1. Facing Foreclosure

2. 1 in every 113 homes in foreclosure 1 in every 240 homes in foreclosure County with highest rate of foreclosure filings in FL? 1 in every 72 homes in foreclosure Latest foreclosure statistics

3. Default by Borrower Written Notice from Lender  Intent to Accelerate Foreclosure Process  Failure to make monthly payment  Notice of default  Right to reinstate or cure default  Right to dispute validity of debt within 30 days of notice in accordance with Fair Debt Collection Practices Act

4. Foreclosure complaint filed Service of summons and complaint Foreclosure Process cont.

5. If Borrower does not file answer or response to Complaint:  Lender will likely eventually ask Court for Summary Final Judgment  Lender may ask Court for Default Final Judgment If Borrower files response to Complaint:  Lender may ask Clerk to enter Default  Borrower receives notice of Default entered by Clerk

6. Foreclosure Processcont. Foreclosure Process cont. Final judgment of foreclosure  Sets forth the amount due to Lender and will list instructions for sale of mortgaged property at a public auction typically 30 days after entry of final judgment

7. Deficiency judgment:  Difference between fair market value of property on foreclosure sale date and what you owe Lender  Lender must request in Complaint and judgment must reserve court’s jurisdiction to enter  Lender must obtain within one year of final judgment of foreclosure Foreclosure Process cont.

8. Alternatives to Foreclosure Loan modification * Reinstate * Typically requires hardship letter, explaining circumstances that caused you to fall behind, and details of your financial situation  Add unpaid balance to the principal of your loan  Temporarily reduced or waive payments (forbearance agreement)  Must pay all amounts owed

9. Alternatives to Foreclosure cont. Sell the property Short sale * * Typically requires hardship letter, explaining circumstances that caused you to fall behind, and details of your financial situation  Lender agrees to accept proceeds of short sale and typically forgives the remaining debt  May be tax ramifications

10. Deed in lieu of foreclosure *  Convey Borrower’s interest in property to lender typically in exchange for forgiveness of debt * Typically requires hardship letter, explaining circumstances that caused you to fall behind, and details of your financial situation Alternatives to Foreclosure cont.  May be tax ramifications

11. Strategies for Working with Lender If foreclosure action has been filed:  Contact attorney representing lender to obtain authority to contact Lender directly to discuss your alternatives to foreclosure Contact lender’s Loss Mitigation department Follow-up with Loss Mitigation Specialist assigned to your file regularly

12. Government’s Mortgage Relief Program Federal government launched the Hope for Homeowners Program on Oct. 1, 2008  New mortgage will not exceed more than 90% of new appraised value of home  Refinancing with FHA

13. Hope for Homeowners Program Voluntary program for lenders Voluntary program for lenders Initially projected to help 400,000 struggling homeowners avoid foreclosure over three years Certain eligibility requirements must be met by Borrower

14. Hope for Homeowners Program cont. More information call 1-800-CALL-FHA (255-5342) Since inception of program less than 150 applications have been received New relief programs recently announced by Freddie Mac and Fannie Mae, Citigroup, JP Morgan, and Bank of America who acquired Countrywide Financial

15. Foreclosure Scams ! They may promise to: Filing of foreclosure action tips off scam artists that you’re in trouble  Save your credit  Cure the default  Give you some money if you sign your house over to them If it sounds too good to be true, it is!

16. Impact on Borrower’s Credit Rating Payment 30 days late or more:  FICO credit score may drop approximately 100 points Short Sale:  FICO credit score may drop approximately 200 points or more  May be able to obtain loan for new home within 2 years  May appear on credit report for 7 years

17. Impact on Borrower’s Credit Rating cont. Deed in lieu of Foreclosure:  FICO credit score may drop approximately 250 points or more  Will appear on credit report for 7 years Foreclosure:  FICO credit score may drop approximately 125 to 175 points  Will appear on credit report for 7 years