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Timothy McCandless Esq. and Associates
  Northern and Southern california
(866)717-0415
FAX (909) 382-9956
tim@saharaoasis.com

Our team of dedicated legal professionals is well-versed in defense of the foreclosure process and Loan Modification we have a unique approach to many consumer law areas. We will not advocate for you in an area we are not experienced in. Our team brings a diverse background to the table, allowing us to advocate for you in many areas of law. This gives Timothy McCandless Esq. and Associates an edge when dealing with complex legal matters as it applies to Foreclosure Bankruptcy and defense of eviction after sale. Often, more than one area of expertise is required. No need to hire a multitude of attorneys. We can provide you with comprehensive legal support in many areas.

Timothy McCandless Esq. and Associates offers free initial consultations.

  •  Solutions to Default & Foreclosure!

     

    Help Homeowners Keep Their Homes, and Lenders Keep Their Loans www.thestopforeclosureplan.com

     

    Service Hotline Information Line: (866) 717-0415

     

    NOTICE:

     

    The lending industry has indicated that it wants borrowers to know that it is willing to work out creative solutions to mortgage payment default and foreclosure problems!

     

    INHERENT PROBLEM & WARNING:

    The borrower has less expert knowledge of potential loan workout deal structures, is in financial trouble and acts with less bargaining power. This often causes the borrower to accept a loan workout deal that he/she either cannot afford, or does not understand.

     

    For example only, most deals wherein the lender forgives certain amounts of debt due on the loan(s), are subject to (1) income tax due the I.R.S. as “Forgiveness of Debt” income, and (2) personal liability for the “deficiency” of the forgiven loan balance – which most lenders will demand or sue to collect as a “deficiency judgment” within one year thereafter. These and many other items are negotiable with the lender, with great limitations on the I.R.S. potential liability.

    Congress understands that borrowers don’t want to talk to their lender (servicer) or the lender’s foreclosure attorney. From embarrassment to conflict of interest there are real reasons that cement the communication divide. Partly for this reason, approved HUD consultants and select attorneys are offering to act as neutral representatives between the borrower and the lender, or give credit counseling advice.

    The provider of this pamphlet  www.the stopforeclosureplan.com and the law offices of Timothy McCandless, offers specialized loan workout solutions for the lender and the borrower. Using this booklet will assist you in understanding some of the potential options available to distressed homeowners. Avoiding the lender will only result in foreclosure, loss of your home, loss of your good credit, and a potential deficiency and tax liability or judgment.

    On the other hand, desire and willingness alone will usually not suffice to fashion a loan workout solution. The lender will require a detailed explanation of the borrower’s financial ability (or inability) to repay the loan. Most, but not all, loan workouts require the borrower to pay and make up the default or foreclosure costs, attorney fees, including late fees and associated principal and interest due and other costs. However, increasingly, lenders will agree to compromise as the inventory of real estate owned (REO) by the lenders increases, day by day.

    One must understand that lenders are not required to work anything out for the barrowers benefit the main reason for these workout solution is that the lender could be stuck with a non-performing asset and the barrower could string things out in such a way that the lender’s losses will increase.

    These are workout options short of a workout, the borrower has two legal options . One to sue the lender for some malfeasance on the part of the lender; or  two file Bankrutcy and propose a payment plan to pay back the full loan over 5 years on the back payments. Borrowers may resort to bankruptcy protections, which may or may not save the home. Borrowers may also have legal claims against lenders, servicers, brokers, or Wall Street firms for predatory lending, fraud, RICO, misrepresentation, negligent product development, breach of good faith duties, breach of warranty of fitness for a particular purpose, breach of Federal or State laws, among many other causes of action. Each and all of these may or may not have merit for a particular borrower.

     

    In addition to recent (2007) great loan losses, two bankrupt Bear Stearns Funds, over 137 lenders out of business, or operating in a very limited capacity, a credit crunch and a liquidity crisis under way, lenders and investment banks are forced to take back property that they are not set up to resell.

     As most people can’t currently get loans to buy foreclosures, or refinance out of a loan, REOs owned by Wall Street investment banks are rising at an alarming rate. Take note of the chart indicating the rate of change from 2006 to 2007 for REOs of Bear Stearns, Citigroup, JP Morgan Chase, Merrill Lynch, Morgan Stanley, and Lehman Brothers. The rate of firms taking back ownership of property has jumped as high as 497%.

