yes, you can pay the full loan amount in cash at auction.
How will my credit be affected?	A settlement or short payoff of your loan and delinquent payments will show up on your credit. It may last approximately 2 years (as opposed to 7 - 10 for foreclosure).	Approximately 250 or more points off your FICO score, increased insurance rates, interest rates, and possible trouble getting loans or finding a place to live. Employers are also checking credit more and more commonly in hiring practices.
Who will I be working with?	Your Property Connection	That depends of how proactive you are, but for the most part you would be working with your lenders collections department.
How long will the process take?	This is dependant upon your lenders willingness to negotiate, prospective buyer timeframes, and when the lender would like to close. Approximately 3 to 10 months.	Approximately 120 days until your home is sold at public auction.
When all is said and done, whats the result?	Your home will have been sold by a Real Estate Professional.	Your home is auctioned, you will be given 30 days notice to vacate, and have possible collections activity even after it has been sold.

*Insolvency is often incorrectly used as a synonym for bankruptcy. Insolvency is a financial condition experienced by a person or business entity when their assets no longer exceed their liabilities, commonly referred to as 'balance-sheet' insolvency, or when the person or entity can no longer meet its debt obligations when they come due, commonly referred to as 'cash-flow' insolvency. (wikipedia.com)

*Insolvency exclusion. You are insolvent when, and to the extent, your liabilities exceed the fair market value of your assets. Determine your liabilities and the fair market value of your assets immediately before the cancellation of your debt to determine whether or not you are insolvent and the amount by which you are insolvent.

Exclude from your gross income debt canceled when you are insolvent, but only up to the amount by which you are insolvent. However, you MUST ust the amount excluded to reduce certain tax attributes, as explained later under Reduction of Tax Attributes.
IRShttp://www.irs.gov/publications/p908/ar02.html#d0e1058

**FMV Fair Market Value