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Getting to the Core of Foreclosure

Know Your Options

RICARDO A. RIVERA

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electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without
written permission from the author, except for the inclusion of brief quotations in a review. Any unauthorized use, sharing,
reproduction, or distribution is prohibited. While attempts have been made to verify information provided in this publication,
neither the author nor the publisher assumes any responsibility for errors, omissions or contradictory information contained in
this document. This document is not intended as legal, investment or accounting advice. The purchaser or reader of this
document assumes all responsibility for the use of these materials and information. Bluegate Management Co. assumes no
responsibility or liability whatsoever on behalf of any user of these materials.

2015 All rights reserved.


Introduction
Foreclosure can be a scary situation for any homeowner to encounter. No matter the circumstances or financial
hardships that brought you to this point, the risk of losing your home is very real and can be enough to make you
panic.

Thats why I want you to read this; so you learn what options are available to you and you can take a deep breath.

At a time like this, it is very important that you understand exactly what is happening and what you can do to help
yourself in this situation. You have to understand that you have options. The more you can help educate yourself, the
sooner you can begin to take action and regain some control of your situation.

Thats why youre here.

The purpose of this resource is to empower anyone who is facing foreclosure, whether thats you or someone you
know. My goal is to instruct, guide, and assist homeowners facing foreclosure about reasonable options and suitable
responses after receiving a Notice of Default or a Lis Pendens (foreclosure claim). Then, Ill explain when, how, and
why you should present a particular response to one of these claims and choose one course of action over another.
Youll learn more about foreclosure and some related issues. Im going to demystify the legal processes, cut through
some of the fancy language, discuss alternative and contesting options, examine some realistic outcomes, and also
caution you about foreclosure rescue scams.

Once youve finished reading this, you will be better able to confront foreclosure and foreclosure issues rationally,
with the comfort of being well prepared.

2
Understanding Foreclosure
Before we start talking about your foreclosure options, we need to understand exactly what the term foreclosure
means. Wikipedia defines foreclosure as, a legal process in which a lender attempts to recover the balance of a loan
from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the
collateral for the loan.1 Foreclosure is to shut out; to bar; to destroy an equity of redemption, according to Blacks
Law Dictionary.2

Basically, youve stopped making your agreed-upon mortgage payments to your lender, usually a bank or mortgage
company. At this point the reasons why payments stopped dont matter; at the core is the fact that money is no
longer being applied to the loan payment.

Foreclosure is a process where the lender/bank tries to terminate all rights of the homeowner (called a mortgagor) in
the property used as collateral on a loan. To simplify it even further, when a homeowner is no longer able to pay their
mortgage (for any number of reasons) and the loan has gone into default, the bank is going to take back the property
to try and prevent further losses to their bottom line.

Foreclosure is scary because of two things that happen. The first is when a lender informs a homeowner to prepare to
lose their home, the biggest and most important investment in the life of the homeowner. The second involves the
absolutely foreign and undecipherable foreclosure language, often never learned or taught in school.

Nevertheless, foreclosure is not a two-headed monster or an alien creature. Learning and understanding the
processes of foreclosure will help you remove your fears and uncertainty and introduce more security and pre-
dictability, which will lead to greater peace of mind.

How Does a Foreclosure Begin?


A foreclosure does not just appear out of thin air. In most cases there will be indicators that a foreclosure might be
coming. The signs can appear before you even begin missing your mortgage payments. You may find yourself maxing
out any credit cards you have or juggling credit card payments. Other bills and utilities may be delinquent or even
threatening shut-off. Perhaps you have to choose which bills to pay each month. Or youre no longer able to keep up
with maintenance on your home.

Most homeowners who stop making payments on their mortgage have suffered some sort of financial hardship
death in the family, loss of a job, divorce, etc. Foreclosure as a process begins when a homeowner fails to pay a
monthly mortgage payment for several consecutive months; lets consider this the first step.

