Home Mortgage Options Vineyard Columbus Financial Ministry

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   Home  Mortgage  Options                                          u                                          Vineyard  Columbus                                            u                                          Financial  Ministry      Prepared  by  Kent  Irwin,  Vineyard  Columbus  Financial  Ministry                                                                                                                                                                                                                              Page  1  of  2  

Introduction

This information has been assembled to foster additional conversations with your advisors regarding your difficulty to make mortgage payments. This does not replace advice from your legal, tax, finance, loan modification (HUD), banking and real estate advisors whom you should seek the advice. It is especially important to become involved in a small group for prayer and support during this type of difficulty.

Steps to get current on payments:

1. GET COUNSEL: Plans fail for lack of counsel, but with many advisers they succeed- Proverbs 15:22 2. ORGANIZATION - Make order when there is disorder; Organize all of your records into accordion file 3. DESIGN AND FOLLOW A SPENDING PLAN - Estimate all current monthly expenses, determine if income exceeds expenses - Determine what expenses are necessary and which ones are not. Reduce or eliminate ‘wants’ until expenses are less than income. - Follow your new budget by tracking and limiting expenses 4. IF EXPENSES STILL EXCEED INCOME - Sell unnecessary items, use cash proceeds to maybe reduce credit card and other like debt - Get a second job or work overtime 5. FOLLOW BIBLICAL FINANCIAL WISDOM - Regarding spending, borrowing, stewardship and more. If you don’t know this, reach out to us for additional information or counsel 6. PRAY FOR - His advice, wisdom, counsel, miracles, sustenance and direction - Contentment, hope, growth and peace during difficulty

If above steps are not yet adequate

1. ORDER OF PAYMENTS If you have done everything you can do to get current but you are still unable to, it is important to have a priority to your making of payments. This should be first centered around security needs of food and shelter: Rent or mortgage, Food, Utilities, Transportation, Health insurance. Second Priority: IRS tax payments, Notices from lawyers or courts, and Creditors threatening lawsuits, Student loans then all other creditors. 2. READ DEBT RE-PAYMENT WHITE PAPER If you are considering Debt Remediation options: a. Dealing with lenders myself b. Debt counseling or negotiation agency c. Bankruptcy 3. MORTGAGE OPTIONS (SEE NEXT PAGE) a. Become familiar with the options i. Standard Lender Options ii. Government Sponsored Programs b. Beware of scams, do not pay any fees to a third part firm making big promises c. Attend a foreclosure seminar 4. CONTACT a. Your lender b. Save the Dream 888-404-4674, or www.SavetheDream.Ohio.gov c. www.MakingHomeAffordable.gov - If you pursue the options from your lender or these agencies: i. Keep records of all written documentation and write account numbers on each page ii. Read all documentation iii. Get advice before signing anything iv. Make copies of all submitted information, you will probably have to submit it again v. Keep detailed records of every phone conversation: who you spoke to, when (date and time), what was said, phone number and email address of person you spoke to. vi. Be very persistent, call every 5 – 10 business days. Paper work gets misplaced or forgotten and the squeaky wheel usually gets more notice. Home mortgage solutions

   Home  Mortgage  Options                                          u                                          Vineyard  Columbus                                            u                                          Financial  Ministry      Prepared  by  Kent  Irwin,  Vineyard  Columbus  Financial  Ministry                                                                                                                                                                                                                              Page  2  of  2   Item Description Pro Con 1

Retain with no change

Slow methodical work out

Through disciplined spending, working extra, selling items etc. may have spiritual benefits and helps maintain credit rating

May deplete all assets that could have been retained if pursued other means and may delay the inevitable

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Refinance to Lower Payment

New financing to replace existing mortgage

Lowers house payment using lowest interest rates available in decades. Usually only consider if low/no cost to refinance

Poor credit rating may not make this option available. Run analyticals to determine actual costs and benefits

Gov’t sponsored and bank supported lowering of payment

May lower payment for a season, helping people to stay in their home until/while finances improve

Requires diligent record keeping, follow-up, and less than 20% (+/-?) people get them

Become a landlord, or take in a roomer

Rent may equal or exceed mortgage payment(s)

Maintenance, tenants that don’t pay on time and may damage property. Check with lender and insurance company

Regular sale

Hopefully get what you owe and pay off mortgage(s)

Market very slow, depreciated house values

Transfer deed to primary lender

May result in forgiven debt, promissory note, repay some shortfall, and/or tax obligations

Requires a cooperative lender. More difficult if 2nd mortgage. Move out date sooner, 2nd mortgage?

Sell for less than owe

May result in forgiven debt, promissory note, repay some shortfall, and/or tax obligations

Requires a willing buyer and a cooperative bank. More difficult if 2nd mortgage.

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Loan Modification To Lower Payment Rent Lease the home to someone Sale Move to rent or buy lower cost Deed in lieu of foreclosure Quickly dispose of home, transition to rent buy lower cost home Short Sale Sell home instead of regular long sale period then transition to rent or buy lower cost

Takes a long time if done right(?), save mortgage payment and use it to Wrecks credit rating, you may end up pay off other debt or accumulate owing lender(s) the difference between Default on payment money to move. May result in outstanding debt and Sherriff or bank repayment of shortfall and/or tax sale amount and costs. obligations Forgives or deals with most debt. Student loan debt, most tax obligations, child support and some other types of debts cannot be Sub Chapter 13 – Credit rating lowered, and it appears discharged in bankruptcy. Some Bankruptcy Debt repayment on credit records for a very long time. If 9 assets may be retained (e.g. personal Home Retention Sub Chapter 7 – you later foreclose, see above, you property, auto equity, and retirement Debt forgiveness may wish you let the home go. accounts). Home retention may be possible. Since other existing debt is forgiven home payment may be affordable. Forgives or deals with most debt. Sub Chapter 13 – Student loan debt, most tax Requires relocation 1 Bankruptcy Debt repayment obligations, child support and some Credit rating lowered, and it appears 0 Home Release Sub Chapter 7 – other types of debts cannot be on credit records for a very long time. Debt forgiveness discharged in bankruptcy. This doesn’t describe all options (e.g., mediation, all loan modifications), address the implications of each option such as taxes, whenever a lender bank forgives (could be IRS debt or not) debt in non-bankruptcy. This is a very abbreviated review of many options. We don’t insure accuracy of this information. Read thoroughly all documents, and seek legal advice before signing. Most of these lower credit rating – usually not 1,2,4,5-- by themselves. Foreclosure Stay in home until 8 forced out by law