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Rick Smenner, Agent RE/MAX Preferred Properties, Inc.

Rick Smenner, Agent RE/MAX Preferred Properties, Inc. My Solution Process. 1. Analyze YOUR Situation. 2. Explain all of YOUR Options. 3. Recommend a SOLUTION. My Solution Process. 1. Analyze YOUR Situation. 2. Explain all of YOUR Options. 3. Recommend a SOLUTION. Questions.

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Rick Smenner, Agent RE/MAX Preferred Properties, Inc.

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  1. Rick Smenner, AgentRE/MAX Preferred Properties, Inc.

  2. My Solution Process 1. Analyze YOUR Situation 2. Explain all of YOUR Options 3. Recommend a SOLUTION

  3. My Solution Process 1. Analyze YOUR Situation 2. Explain all of YOUR Options 3. Recommend a SOLUTION

  4. Questions 1. What happened to get you here? (make notes for hardship letter)2. What solutions (foreclosure) have you sought to remedy situation?3. How much did you PAY for the house? When? Worth now?4. How much OWED? 1st / 2nd / Other Liens against property5. How much are your payments? 1st / 2nd – include taxes/insurance?6. How far behind are you on payments? Late fees/penalties? 7. What is the current condition of the house? Any problems? 8. What kind of work needs to be done to the house? 9. Are you behind on other bills – credit cards/utility/car payments? 10. What is you current monthly income? How stable is job? 11. Based on your income – how much can you afford to spend monthly? 12. How much CASH do you have available? In 30 Days? 13. Do you have any fall-back resources? (401K – Life Policies – Retirement Accounts – Annuities – Investments – Jewelry – Other Assets)14. Would you prefer to STAY or VACATE? Why/Why Not? 15. If you were to VACATE where would you go? 16. WHAT TROUBLES YOU THE MOST ABOUT THIS SITUATION?

  5. Review Documents 1. Any Letters/Documents received from the Lender2. All Legal filings and Official notices3. Materials (solicitations) received from others 4. Original house purchase documents5. Recent appraisals – Major Improvements6. Tax Returns / Pay Stubs / Bank Statements7. Investment / Retirement / 401K / IRA Accounts8. Paid up Life Insurance Policies / Annuities9. List of Personal Assets - Financial Statement The Property 1. Detailed ‘work to be done’ List - Major Mechanical Deficiencies2. Possible Marketability Issues / Challenges

  6. My Solution Process 1. Analyze YOUR Situation  2. Explain all of YOUR Options 3. Recommend a SOLUTION

  7. IT’S YOUR DECISION… THE RISK OF DOING NOTHING DOING SOMETHINGversus DOING NOTHING

  8. THE RISK OF DOING NOTHING • FUTURE Negative Impact: • Family Housing Needs • Auto/Health Insurance Rates • Sky High Financing Rates • Employment / Job Applications • Investigative Background Checks • College Grants and Scholarships THE RISK OF DOING NOTHING

  9. THE RISK OF DOING NOTHING FORECLOSURE INFORMATION REMAINS PUBLIC!!Embarrassing Humiliating  Shameful  Don’t Let this Happen to Your Family… THE RISK OF DOING NOTHING

  10. IT’S YOUR DECISION… THE RISK OF DOING NOTHING DOING SOMETHINGversus DOING NOTHING

  11. IT’S YOUR DECISION… PLAN TO STAY OR PLAN TO VACATE SHOULD YOU STAY? or SHOULD YOU VACATE?

  12. STAY or VACATE? Key issues to be considered… DESIRE – do you really want to stay in the home? MONEY – can you afford to stay in the house? FINANCIAL – does it make good fiscalsense to stay? TIME – do you have enough time to arrange to stay? COMMITMENT – are you willing to do whatever it takes? PLAN TO STAY OR PLAN TO VACATE

  13. The Stay or Vacate DECISION MAKING GRID Assign a POSITIVE (+) or NEGATIVE (-) to each of the following: DESIRE – do you really want to stay in the home? + - + - MONEY – can you afford to stay in the house? FINANCIAL – does it make good fiscalsense to stay? + - TIME – do you have enough time to arrange to stay? + - + - COMMITMENT – are you willing to do whatever it takes? Scoring: 4 or 5 Pluses = You Should Absolutely STAY!! 3 Pluses = It’s Rather Questionable 1 or 2 Pluses = You Should Plan to VACATE!! # of Pluses

  14. IT’S YOUR DECISION… IS IT BETTER TO STAY OR VACATE? STAY or VACATE?

  15. STAY OPTIONS 1. Refinance or Payoff the Loan

  16. STAY OPTIONS 1. Refinance or Payoff the Loan

  17. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback

  18. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback

  19. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback 3. Negotiate a Lender Workout

  20. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback 3. Negotiate a Lender Workout REINSTATEMENT =

  21. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback 3. Negotiate a Lender Workout FOREBEARANCE =

  22. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback 3. Negotiate a Lender Workout LOAN MODIFICATION =

  23. LOAN MODIFICATION When does it really make cents? … DO YOU MAKE TOO MUCH / TOO LITTLE? … IS THERE A SUSTAINABLE INCOME? … IS THE LENDER JUST TEASING YOU? (Have they provided you with a written Loan Modification Benefits Analysis yet? – If not they probably aren’t going to do so.) … DOES IT REALLY MAKE GOOD FISCAL SENSE? SIMPLIFIED (+ HOPEFUL) MODIFIED PAYMENT CALCULATOR – 1. Property Taxes per month: $_____________ (this won’t change) 2. Property Insurance per month: $ _____________ (this won’t change) 3. Hopeful Principal Payment at ____ % = $ _________ (this may change)

  24. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback 3. Negotiate a Lender Workout 4. File for Bankruptcy??

