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Insurance Needs during a Foreclosure

If you’re facing foreclosure, chances are good that you have many worries on your mind. After all, you stand to lose the home that you’ve worked so hard to keep. In addition to the psychological and physical disruptions that your foreclosure is likely to cause for your family, you’ll have plenty of financial issues to keep straight as well. One that is often missed is your Home Owners Insurance.

Most Homeowners and homeowner’s insurance companies bundle their policies’ premiums in with their holders’ mortgage payments. Then the insurance policies premiums are paid from an escrow account. Once you’ve stopped making your mortgage payments, it’s likely that your lender will stop paying your policy once the escrow amount is depleted and place their own policy on the property.​

If you’re resigned to the fact that you’ll lose your home in foreclosure, you might be comfortable with this arrangement. After all, it will remove a significant financial burden from your shoulders and force your mortgage lender to take responsibility for your home.
According to Joe Weiler, A representative for Country Financial Insurance, “There are several reasons why this is not a good idea for the Property owner. There are Three main components to any Homeowners Policy, Structural, Personal Liability and Personal Possessions.”​

If your policy lapses and the lender places insurance on your property this only covers the Structural aspect of the policy and is typically more expensive. This lender placed insurance does not protect the Homeowner from a personal liability lawsuit or any of their possession in the house.​

If you wish to fight your foreclosure proceedings, you will eventually “reaffirm” your mortgage. This will require you to pay off the loan’s delinquent balance and the cost of the lender placed insurance since it has been added to the outstanding amount owed.

Also, If lender place insurance was purchased by the lender, Once you work out the payment with the lender, you will have to seek another homeowner’s insurance policy and it is possible you will have to pay a hefty premium for your coverage. After your policy’s cancellation, it’s unlikely that your current provider will take you back without raising your premiums by a significant margin. Likewise, other insurers might view your brush with foreclosure as a major risk factor and charge you accordingly.

​So what is the best course of action?

​Mr.Weiler recommends, First, If you are having an issue, contact your Insurance agent immediately and explain the situation to them. Together you can come up with a strategy to ensure that you and your possessions are protected through the process whatever the outcome.​

Second step will be dictated by your goals for your property, But in most cases it would be in your best interest to continue paying your insurance premiums yourself directly to the insurance company if at all possible, But this decision is best made with the advice of an insurance agent that you know and trust.​

The ins and outs of homeowners insurance (during foreclosure and otherwise) can be tricky. Luckily, you don’t have to figure it out on your own. Give Joe a call for a No Cost planning session into your insurance and retirement needs, at (847) 223-9900 or visit him on the web for information about your all insurance and financial planning needs.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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Illinois Deficiency Judgment: Rare, but it can happen

Recently, I had a phone conference with a client whose house in the northwest suburbs was nearing the end of a strategic default. He stopped paying the mortgage about a year ago due to a divorce and the fact that the property was $100k+ underwater.

The sheriff’s sale was already done and he wanted me to review the order entered in court that confirmed the sheriff’s sale.​

I almost spit out my morning coffee as I read this part of it:​

“That there be entered an in personam deficiency judgment in the amount of $136,000 against the Defendants _____________, with interest as provided in Section 1508 (e) of the Mortgage Foreclosure Act.”

This meant that the lender, Harris Bank, went through the cumbersome, seldom used process of obtaining a deficiency judgment against the owners. The chances of this happening very slim, but it is allowed by law.​

Usually the order confirming the sheriff’s sale says that a deficiency judgment is entered in rem against the property. Seeing this freaks out the client, but the words in rem are nothing to be concerned about it. The key words in this order that make it white hot are in personam, because when you see that, it means you have been hit with a personal deficiency judgment.

​The client only had a few options:

  • Pay the lender.
  • File a chapter 13 bankruptcy (he didn’t qualify for a chapter 7).
  • File a motion to vacate the judgment and try to work something out with Harris.

 
​I’ve written before about deficiency judgments and how they are extremely rare except when the bank is a small local lender or if the loan was a commercial loan (used to by an investment property).​

This does not mean that the world is ending and everyone will now have a deficiency judgment entered against them. Anyone who has a mortgage with Chase, Bank of America, Wells Fargo, US Bank, Nationstar and the rest of the herd of residential lenders has a slim chance of having a deficiency entered against them. If you have a first mortgage with Harris Bank, I would be very cautious.