Because of missing scheduled payments, lenders will, most often, take action. They will send the homeowner a
Notice of Default letter in the mail, which is the second step in the foreclosure process.

Once the lender mails the homeowner the Notice of Default, they have formally started the non-judicial foreclosure
process. Well talk more about judicial and non-judicial foreclosure in a moment. For our purposes, lets call this step
three in the process. The failure of the homeowner to become current on their mortgage payments, step four,
becomes the last requirement lenders generally consider before starting the formal judicial foreclosure process.

1
http://en.wikipedia.org/wiki/Foreclosure
2
Abridged 6th edition, 7th reprint, 1997

3
Homeowner
Homeowner Lender Lender
fails to
fails to mails initiates
become
make Notice of non-judicial
current on
mortgage Default to foreclosure
mortgage
payments homeowner process
payments

Non-judicial foreclosures are completed in a significantly faster and much more simple manner than judicial
foreclosures, giving homeowners little time to actually stop the sale of their homes. So, if a homeowner does not
become current on mortgage payments soon after receiving the Notice of Default, lenders can proceed to place the
property up for sale and evict the homeowner, depending on each particular state law and mortgage documents.

But dont panic just because your lender wants payment of the mortgage and youre not able to make those
payments. Heres something you may not realize: lenders never want to take control of your house!

When you fail to make a mortgage payment, lenders will generally call you on the telephone to find out your
circumstances, evaluate your short and mid-range financial strength and come up with a plan and method to quickly
get you back on track to making your monthly mortgage payment. So while you may feel like the lender/bank is the
enemy in this situation, they will, first and foremost, try and work with you to get you caught up on your payments
and set a plan moving forward.

Unfortunately, that isnt always a realistic option due to your specific financial hardship.

Prepare to Face the Foreclosure


To face a foreclosure process confidently and intelligently, a homeowner has to accurately and realistically assess his or
her financial condition and capacity to meet future financial obligations. A homeowner has to acquire a basic
understanding of legal processes and lending programs. Most importantly, the homeowner has to be willing to invest
time and effort in finding a suitable and realistic way to reinstate and resume making regular monthly payments on
the mortgage. Are you willing to do the required work in an attempt to save your house?

If youre not, then read no further. If you are, then lets go on.

4
Legal Aspects of Foreclosure
Judicial vs. Non-judicial States for Foreclosure
One thing to address before we get into specifics is understanding the difference between judicial and non-judicial
states when it comes to foreclosure. Youll see these terms throughout the book, so it is important that you know
what they actually mean.

Judicial foreclosure is available in every state (and required in many), involves the sale of the mortgaged property
under the supervision of a court, with the proceeds of the sale being divided as follows: first to satisfy all the
administrative and legal expenses incurred in causing the auctioning and sale of your property; next, to satisfy the
mortgage; then they will satisfy other lien holders; and finally, the mortgagor/borrower if any proceeds are left. Under
this system, the lender initiates foreclosure by filing a lawsuit against the borrower. As with all other legal actions, all
parties must be notified of the foreclosure, but notification requirements vary significantly from state to state. A
judicial decision is announced after the exchange of pleadings at a (usually short) hearing in a state or local court. In
some rather rare instances, foreclosures are filed in federal courts.

On the other hand, non-judicial foreclosure is authorized by many states if a power of sale clause is included in the
mortgage or if a deed of trust with such a clause was used, instead of an actual mortgage. In some states,
like California, nearly all so-called mortgages are actually deeds of trust. This process involves the sale of the
property by the mortgage holder without court supervision. An actual lawsuit is not filed in court and the process is
done without court supervision. This non-judicial foreclosure process is generally much faster and cheaper than
foreclosure by judicial sale. [But] as in [a] judicial sale, administrative and legal costs, the mortgage holder, and
other lien holders are respectively claimants to the proceeds from the sale.3

So really, the difference between a judicial foreclosure and a non-judicial foreclosure is whether or not the courts are
involved. That makes it easy to keep them straight judicial involves a lawsuit and the court system, non-judicial
does not.