    You or your attorney, or HUD representative, should and must call your lender and embark on a plan to resolve your financial woes.  Here are some of the ways workouts can work to every ones advantage:

    1. Pre-Foreclosure Loan Refinance –You would refinance to avoid resets, or “unaffordable” payments, etc. Currently loan “eligibility” is based upon new federal regulations requiring the “fully adjusted indexed interest rate”, not the teaser rate. Lack of equity as a result of the devaluation in home prices has restricted  borrowers options. This could result in many borrowers failing to qualify for the refinance option.But if the borrower can qualify, this may be the most immediate solution. However, if the type of loan and terms, including any adjustments or resets, simply postpone the resulting inability to pay, then this may not be a solution at all. Brokers and lenders must also now document that any loan they give you has a “net tangible benefit”. Refinancing may not be possible for many borrowers in the current real estate market bcause:

    (1) the market price or value may have fallen to a point where your equity

    is insufficient to qualify for a refinance,

    (2) the fully indexed interest rate may reveal an inability to qualify, and/or

    (3) the revised or eliminated loan programs are more stringent than when you

    obtained the loan you are attempting to refinance, precluding you from qualifying

    with the available loan programs.

    Key issues of concern for a refinance depend upon:

    A. Amount of Income and/or or Assets (whether you can document it or not),

    B. Credit score and credit report (high scores can place you in easy qualifying

    loan programs)

    C. Value or appraisal of home (a high valuation will result in more equity to

    allow you to qualify in more loan programs)

    D. Amount of home equity (depending upon the requirements of the particular

    loan program you are seeking)

    E. Amount of Cash for upfront loan fees

    F. Availability of easy qualifying loan programs (loan programs change all the

    time; you need a broker who can shop many differing programs to meet your

    unique situation; if you have negative default marks on your credit, you may

    need a lender who has a loan program that will give you a second chance)

    If you succeed in a refinance, the default or foreclosure will be cured or null and void.

    2. Short Refinance –  A short refinance would allow a refinance to a new affordable loan, at a loan  amount less than the current loan balance owed.

     

    This would require the lender(s) to agree to refinance your loan to another loan to an amount less than the amount due on the defaulted or troubled loan.

     

    There are many reasons that a lender might agree to do this, all of which will require you to prove that you could afford the new loan, as opposed to the troubled loan, probably for reasons beyond your control or fault. The goal is to refinance to avoid loss in asset devaluation and pending resets, etc. This would allow homeowners to stay in homes, create part of the ‘equity’ that was lost in the massive home devaluation and obtain “eligibility” and “affordability”.

    3. Pre-Foreclosure Sale – If you can’t refinance your home for any reason, you should consider selling it. However, this option may not be possible if the market price is below the loan amount, unless you do a short sale. The resale market is currently limited. It’s a options. This could result in many borrowers failing to qualify for the refinance option.

    But if the borrower can qualify, this may be the most immediate solution. However, if the type of loan and terms, including any adjustments or resets, simply postpone the resulting inability to pay, then this may not be a solution at all. Brokers and lenders must also now document that any loan they give you has a “net tangible benefit”. Refinancing may not be possible for many borrowers in the current real estate market because:

    (1) the market price or value may have fallen to a point where your equity

    is insufficient to qualify for a refinance,

    (2) the fully indexed interest rate may reveal an inability to qualify, and/or

    (3) the revised or eliminated loan programs are more stringent than when you

    obtained the loan you are attempting to refinance, precluding you from qualifying

    with the available loan programs.

    Key issues of concern for a refinance depend upon:

    A. Amount of Income and/or or Assets (whether you can document it or not),

    B. Credit score and credit report (high scores can place you in easy qualifying

    loan programs)

    C. Value or appraisal of home (a high valuation will result in more equity to

    allow you to qualify in more loan programs)

    D. Amount of home equity (depending upon the requirements of the particular

    loan program you are seeking)

    E. Amount of Cash for upfront loan fees

    F. Availability of easy qualifying loan programs (loan programs change all the

    time; you need a broker who can shop many differing programs to meet your

    unique situation; if you have negative default marks on your credit, you may

    need a lender who has a loan program that will give you a second chance)

    If you succeed in a refinance, the default or foreclosure will be cured or null and void.

     

    Take & Toll Agreement: If you inform your lender that you are trying to sell

    your home, or have your home listed with a real estate professional, the lender

    may be willing to take the foreclosure sale off calendar and toll the timeline

    pending its sale for a certain period of time (Take & Toll). At the end of the

    agreed period, the lender will have the right to immediately start up the remaining

    time on the foreclosure clock and move to sell the home at foreclosure without

    restarting the foreclosure notice clock over again. Some lenders have differing

    rules about when they allow certain solutions or not. Some lenders or loans (i.e.:

    federally insured mortgages) may require that you meet HUD appraisal

    requirements, are at least 2 months behind in payments (delinquent), and expect to

    be able to sell the home within 3-5 months.

    If you can’t sell the home for at least the amount of the loan and any related default or late fees and costs, then you need to consider the following options.