​To me, this reinforces a couple of things:

  • It is almost always a good idea to try a short sale first before moving to a strategic default. Why? Because if the short sale closes, we can usually get a full release of deficiency from the lender, cutting off all liability to the lender.
  • Deficiency judgments can’t be entered unless the defendant is personally served with the summons at the start of the case. If you are served by publication, no deficiency judgment can be entered. Clients have to be aware of the implication of being personally served with the summons and proceed accordingly.
  • Filing bankruptcy is your final line of defense. If you have a high income, it is likely that you will have to pay the lender back some or all of the judgment, but if you qualify for a chapter 7, you will not have to pay anything to the lender.

 
​​Deficiency judgments in Illinois are still very rare, but they are allowed by law and lightning can strike.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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Fighting Foreclosure in Court Without an Attorney

Here are the basic steps in defending against foreclosure in court if you don’t have a lawyer.

If you want to successfully defend against a foreclosure, it is best to hire a lawyer. However, if this is not possible and you want to fight the foreclosure on your own (called representing yourself “pro se”), the way you go about it depends on whether the process is judicial or nonjudicial.

Below we provide a general guide on the steps you’ll need to take if you want to defend against foreclosure on your own.

Should You Represent Yourself in Foreclosure Defense?

If you are struggling to pay your mortgage, there are some things you can do on your own to avoid foreclosure or pursue another option. For example, you may be able to apply for a loan modification to make your payment more manageable or sell your home through a short sale with the help of a real estate agent. But fighting a foreclosure in court is not one of the procedures that lend itself to self-representation.

Good foreclosure attorneys have special skills developed over years of law school and many years of practical experience, as well as extensive knowledge about the complicated area of foreclosure law. Only an experienced foreclosure attorney will be aware of all the possible defenses in your situation and know the proper way to use them to fight a foreclosure in court.

However, if you’re going to challenge the foreclosure without an attorney here are the basics that you’ll need to know.

Understanding Foreclosure

Foreclosure is the legal process that the lender (or a subsequent owner of the loan) uses to sell a home and pay off the debt if the homeowner doesn’t make the mortgage payments.

Defending Against Judicial Foreclosure

In a judicial foreclosure, the lender files a lawsuit in state court. You will receive a foreclosure complaint, petition, or similar document, along with a summons. The summons will notify you about your rights and state how many days you have to formally respond in writing (called the answer) to the complaint, usually 20 or 30 days.

What goes in the answer. An answer, which you must file with the court and serve to the foreclosing party, should include:

  • a response to each numbered paragraph in the complaint stating whether you admit, deny, or don’t have sufficient information to respond (and therefore deny) the allegations in the paragraph (if you admit an allegation, the lender does not have to provide proof of that allegation)
  • your defenses (for example, you’re not actually behind in payments) or affirmative defenses (why the court shouldn’t let the lender foreclose), and
  • any counterclaims (your claims that the lender has violated other laws).

What happens if you don’t file an answer. If you don’t file an answer, the lender will ask the court for a default judgment (which means you automatically lose the case). If the court grants a default judgment, the lender receives a foreclosure judgment and will be able to sell your home.

What happens if you file an answer. On the other hand, if you file an answer, the lender cannot get a default judgment. The lender will then most likely file a motion for summary judgment. In a motion for summary judgment, the lender asks the court to rule in its favor without a trial or any further legal proceedings because there is no dispute as to the important facts of the case, your defense lacks merit, or does not prove wrongdoing.

Responding to the motion for summary judgment. At this point, you’ll need to file your formal written response to the motion for summary judgment or the lender will win the case. The response must contain your legal argument based on statutes and case law. (Be aware that motions for summary judgment can be difficult to beat without the help of a knowledgeable attorney.) If the court denies summary judgment, then the case will proceed.

​(Most Cases without a Knowledgeable Attorney do not make it past this step.)