Substantive vs. Procedural Rights


The concepts of substantive and procedural rights are a classic part of our legal system, and are intricately inter-
twined. They sound complicated, so lets break them down to make it easier to understand them.

Substantive rights involve constitutional mandates, statutory and common law doctrines describing and defining
particular rights and responsibilities the law imposes upon people and institutions. Procedural involves the manner
and methods the legal system follows to ensure the rights and responsibilities are properly allocated and granted to
and exacted, respectively, from those same individuals and institutions.

As someone who is facing foreclosure or any other legal claim, you may think of the two concepts as follows:

Substantive What rights and responsibilities the law imposes and bestows on me.
Procedural What manner and methods the judicial system uses to ensure I am given all my rights, while
exacting all responsibilities due from me.

Since Bluegate Management Co.is based in Florida, lets focus for a moment on what happens in the foreclosure
process in this state (Florida also happens to be one of the states, right now, with the highest number of
foreclosures).

Florida is a judicial state, meaning the foreclosure process has to go through the courts. Accordingly, lenders are
required to ask the courts to destroy any claim of equity of redemption and to terminate all rights you as a

3
https://en.wikipedia.org/wiki/Foreclosure

5
homeowner may have or claim to have in the property (generally by a judicial sale of the property) serving as
collateral on your mortgage loan. They are basically asking that you no longer have ownership rights to your house.

Foreclosure, like any other area of law, has its unique characteristics and particular elements, which every lawsuit
must follow and is bound to observe. You can significantly increase the odds of keeping your house by learning those
elements and characteristics relevant to the foreclosure claim.

6
The Foreclosure Process
You Received a Foreclosure Notice Now What?
That day has come when you get your mail and there it is, a foreclosure notice from your lender. Your initial reaction
might be anger or panic. But, like we said in the beginning, it doesnt have to be. This is the time to take a deep
breath and remember that you have alternatives.

Know the terminology, understand the language, the timeframe, and what will happen at each step, and youll be able
to develop a plan to get yourself out of the situation one way or another.

The very first step you can take to saving your house from foreclosure is being willing to work with your lender on
a solution, and being diligent about that willingness. This way, youre making the effort and proving that youre
going to try and make good on the mortgage.

Understanding the legal foreclosure process is the second most essential step into attempting to save your house.
By understanding the general legal process, you will greatly increase the likelihood of reaching a desired outcome
and successfully resolving the foreclosure claim against you. Weve already talked about some concepts you need to
know.

For homeowners in Florida, foreclosure begins when you receive a copy of the Lis Pendens (or it could be a Claim for
or Notice of Foreclosure, depending on your state). In non-judicial states, the foreclosure process begins when the
lender issues a Notice of Sale.

A homeowner who has received a Lis Pendens (or other type of notification) from the lender should take action
immediately to maintain all judicial procedural rights and to find a most favorable, desired, intelligent outcome.

The Lis Pendens essentially serves two functions: first, the lender will ask the court to grant it all rights and control
over the property to ensure payment on the mortgage, and second, it notifies the homeowner to make arrangements
to bring payments current on the mortgage and/or answer to or defend the claim that the lender presented to the
court.

Time Is of the Essence: Act to Save Your Home


Lets take a general look at what the timeline for a foreclosure looks like:4

Day 1: It's the first of the month, and the mortgage payment is due. The borrower misses the payment.
Day 16 to day 30: A late charge is assessed on payment. The company that processes the borrower's
payments (called the mortgage servicer) starts attempting to make contact to find out what happened.
Day 45 to day 60: The servicer sends a "demand" or "breach" letter to the borrower pointing out that terms of
the mortgage have been violated. The borrower is given 30 days to resolve the situation by paying the
delinquent amount.
Day 90 to day 105: The servicer refers the loan to its foreclosure department and hires a local attorney or
other firm to initiate foreclosure proceedings. Depending on the state where the home is located, the
servicer's representative may record a formal notice of foreclosure at the local courthouse, publish details of
the debt in the local newspaper, attend hearings on the case and make appropriate court filings.
Day 150 to day 415: The house is sold at a foreclosure sale or auction.5 The long time span is due to different
state requirements. Borrowers in states with judicial foreclosures, or those in which lenders have to retake

