There are many options available for homeowners in foreclosure that enable them to keep their home, if it makes economical sense. For others, they may not qualify or the burden is just too great for them to manage. We can immediately take over the burden, so the homeowner can move on with their lives and establish a new beginning.

A recent case for example: A homeowner in Nassau County was in a severe negative equity position. He owed more than $900,000.00 on his home with an additional $88,000.00 in consumer debt. In 2008, his employer reduced his salary and eliminated his housing allowance in response to drastic changes in the economy, while the value of his home deflated.

With his salary cut in half he was far from qualifying for a loan modification, and especially not a refinance having already owed more than his home was worth. With excessive credit card balances, we immediately setup a consultation with a bankruptcy attorney. At the time, his foreclosure action had recently commenced.

Based on his particular circumstance, it was important to file a chapter 7 bankruptcy to liquidate his unsecured debt of $88,000.00 before selling his house. He would not have qualified for the bankruptcy liquidation after selling his house, because he made enough to pay his credit cards- but not enough to pay both his credit cards and his house at the same time.

Had he not filed a chapter 7 bankruptcy before selling his house, he never would have qualified for the liquidation of his unsecured debt. He would have been a slave to excessive interest for the remainder of his life (all things being equal or held constant). Instead, his monthly debt (housing & credit card) was now reduced by 25 percent.

The next step was to sell the house to relieve him of a $7,182.00 per month housing expense and avoid a foreclosure auction. This required a short sale settlement sufficient to sell the house at fair market value. We secured a contract at $495,000.00, requiring a mortgage settlement of nearly 50 percent off the outstanding balances, which at that time grew to approximately $921,000.00

We were successful in negotiating his outstanding balance to a $475,000.00 settlement, equivalent to 52 percent less than what was owed. Now this homeowner and his family reside in a new house they are renting for $2,600.00 per month. This reduces his monthly debt (housing & credit cards) by 73 percent!

BEFORE WORKING WITH US:
 Housing Expense..... $7,182.00 per month
 Credit Cards............. $2,480.00 per month
 TOTAL...................... $9,662.00 per month

AFTER WORKING WITH US:
 Housing Expense..... $2,600.00 per month
 Credit Cards............. $       0.00 per month
 TOTAL...................... $2,600.00 per month     (Monthly Savings of:  $7,062.00)

THE SELLER BENEFITS BY:
  √   Getting CASH in their pocket (approximately 3 months rent)
  √   Relief from the burden of having to deal with the matter
  √   Reduction of debt via short sale payoff & liquidation
  √   Avoidance of a potentially embarrassing sheriff's auction & eviction
  √   Living in the home rent free for a year and a half
  √   Establishing a clean slate, instead of further deterioration of credit

TIME FRAME:
The seller benefited by remaining in his home rent free for 18 months form our initial consultation, while we worked diligently to help establish a new beginning. When we first met, he was overwhelmed with the burden and really did not understand how he could possibly navigate his way out of what appeared to be a catastrophe. Instead, he was quickly relieved of the burden and capable of focusing on new possibilities.