Discovery. Discovery is the process where the parties ask for information and documents from each other before the trial though depositions and interrogatories, for example. During discovery, you can ask the lender to provide documents or other evidence that you need to back up your case. But you must do so within the proper time frames and in the correct format. You may have to respond to the lender’s discovery requests as well. Discovery can also lead to other motions and court hearings if you and the lender disagree about what should be provided.

Trial. At trial, you’ll have to show the court why the lender should not be allowed to foreclose (based on the defenses you have raised). This, in all likelihood, will involve questioning witnesses and presenting evidence in court. You must comply with the formal rules of evidence and court procedures.

The judge will then either:

  • order the foreclosure to go forward (and in some cases, set the sale date), or
  • dismiss the case.

Be Prepared to Do Lots of Research

Ultimately, if you decide to proceed on your own in court, prepare to devote a significant amount of time to the case since you’ll have to do quite a bit of research in order to have any chance of success.

The rules and procedures that you must follow vary in each state and sometimes in each court. Your research must cover not only foreclosure statutes and relevant court decisions, but also rules of civil procedure (the detailed rules on what should be in your complaint, how to file it, when and how to file motions), rules of evidence, and more.

State and court rules also set forth deadlines that you must meet, which means you may have to complete your research (on possible defenses, for example) and learn how to properly lay them out in your answer or other court documents in a fairly short period of time.

Why Use DPS Network

Distressed Property Solutions Network is a group of professionals that have become consumer advocates throughout the foreclosure crisis. We were blessed to become a part of a growing movement that is doing what is right for property owners. We have included every kind of professional from attorneys, accountants, tax advisers, realtors, mortgage auditors, and credit repair specialists into our Network. So we could truly be working for the people, not the benefit of the lenders.​

There are very few attorneys around the country that have been retrained, researched and became true foreclosure defense attorneys. We were fortunate enough to find and select a prime few that can assist property owners facing foreclosure

​Call for a Pro Bono in depth review of your situation. The network’s partners are available to you on the first call ready to work with you immediately.
Local: (847) 543-0202
Toll free: (800) 859-1255

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What Can I Do If My Loan Modification Is Denied?

Your Loan Mod Was Denied…and Yelling Won’t Help If your loan modification has been denied. Be assured: you’re not the first person to experience denial, and you certainly won’t be the last.

Loan modifications may be one of the hardest things to get approved without an experienced Negotiators assistance. After denial, your next step depends on the reason why you were denied and where your home is in the foreclosure process.

If you don’t know the reason already, then call your lender and ask their representative to explain why you were denied. Most of the time, the lenders’ notes are incomplete and don’t give a concise explanation of the situation, and will require a higher-up to explain the situation better. Some denials are easier to remedy than others.

You can Re-submit

Re-submission may be your best option if your loan modification has been denied for one of the following reasons:

  • Insufficient or missing documentation
  • You fell behind on updating your paperwork with your lender every month
  • You didn’t resubmit documents that were “lost” by your lender
  • Missing signatures
  • Missing loan numbers
  • Incorrectly verified income
  • Incorrect NPV (net present value)

​If you fall into one of these categories, then information will need to be gathered and updated prior to resubmitting for a loan modification.

​Your Loan Mod Was Denied…Now What?

Was Your Ratio Correct?
If you believe you were eligible for a loan modification, but didn’t know your DTI (debt to income ratio) or NPV and the optimal way to structure these ratios for your lender, then you were setting yourself up for failure from the get-go. If you’re unsure about how to structure these figures, then it’s best for you to hand your loan modification over to a negotiator who can handle the process for you. An experienced loan modification representative can help you restructure the way your financial situation is presented to give you your best chance at a great loan modification.

​Not All loan Modifications are Equal – Go In-House

If you have been denied for a modification because you’re simply ineligible, then it’s time to apply for an in-house modification. Many major lenders offer in-house loan modification programs that allow borrowers to modify their loans. Every lender has their own guidelines for in-house modifications, and you will need to present a loan modification package that is structured toward these guidelines.

​Consider Your Other Alternatives to Modification

SHORT SALE

If your lender determines that you wouldn’t be able to afford your loan regardless of what kind of modification you would get, then it’s time for you to consider another option. There are other options that will allow you to sell your home instead of going through foreclosure.