4
http://www.bankrate.com/finance/mortgages/foreclosures-at-a-glance.aspx

7
property titles via the court system, can get almost a year to straighten out their affairs before the sale.
Those in non-judicial states have as little as two months.
Day 150 to day 415+: After the sale, some states grant borrowers a "redemption period" in which they can
still repurchase the property if they have the money. Others force the (now former) homeowners out of the
house immediately following the auction.

Now that you have a basic sense of the overall process, lets get back to some specifics.

Procedural Law (remember, the doctrine on manner and methods the law follows to ensure preservation of rights
and exacting responsibilities to and from individuals and institutions) establishes specific rules and requirements.
Every single legal claim will follow the procedural rules pertinent to each case. This element is very important
because it involves specific methods to follow and complete when prosecuting a claim. It imposes strict date
deadlines, and burdens claimants to show relationships, obligations, and/or other elements, essential or absolutely
necessary to prove or disprove a claim a person or institution presents before the court.

Florida procedural law demands the lender to serve (a legal term meaning the lender has provided or caused you to
receive a copy of the Lis Pendens) the homeowner, and all defendants to the foreclosure lawsuit, within 120 days
after the filing of the initial Lis Pendens.

In turn you, the homeowner, must file your answer to the foreclosure claim (Lis Pendens) that the lender filed before
the court within 20 days from the date you first received the Lis Pendens. Note that mandated mediation is no
longer required.6

5
These are part of the administrative and legal costs mentioned earlier, in the Judicial v. Non-judicial Foreclosure section.
Generally, it includes commissions, fees, or payments for services to the auctioneer, local sheriff, listing agent, newspaper
publication, and any other entity involved in the advertising, selling, and eviction of owner of the property.
6
http://www.nolo.com/legal-encyclopedia/floridas-foreclosure-mediation-program.html

8
What Should a Homeowner Do or Not Do?
As a homeowner, you should never ignore or dismiss the Lis Pendens (or other type of foreclosure claim). This is one
of the worst things you can do, as ignoring the problem wont make it go away.

If you choose to not take action and let the foreclosure happen, not only will your credit rating suffer a huge hit, but
you will find it very difficult to do things like get a loan, buy a new home, maybe even rent an apartment or find a
good job. A poor credit score might even result in an increase on your car insurance rates. Why take that risk when
there are things you can do to help yourself?7

Instead, you should make yourself aware of all important dates, items and/or actions, deadlines, and elements of the
legal process. Give yourself the advantage by doing your homework and any research necessary to understand exactly
what is happening with your case. This will help give you more control of the foreclosure suit the lender initiated
against you before the court (again, in the situation of a judicial state).

Learn the basic, essential steps of the legal processes, know who your lender is, and who are the attorney and bank
employees working and deciding the terms and processes relevant to your mortgage loan. Find out their names and
the roles they play what is their responsibility?

Find and gather up all your loan documents if they are not already in one location or folder. Become fully
knowledgeable of the type of loan you have, what are the terms of the loan, and any other specific requirements
and/or special characteristics your mortgage contract entails. Learn and know the individuals who represent your
lender and what decision making power that individual has to reach an agreement with you. When a person does not
have any decision making power, any agreements are subject to anothers approval, striping you of an opportunity to
conclusively close on a positive or beneficial option or accord for you the less authority the person you are talking
to has, the greater amount of time and effort it will take you to reach an agreement. Have their contact information
readily available.

Lastly, learn about any other financing alternatives via federal and state housing aid, foreclosure assistance, and/or
trusted and reputable credit aid organizations or agencies. Always ask and shop for other opportunities.