  25. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback 3. Negotiate a Lender Workout 4. File for Bankruptcy?? … ONLY DELAYS THE FORECLOSURE – NO STOPPING IT … BETTER TO FILE BK AFTER FORECLOSURE – NOT PRIOR … CAN SOMETIMES COST YOU MUCH MORE $$$$

  26. STAY OPTIONS 1. Refinance or Payoff the Loan 2. Pre-arranged Sale / Leaseback 3. Negotiate a Lender Workout 4. File for Bankruptcy??

  27. IT’S YOUR DECISION… IS IT BETTER TO STAY OR VACATE? STAY or VACATE?

  28. VACATE OPTIONS 1. Abandon the Property

  29. VACATE OPTIONS 1. Abandon the Property

  30. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu

  31. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu … YOU GIVE UP ALL OF YOUR RIGHTS … THEY MAY NOT WANT IT OR TAKE IT … LENDER MAY STILL FORECLOSE … THERE ARE NO GUARANTEES

  32. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu 3. Rent Property to a Tenant

  33. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu 3. Rent Property to a Tenant … TAKES TIME AND $$$ TO GET RENTED … ONE PROBLEM TRADED FOR ANOTHER … LENDER MAY STILL FORECLOSE … THERE ARE NO GUARANTEES

  34. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu 3. Rent Property to a Tenant 4. File for Bankruptcy??

  35. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu 3. Rent Property to a Tenant 4. File for Bankruptcy?? … ONLY DELAYS THE FORECLOSURE – NO STOPPING IT … BETTER TO FILE BK AFTER FORECLOSURE – NOT PRIOR … CAN SOMETIMES COST YOU MUCH MORE $$$$

  36. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu 3. Rent Property to a Tenant 4. File for Bankruptcy?? 5. SELL THE PROPERTY!!

  37. VACATE OPTIONS 1. Abandon the Property 2. Offer Lender a Deed-in-Lieu 3. Rent Property to a Tenant 4. File for Bankruptcy?? 5. SELL THE PROPERTY!!

  38. SELL THE PROPERTY

  39. SELLING OPTION 1 TRADITIONAL RETAIL SALE

  40. SELLING OPTION 1 TRADITIONAL RETAIL SALE SPRUCE UP THE PROPERTYMAKE ALL THE NEEDED REPAIRS

  41. SELLING OPTION 1 TRADITIONAL RETAIL SALE SPRUCE UP THE PROPERTYMAKE ALL THE NEEDED REPAIRS + = Should Sell for the Highest Price - = Will Take the Longest Time to Sell - = Need $$ and Time for Repairs - = Proceeds May Not Satisfy all Liens

  42. SELLING OPTION 2 SELL WITH CREATIVE FINANCING

  43. SELLING OPTION 2 SELL WITH CREATIVE FINANCING YOU BECOME THE BANK

  44. SELLING OPTION 2 SELL WITH CREATIVE FINANCING SPRUCE UP THE PROPERTY MAKE ALL THE NEEDED REPAIRS + = May Sell for a Higher Price - = May Take the Less Time to Sell - = Need $$ and Time for Repairs - = Proceeds May Not Satisfy all Liens - = Increased RISK for both Parties

  45. SELLING OPTION 3 SELL IN “AS-IS” CONDITION

  46. SELLING OPTION 3 SELL IN “AS-IS” CONDITION SPRUCE UP THE PROPERTYMAKE ALL THE NEEDED REPAIRS

  47. SELLING OPTION 3 SELL IN “AS-IS” CONDITION SPRUCE UP THE PROPERTYMAKE ALL THE NEEDED REPAIRS + = Will Sell for the Much Less $$ - = Will Take the SHORTEST Time to Sell - = Need $$ and Time for Repairs - = Proceeds May Not Satisfy all Liens

  48. SELLING OPTIONS 1. TRADITIONAL RETAIL SALE 2. CREATIVE FINANCING 3. SELL IN “AS-IS” CONDITION

  49. WHAT HAPPENS… IF WE OWE MORE THAN IT SELLS FOR??

  50. WHAT HAPPENS… IF WE OWE MORE THAN IT SELLS FOR?? “AS-IS”VALUE = $ 150K TOTALOWED= $ 190K $ 40,000 IN NEGATIVE EQUITY!!

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