​If your home is worth less than what you owe, then short sale may be your best option. In a short sale, the bank will agree to release you from your mortgage in exchange for the money made from selling the house. Short sale is not automatic or mandated, though- it requires negotiation and approval from a mortgage lender first. Be warned: a lender is still free to pursue a deficiency judgment after short sale; however it is advisable to have an experienced short sale negotiator handle your sale. So they can negotiate a waiver of deficiency judgment during the short sale process for you and thus avoid this pitfall.

​Another option is a deed-in-lieu of foreclosure. With this option, you agree to give up the deed to your property, and the bank agrees to release you from your mortgage debt in exchange for the money they’ll make from selling the house. This option can only be pursued if your home has been on the market for 3 months. As with a loan modification or short sale, a homeowner must complete an approval process before this can be used as an option. Take heed: just as with a short sale, a lender can pursue a deficiency judgment after a deed-in-lieu, which is why it is advisable to have an experienced negotiator handle your Deed in Lieu. So they can negotiate a waiver of deficiency judgment during the process for you.​

What’s the Best Thing to Do If Your Loan Modification Is Denied?

If your loan modification has been denied, then your overall best option is to consult with an experienced representative before taking any other step to understand what your options are. There are a select group of professionals at Distressed Property Solutions Network that combine foreclosure defense, loan modification services and shortsale experience and their insight will be invaluable in helping you choose the right direction and best of all the consultation is given to you at NO Cost.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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Understanding the Short Sale Process (Part 2 of 2)

A short sale is the sale of a property for less than what the owner still owes on the mortgage. A short sale is an alternative to foreclosure when a homeowner needs to sell and can no longer afford to make their mortgage payments. There is no guarantee that a short sale will work.

Once you fall behind on your loan, the lender can proceed to foreclosure if they choose to. But typically, lenders prefer not to foreclose and, if effectively presented with smart alternatives, they will often agree to a short sale rather than foreclose. If a short sale is attempted but doesn’t work, your house will likely go to foreclosure.

I Have More Than One Mortgage On My House. Can I Still Do A Short Sale?

Yes. Each mortgage can be negotiated individually. However, multiple mortgages make a short sale more complicated and time-consuming. Not only do you need the cooperation of the first lender, the second mortgage holder needs to agree to a short sale as well.

What Is A Release?

A lender may offer to “release” its security interest against the property in exchange for less than the total amount of the note. A release will allow the property to be sold without paying off the obligations of the note. However, the note is not satisfied. The advantage of a release is it allows the property to be sold and helps you avoid a foreclosure.

The disadvantage is the remaining debt on the property (sometimes called a deficiency) still exists. You are still liable for the note. In other words, you still owe the money. In reality, it’s not likely that the lender will pursue the deficiency unless you have other significant assets.

Furthermore, if you don’t attempt a short sale and the property goes to foreclosure, you can be liable for the full amount of remaining debt on any additional mortgages beyond your first mortgage.

What Is A Satisfaction?

A lender may agree to accept less than it is owed as complete and total satisfaction of the debt and release its lien against the property. Your note and obligation to the lender are satisfied for less than you owe. When the property is sold, the debt is paid off completely. Sometimes short sale negotiations are successful in obtaining complete satisfaction. Sometimes all that can be obtained is a release.

Are There Tax Consequences?

When a lender cancels, or forgives, your debt, the tax laws may consider the forgiven debt as taxable income. If a lender agrees to a satisfaction, the Mortgage Forgiveness Debt Relief Act of 2007 provides that debt forgiveness of up to $2 million is not considered taxable income if:

The house has been used as your principal place of residence for at least two of the previous five years.
The debt has been used to buy, build, or make substantial improvements to the home.

Home equity loans where the money was not used to buy, build, or improve the home do not qualify for the exclusion. Neither do mortgages for second homes or rental properties. The law has been extended to include debt forgiven through 2013.