Arming yourself with this knowledge will help you as youre navigating the foreclosure process. Youll be asked to
provide information and youll need to ask questions, and having all the documents and information you need right at
your fingertips will greatly help that process along.

To Be or Not To Be Litigious
Now that youve gathered all your paperwork and learned some of the key pieces of information about your loan and
the foreclosure claim against you, its time to consider your options for moving ahead in the process and accessing
help.

Below are some options of where you can turn for help. These are not in any order, but they do highlight different
levels of expertise. Youll see, after reading through them, that you can actually focus on a combination of options to
help achieve the most optimal outcome.

Hire An Attorney
Do you know how to repair the engine of your car? Maybe you are comfortable simply changing the oil then getting
professional help for more technical and detailed tasks. But, if you really want to know how to repair a car engine,
you can research, study, learn, and practice how to do it.

7
http://www.bankrate.com/finance/mortgages/8-do-s-and-don-ts-for-fighting-foreclosure-1.aspx

9
This same principle applies to knowing when and how to effectively and properly answer the Lis Pendens the lender
filed against you (and when to file the answer). Equally important is whether you should include any, or can you
present any affirmative defenses? If you do not present any affirmative defenses, do you waive them and then not
present them at a later time? Those are the types of things best left to a professional.

I am not claiming here that you can only defend against the foreclosure claim if you hire an attorney. Certainly, an
attorney will be able to help you through the entire process and possibly handle much of it on your behalf. But, if you
really want to know how to answer the Lis Pendens, you can research, study, and learn basic legal processes and
requirements so that perhaps you can do certain things yourself. Then, for more technical and specialized
knowledge, you may need to seek professional legal advice.

When it is advisable to hire an attorney?

To ensure the lender properly filed the lawsuit against you (checking that it was done properly).
To ensure the lender meets all legal requirements that entitled it to foreclose against you.
If you can claim affirmative defenses (accounting or extra fee disputes on payments i.e.: charging for
insurance while you carried your own policy, disputes on terms of the mortgage, etc.).
Limited consultation to weigh your options.

Professional Foreclosure Counseling


Defending a foreclosure claim is very, very stressful. You can seek unbiased, trustworthy, and professional counseling
at little or no cost to you. Federal, state, and local government agencies and judicial offices provide homeowners with
assistance and advise on options for keeping their property, considering credit and legal options, and assessing an
individuals capacity and probability to best resolve the foreclosure claim. These entities are, at the very least, solid
educational and instructional resources available to you at minimal or no cost.

Research
You will greatly benefit from knowing specific deadlines and methods the law imposes on both you and the lender.
This doesnt mean you have to attend law school and become a legal expert. But do some research to learn and
understand basic and essential elements of the legal process so that you can enhance your ability to make a better,
more accurate assessment of the foreclosure claim against you. The Internet has put all that knowledge at your
fingertips, you just have to go and find it (but as with everything on the Internet, make sure youre learning from and
seeking out reputable sources). Then you will be able to take the decision that is most profitable and suitable to your
specific interest and circumstances.

Do-It-Yourself
You should take this approach only after you have already used, to some extent, each of the options discussed above.
Then you may be able to properly answer the Lis Pendens, work with your lender on finding a way to reinstate the loan
and/or consider another way to minimize the negative credit and financial outcomes of the foreclosure.

10
Beware of Foreclosure Scams
As so often happens in situations where people are vulnerable, foreclosure rescue scams have become far too
common. In this type of scenario, a person or company will claim to come to your rescue and get you out of your
difficult situation.

It is very important that you are aware of some of the foreclosure assistance scams and do what you can to protect
yourself from becoming a victim, possibly ending up in a worse situation than when you started. Unfortunately, those
who were hit hardest by predatory lending are those hardest hit by scammers, namely certain minority and senior
populations.

But understand, anyone, anywhere can become a victim of a scam.