There are additional tax considerations to keep in mind. A debt cancellation will affect your property’s cost basis. Insolvency or bankruptcy may also alleviate some of the tax burdens of a debt cancellation resulting from a short sale. You should always confirm tax matters with your tax professional.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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Understanding the Short Sale Process (Part 1 of 2)

A short sale is the sale of a property for less than what the owner still owes on the mortgage. A short sale is an alternative to foreclosure when a homeowner needs to sell and can no longer afford to make their mortgage payments.

The lender agrees to accept less than the amount owed to pay off a loan now rather than taking the property back by foreclosure and trying to sell it later. Lenders agree to a short sale because they believe it will net them more money than going forward with a lengthy and costly foreclosure process.

Can Any Real Estate Agent Effectively Handle My Short Sale?

No. A short sale is a very complicated real estate transaction and one that has very important implications for you. More than any other type of residential real estate transaction, a short sale should be handled only by a real estate broker who has substantial experience with the short sale process , and a strong track-record of success in negotiating short sales for their clients. You wouldn’t have your family doctor perform heart surgery. And, you shouldn’t expect any real estate broker to be qualified to handle this highly complex real estate transaction for you.

Why Should I Choose A Short Sale Over Foreclosure?

Whether you should do a short sale or let your property go to foreclosure depends on several factors. In most instances, a short sale makes more sense than foreclosure. In general, when you want to obtain a loan to purchase a property in the future, more opportunities will be available to you if you do a short sale. And, contrary to popular belief, you can be current on your payments and still do a short sale. In fact, if you are current on your mortgage through a short sale, you can qualify for an FHA loan afterwards without any waiting periods. The same option will not be available following a foreclosure.

While doing a short sale will negatively affect your credit, there are many benefits to choosing a short sale over foreclosure. With a short sale, you are in control of the sale, not the bank. You may sleep better at night knowing who is buying your home, and you can spare yourself the social stigma of foreclosure.

Every homeowner’s situation is different, so we always recommend that you speak with a real estate attorney that can advise you on the legal and tax implications for your circumstances.

Will I Get Any Money From The Sale?

Unless specifically authorized through a federally-sanctioned program such as HAFA, when a lender approves a short sale, they typically require that the borrower (seller) not receive any money from the sale of the property since the lender is going to take a loss on the loan.

Can I Keep The House Through A Short Sale?

The purpose of a short sale is to get the property sold, so you do not keep the house. Just as in a normal sale, you will be moving, typically when the sale closes. Some sellers choose to move before the house closes. You will not be allowed to remain in the house. If your intention is to remain in your house, you should consider other options besides a short sale.

READ PART 2.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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Five Factors That Affect Your Credit Score

Your credit score is a powerful number that affects your daily life in ways you might not have even imagined. More and more businesses are starting to use your credit score to make decisions about you.

Your score is used to set your interest rates on credit cards and loans, even to decide whether you get approved for those credit cards and loans. Car insurance companies use your credit score to set your rate. Utility companies check your credit score before establishing new service in your name. Even some employers check credit history on which your credit score is based (but not your actual credit score) to decide whether to give a job, a raise, or promotion.​

Read on to learn more about the five key factors that influence your credit score.

​Your Payment History Affects Your Credit Score​

Payment history is 35% of your credit score. How timely you pay your bills affects your credit score more than any other factor. Serious payment issues, like charge-off, collection, bankruptcy, repossession, and foreclosure can devastate your credit score, making it almost impossible to get approved for anything that requires good credit.

The best thing you can do for your credit score is to make your payments on time each month.

​Your Level of Debt Affects Your Credit Score

Level of debt is 30% of your credit score. Credit scoring calculations, like the FICO score, look at a few key factors related to your debt: the amount of debt you have overall, the ratio of your credit card balances to your credit limit (also called credit utilization), and the relation of your loan balances to the original loan amount.

Having high balances or too much debt can affect your credit score. The good thing is that your credit score can improve in this area if you pay down your balances.

Your Age of Credit History Affects Your Credit Score​

Age of credit is 15% of your credit score and considers both the age of your oldest account and the average age of all your accounts. Having an “older” credit age is better for your credit score because it shows that you have a lot of experience handling credit. Opening new accounts can lower your average credit age. For that reason, it’s typically not a good idea to open several new accounts at once.

Types of Credit You Have Affects Your Credit Score​

There are two basic types of credit accounts: revolving accounts and installment loans. Having both types of accounts on your credit report is better for your credit score because it indicates you have experience managing various types of credit. Types of credit is only 10% of your credit score, so not having a certain type of credit, e.g. an installment loan, won’t devastate your credit score.

Credit Inquiries Affect Your Credit Score​

Each time you make an application that requires a credit check, an inquiry is placed on your credit report showing that you’ve made a credit-based application. Inquiries is 10% of your credit score. One or two inquiries won’t hurt terribly, but several inquiries, especially within a short period of time can cost tens of points. Keep your applications to a minimum to preserve your credit score.

The good news here is that only inquiries made within the last 12 months are factored into your credit score. Inquiries fall off your credit report after 24 months.

Note that checking your own credit report results in a “soft” inquiry and does not affect your credit score.

Some factors are commonly mistaken as things that influence credit scores, but they actually do not – not directly at least. Certain information like income, bank balances, and employment status can influence your ability to get approved, but they do not factor into your credit score. Age, marital status, and debit/prepaid card usage also do not influence your credit score.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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Should I do a Short Sale or a Loan Modification?

This very question is on the mind of millions of American’s as we speak. Short Sales and Loan Modifications are two terms that were previously unheard of for most, yet they are now everyday words.

Distressed home-owners should picture life without the burden of a mortgage debt that is all-consuming and overwhelming. Visualizing a life where there is no fear of answering the phone or checking the mail-box is a critical step in preparing to regain control of their financial life.

Having said that, there are three solutions for homeowners who may be behind on their mortgage:

  • Get the loan current and keep it current (Loan Modification)
  • Short Sale
  • Foreclosure

 
For the sake of this article, we are going to throw away the foreclosure option as it is never the best answer.

That leaves us with Short Sales and Loan Modifications.

A loan modification occurs when a lender agrees to change one or more parts of the loan terms in order to make the loan more affordable to the borrower (while still being able to repay the lender). The loan modification is best suited for borrowers who are behind on their mortgage but have a definitive plan for repaying their debts. Generally speaking, loan modification candidates have had a specific incident or occurrence that has caused them to fall behind and is curable. The curability of the problem is significant. Without it, the lender will be unlikely to agree to new terms.

On the other hand, Short Sales are more appropriate for borrowers that have little hope of being able to afford their mortgage, and those who have no desire to keep their homes. For homeowners experiencing hardship, this may happen due to a long term job loss, extended illness, payment increase or mortgage adjustment, divorce, relocation, death of a partner (Read more about Understanding a Short sale HERE). A bank is more likely to agree to a short sale if the borrower can demonstrate a verifiable hardship.

The lender also wants to see an effort for the property to be sold for the most amount of money possible. Lenders like to see the property listed with a reputable Realtor who is a specializes in short sales, these agents are highly trained best suited to assist you in your efforts as they know the short sale process inside and out and will do everything possible to cure the problem.

Make Sure Your Realtor Is a Short Sale Specialist

Short Sales made up over 40% of all home sales last year. In light of this fact many real estate agents have rushed out to take one or more short sale educational courses and upon completing these courses immediately begin promoting themselves as short sale specialists. What these agents fail to realize is that these transactions are highly complex and require a very specific knowledge and skill set which cannot be acquired through an educational course.

We at Distressed Property Solutions Network have been actively involved with short sales for over 10 years now and in this time have assisted countless homeowners in avoiding foreclosure using our Trademarked “Lock Squared” Program. (Read more about Lock Squared here). Our rate of success is more than triple the national average and this in part has lead to our recognition as the premier short sale specialty group in Chicago and the surrounding collar counties.

Short Sale or Loan Modification

These are unprecedented times in our country’s economic history. Unfortunately, foreclosure and financial distress is reaching into the lives of millions of American homeowners. If you or anyone you know is experiencing hardship we want to let you know we are here to help, and are happy to assist you in discussing your options and determining which solution is best for you. All consultations are at NO cost and completely confidential.