There are two main buckets or categories of scams:8

Advance-fee loan modification This is when a company will ask for a fee up-front (as high as $2,500) in
exchange for a guaranteed loan modification, thereby saving you from foreclosure.
Sales-leaseback This is when a homeowner surrenders the title of their home in exchange for being able to
stay as a renter, eventually buying back the home (a false rent-to-own). The problem comes when the
homeowner is promptly evicted and left with no legal recourse because they signed over rights to their home.

The good news is these types of scams were officially deemed illegal according to the FTC as of 2011.9

I strongly urge you to never pay money nor sign the title or rights to your property to any third party (entity other
than your lender) who is guaranteeing or promising you to stop your foreclosure. The only persons/entities that can
promise you and be able to stop your foreclosure are your lender and the judge hearing the foreclosure claim.10 If
your bank asks for a partial payment on a balance to consider letting you keep your home, make sure to get that offer
in writing. Otherwise, they can simply apply that money towards penalty fees, late charges, and any monies
outstanding, and still foreclose on the property.

Warning Signs of Foreclosure Scams


In 2014, NeighborWorks America made a very informative, short video centering around loan modification scams.11
The video opens, In 2009 when the loan modification scam alert campaign started, the biggest sign of a scam was
companies asking for money, usually up front. NeighborWorks America took to the streets to find out what people
really knew about loan modification scams. I recommend that you watch (the video is just over two minutes long) and
see how you would respond to the interviewers questions, such as how much would you be willing to pay for a loan
modification and whether you know it is illegal for companies to charge you for a modification.

There are some warning signs that you can look for to avoid becoming a victim of a foreclosure rescue scam. Use
extreme caution if:

You are asked to pay a fee in advance of receiving any assistance.


The company is guaranteeing that they can stop your foreclosure. Only your lender can make this claim.
You are told to stop making your monthly mortgage payments and pay the company instead. Dont make
payments to anyone except your lender.
You are pressured to sign over the title to your home without fully understanding what youre signing.

8
http://www.995hope.org/find-help/mortgage-scams
9
https://www.ftc.gov/news-events/media-resources/consumer-finance/mortgage-relief-scams
10
Bankruptcy judges can only delay the foreclosure process, but are not able to dismiss the foreclosure.
11
https://www.youtube.com/watch?v=dB6dMblr_ko&feature=youtu.be

11
The company claims to be government approved. When you see this, make sure to do your research and
check them out by contacting your state attorney generals office.
You are asked to provide personal financial information to a company you dont know. Contact your state
attorney generals office to learn about the company.

For more detailed information, visit the U.S. Department of Justice U.S. Trustee Programs list of warning signs at
www.usdoj.gov/ust/eo/public_affairs/factsheet/docs/fs06.htm.

Basically, the scam artist is trying to isolate you from communicating with your actual lender or a legitimate
counselor while convincing you that they are the only resource you need. This cuts you off from your legitimate
source of help. Dont let that happen!

What can you look for to make sure a company or agency is legitimately trying to help you? They will work with you
to review all your paperwork and loan documentation and discuss the process and your options in detail. Everything
will be documented in writing, and they will not object to your asking for input from other professionals attorneys,
counselors, your lender, and so on. The best part? They will not ask for a fee for their services, much less up front.

If you suspect any of the above warning signs are happening to you, stop immediately, start asking questions, and do
some investigating. Call the Homeowners HOPE Hotline at 888-995-HOPE if you have any doubts, concerns or
questions, or think you may have been the victim of a scam. When you are uncertain, DO NOT SIGN ANY
DOCUMENTS AND IMMEDIATELY SEEK ASSISTANCE FROM ANY FEDERAL, STATE, OR LOCAL AGENCY OR
LOCAL/COUNTY COURT OR BAR ASSOCIATION. See the Appendix for more information.

As with many things in life, if something sounds too quick, too easy, or too good to be true, it most likely is.