If you’re having trouble deciding whether your property qualifies for a short sale or you want to stay in your home and request a mortgage modification, give us a call.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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4 Dirty Tricks Mortgage Lenders Use To Foreclose On Your Home

Dealing with your lender on your own when you’re behind on your mortgage payments is like going to war against an opponent who has nuclear weapons and all you’ve got is a rusty pocket knife. Things aren’t likely to go well for you.

Why is that? Your lender has a lot of resources, including loads of money and experienced attorneys working for them. But beyond that, some mortgage lenders and servicers have repeatedly shown a willingness to bend or break rules, laws, and standards of ethics in order to foreclose.

It’s been called mortgage abuse, and involves all kinds of dirty tricks to make taking your home as easy, and as profitable, as possible.

Here are a few examples of the shady, and sometimes illegal, tactics that have been used:

Servicer-Driven Defaults

A servicer-driven default is where a mortgage servicer tells a homeowner to stop making payments to become eligible for mortgage assistance, but when they do, they start foreclosure. How helpful of them.

It is true that some assistance is only available to homeowners who have already defaulted on their mortgage, but it’s illegal for your lender to tell you to stop paying your mortgage. And you may not even need to be in default to be eligible for assistance, such as a loan modification.

If anyone tells you to stop paying your mortgage, whether they’re your servicer, an attorney, or a friend, you need to be aware that they may not know what they’re talking about. They could be trying to help, but be ignorant, or they could have bad intentions.

​Defaulting on your mortgage payments when you have the ability to pay is a very serious decision that you should make only if you know what you’re doing, what the consequences are, and when you have a specific objective to achieve.

​Dual Tracking

Dual-tracking is when your servicer considers you for a loan modification while pursuing foreclosure at the same time. The practice is restricted by the Consumer Financial Protection Bureau.

Their rules state that foreclosure cannot be started until you’re at least 120 days delinquent, and that foreclosure can’t move forward when you have a complete loan modification application under review.

A homeowner can be under the impression that they are about to get a loan modification, then be shocked to find out that that they’re being foreclosed on. That’s a big deal because your ability to fight foreclosure effectively depends on understanding where you are in the process.

Some mortgage servicers have sent notices of intent to foreclose to borrowers already approved for a trial loan modification, leading the borrower to believe that the trial mod had been abandoned.

Backdating

Your servicer is required to send you a letter telling you why you were denied a loan modification and to give you 30 days to appeal the denial. In 2014 Ocwen was accused of backdating thousands of those letters, which left the borrowers no time to appeal.

Loan modifications applications are frequently denied and appealed before eventually being approved. A borrower needs to all the time they can get to fix what’s wrong with their application and appeal.

Backdating takes that ability away from you. Make sure to check the date on your denial letter to make sure your lender isn’t backdating and denying you the time to appeal.

​Using Fraudulent Documents/Robosigning

Many lenders found that they didn’t have the documents they needed to foreclose on delinquent homeowners, so they created mortgage assignments and other documents out of thin air. They had people with no knowledge of mortgages sign lost note affidavits. It’s fraud, and it’s illegal. If your lender has submitted fabricated documents to the court to foreclose on you, you may be able to use that as a defense against foreclosure.

These are just some of the dirty tricks lenders have been known to use to make it easier, more profitable, and more expeditious to foreclose on homeowners. But there are others, such as force-placed insurance, and even homeowners who haven’t missed a payment being put into default. Sometimes these things can be honest mistakes. Sometimes they seem a little too convenient since they always end up costing you money and benefiting the bank.
Now that you know about some common tricks, you can recognize when they happen to you, and maybe even avoid becoming a victim of them.

However, just because you recognize this kind of behavior doesn’t automatically mean you’ll be able to do anything about it. That’s why it’s so important to have someone with relevant knowledge and experience to advise you and take the best actions on your behalf.

Unless you’re an expert on foreclosures and loan modifications, you should consider working with Distressed Property Solutions Network to help you spot these tricks and assert your rights to the fullest. It could be the difference between keeping your home with a more affordable monthly payment and losing it to foreclosure.

Distressed Properties Solutions Network

The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.

We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.

Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.

The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.

Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.

Local: (847) 543-0202
Toll free: (800) 859-1255

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