12
Top 5 Questions People Facing Foreclosure Ask
The top 5 most common questions that I hear from homeowners facing foreclosure are as follows:

1. Can I save my home from foreclosure?

It is possible that you can save your home from foreclosure; it goes back to what was mentioned earlier. You need to
start taking action immediately by thoroughly and completely reading and understanding the claim that has been
brought against you. Next you need to gather and understand all of your loan documents and find out who you need
to speak with to begin the process of stopping the foreclosure. Then you need to contact your lender and open up a
dialogue. Make a complete and thorough assessment of your financial situation and consider all your options,
including bankruptcy and short sale.

2. What options do I have if I receive a foreclosure notice?

If you have received a foreclosure notice of some sort, your options for alternatives to foreclosure, are (in general
terms).12

Loan modification This is when a lender modifies your current loan to give you a monthly payment amount
that is more manageable for you. The final amount of the loan may increase as a result, but youll be better
able to manage the payments for the long term.
Forbearance Forbearance temporarily suspends the monthly mortgage payments and can halt the
foreclosure process, but only with the lenders agreement.
Repayment plan The lender spreads out the missed payments over installments to give you a chance to get
caught up on the loan.
Partial claim This is an interest-free loan to help you reinstate a delinquent loan. This is on top of (in
addition to) the original mortgage, not in place of.
Refinance A lender may be willing to refinance the current loan. Any missed payments are then just built in
to the new loan amount.
Forgiving a payment A lender may forgive the missed payments as long as the borrower agrees to remain
current moving forward. This option is extremely rare, so not likely.
Reinstatement This is when a homeowner repays all owed monies to the lender, including the missed
mortgage payments, any late fees, and additional fees the lender has imposed.

As you can see, there are a number of different options, but you wont even be able to begin exploring them until you
take a deep breath and contact your lender (or a counselor) to start the discussions.

3. Why should I talk (work) with my lender if I have received a foreclosure notice?

We talked about this a little in the previous section. The lender does not want your house back. To them it means
additional expense, added inventory, and additional resources that they would rather not use up.

Talking to and agreeing to cooperatively work with your lender can present you with options to potentially avoid
foreclosure. By making your lender aware of your financial situation, explaining why you have missed payments and
being willing to agree to some financial plan will extend good faith that you are willing to do whatever is necessary to
try and avoid foreclosure.

If you dont communicate with your lender, they wont be able to work with you on any options.

12
http://www.995hope.org/find-help/understanding-foreclosure

13
4. How do I qualify for/can I get a loan modification on my mortgage?

Lenders generally provide homeowners with the opportunity for a loan modification. A loan modification is a
negotiation between a lender and a borrower where the loan terms are restructured without refinancing. The rate and
terms of the loan are restructured to fit the current financial situation of the borrower.

Banks and lenders would rather take less money and keep homeowners in their home while making a payment that
they can afford, than go through the expense of foreclosing on the home, hiring a listing agent, rehabilitating the
home, and letting it sit empty on the market for months, only to lose thousands of dollars in the process.

A loan modification is a good solution for those who cannot refinance, are behind on payments, are struggling to
make the payments, have experienced a genuine hardship, and want to stay in the home. A loan modification is a
permanent solution and is not meant to be used as a temporary stop to the foreclosure process.

A loan modification might be an option for anyone who can prove they are having a tough time or "hardship," but
especially those who:

Are at least one month behind on a mortgage payment.


Have negative amortizing loans.
Have loans that are about to adjust.
Are upside down on their loan (owe more than the loan amount).
Would rather keep their home than do a short sale.

One of the benefits when doing loan modifications is that there are no credit checks, so everyone qualifies in that
aspect. If you are considering a loan modification, you will be asked to provide the following information to your
lender:

Hardship letter This will include dates, the reason for the payment delinquency, and what you have done to
attempt to work out the problem in the past. Also include any supporting documents for the hardship. It's
best if your hardship letter comes from you directly rather than from some third party.
Bank statements The last two (2) months.
Proof of wages and salary Pay stubs for the last two (2) months if you are employed; 1040s for the last
two (2) years if you are self-employed.
Federal tax returns The first and second pages (W2s) from the last two (2) years.

Be sure to retain all your original documents. Make copies of all the documents you present to the lender and keep a
set of those documents for yourself so you can keep track of what documents you have provided to lender; file a
Notice to Court detailing/listing those documents the lender asked you to provide and the date you provide them to
lender. The Notice to Court forces the lender to stay abreast of the case; they cannot delay and simply say they do
not have all documents required to determine what follows on your case.

5. Where can I find affordable, trustworthy, and reliable assistance?

There is great news for anyone facing foreclosure: there is plenty of assistance available to help you with your
decisions, much of it at no cost to you.

Further, visit www.BluegateManagement.com and receive free information on the demographics and market value of
your property.

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About Bluegate Management Company
Our goal at Bluegate Management Company (BMC) is to guide and help individuals increase their wealth via
homeownership opportunities. We buy and sell real estate assets in the form of non-performing mortgages or
distressed REO properties. Our business process is focused around reaching out and building long-term relationships
with property owners, bankers, secondary mortgage market sale professionals, and local real estate agents around
the state of Florida.

Currently there are a lot of players in the real estate space who have no real experience in the determination of asset
value. They over-bid for properties to get them under contract, and 65% of the time they end up not closing the deal
either due to lack of funds or because they discover issues at the last minute that make the deal unworkable and not
profitable for them. This results in distrust from buyers and a waste of everyones time. At BMC, our collective
experience and consistent evaluation approach enables us to submit firm bids to sellers. We commit to a price on a
property when all of our due diligence has been completed and risk factors identified and priced into our bids. To a
seller, this means there will be no last minute, surprise price changes, except and pending a house inspection
(based on what is found during the inspection).

The Bluegate Management Company Competitive Advantage


At Bluegate Management Company, we offer the following competitive advantages:

We use our own capital, or that of a partner investor.


Fast turnaround time for due diligence (80% run in-house).
No complicated committee for investment analysis. Evaluation is a clearly defined process.
Economic knowledge of the demographic areas in which we invest (rent rate, income, demographic
composition).
Use of flat listing agents for asset sales, which enable us to give out incentives to brokers when we sell.
In-house experience with estimating repair costs and managing the property rehab process.
In-house counsel for contract negotiation and preliminary title reviews.
We shadow underwrite wholesalers deals in order to pick them up if they do not close on them.
Access to a network of over 8,000 buyers through our relationship with Real Estate Investor Associations.

Bluegate Management Company Essential Questions


Here at BMC we believe every person asks the following questions before working with any new product or service:

What is it?
What is it about?
What is in it for me?
How do I get started?

We posed those questions to ourselves to give you the best understanding of how we can help you.

What is it? BMC is an experienced assets and real estate property evaluation, acquisition, and management firm.
BMC is proud to serve ethically and transparently, with the best interests of our clients always in mind.

What is it about? BMC counsels and serves self-employed and small business owners, mid-level professionals and
homeowners to acquire and maintain their real property assets. BMC provides clients with specific, substantiated,
and complete assessments and advice on any specific asset and/or real estate property the client wants to sell, buy,
or invest in for their financial gain. BMC analyzes best conventional and alternate finance mediums.

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What is in it for me? Our professional staff advises clients on finding solutions to their real estate property concerns
and helps clients develop specific strategies to achieve asset and homeownership objectives. BMC presents clients
with opportunities to grow their wealth and enjoy and secure homeownership.

How do I get started? Contact the team at Bluegate Management Company so they can get right to work with you.
Learn more about BMC at http://www.bluegatemanagement.com or by calling 305-209-6662.

How Bluegate Management Company Can Help


Bluegate Management Company will not do anything illegal or unethical. BMC provides you, free of charge, this guide
and all its resources available on our website, to help you minimize all the negative consequences of foreclosure.
Here at BMC, we can buy properties via short sale and deed-in-lieu of foreclosure, perform an updated asset
valuation, and identify current market conditions.

To learn more and to get started today, visit http://www.bluegatemanagement.com.

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