     

    4A. Extension of Adjustable Rate Loan Reset Dates or Terms- Extending the adjustable loan reset dates will help delay the current or expected increase in monthly payments. However, this is not a long term solution. This is an interim loan measure only. It may only delay the “unaffordable”. As a result of the recent subprime meltdown, lenders and servicers have indicated at trade conferences that most will be willing to extend or toll the dates that the loan terms are scheduled to reset at higher interest rates, resulting in higher monthly payments, or dates requiring certain additions to loan balances upon which payments are calculated. This should be an easy thing to accomplish, but lenders are creating the rules as we go, so negotiate strongly to achieve a workable result. Certain major servicers, including Litton, have indicated that merely extending “reset” dates is not a solution at all, but a deferral of the inevitable default or foreclosure. This author agrees. It has been suggested at industry conferences that

    lenders, servicers, and investors agree to more substantial changes to achieve a realistic workable and affordable result.

     

    4B.  Extension of Resets & Long-Term Modification of Resets – Helping

    Homeowners Keep Their Homes, and Lenders Keep Their Loans! - Immediate “affordability” must be infused into the national sub-prime loan portfolio or the foreclosure fallout may threaten us with a serious recession. Price must be paid for risk, but voluntarily (or by industry or congressional mandate) lenders, borrowers, and investors must share in the price for this risk. Lenders and servicers with the approval of investors (by industry or congressional authority) should extend the mortgage resets immediately, and/or modify each adjusting loan by maintaining the lower (teaser) interest rate for at least 7-15 years even if it is an Interest Only (IO) or Negative Amortization (NA) (with balance accrual limits) payment (or agree on some low market interest rate approximation) and/or add a fee to the loan balance (of $5,000-20,000 (or calculate same by some market percentage) or a fee within Section 32 limits even if not required), which is then re-amortized over the life of the loan, or longer (i.e. 40 or 50 years).

     

    5. Lump Sum Cash Payment Loan Reinstatement - This is a typical loan workout or loss mitigation solution. It requires the borrower to have available “cash” to make up past arrears and associated costs. This is not a doable solution for most borrowers after they are in trouble, or after loan resets. Many borrowers in trouble, without sufficient knowledge or bargaining power, will borrow from family members to get the makeup payment, make the deal, only to renege because they truly cannot afford to carry that loan burden as cast. If you can raise or pay a cash lump sum on a date certain in the near future of the amount of the past due payment amounts along with late fees, attorney fees, and associated costs, then you may be able to work out a Reinstatement Agreement. If you can meet the key requirements, a Reinstatement will be an easy way to achieve a loan workout. REASONING: You will need to explain why you got behind in the first

    place and why you will be able to pay in the near future.

     

    6. Repayment Installment Plan - Maybe the most common solution is to agree to repay the amounts in default over time or in installments while you also pay your regularly scheduled payments. This is commonly called a Repayment Plan Agreement.  This plan is also available as a matter of law thru a Bankruptcy Chapter 13  plan.

    REASONING: Past Short-Term Hardship/Hardship is Now Over: The lender will not agree to this if your financial situation is unstable or reveals that you can’t afford to make such payments. You will need to show the lender the reasons why you got into short-term financial trouble, and why you are no longer in financial trouble. You will need to show the lender that your financial situation is such that you can afford to pay the amounts due under this agreement. The lender may agree that: (1) 20-50% of past due amounts be paid upon signing of the agreement, and (2) the remaining past due amounts be paid over a time certain to fit with your current ability to pay same, for example, over 6-24 months, and (3) the regularly scheduled payments also be paid in a timely fashion. This is an interim loan measure  only.  

     

    7. ‘Loan Modification’ to New Loan Note Agreement - The borrower can currently afford to make regularly scheduled payments but can’t afford past due amounts.

    REASONING: CAN AFFORD PAYMENTS/CAN’T AFFORD PAST DUE

    AMOUNTS: Loan modifications are all about negotiations, especially in this newly troubling real estate climate (2007-2010). The borrower should seek to have the lender add all past due payments, interest and associated costs and fee amounts to the principal balance of the loan, and reset same to a new “affordable” amortization schedule. You may find it advantageous to negotiate the longest amortization period possible to lower your monthly payments. For example, Amortization Term: (i.e. 30, 40, 50 years); Interest Only (Fixed for at least 5-10 years); Graduated Payment Plan (GPP) (agreeing to pay noor low payments in the early months, rising in direct relationship to what the borrower can “afford” in later periods). The borrower should expect to execute a new loan note and related loan documents, and receive a positive or neutral credit reporting of the current or prior loan and note agreement, resulting in a new loan note and agreement.When in doubt, make sure of this in writing in plain language. For example, confirm that

    no negative marks will be recorded on “credit report”.

     

    8. Loan Forbearance - Forbearance means time-out! Stop the lawsuits! Stop the

    foreclosure sale! Stop my payments! Lenders will consider a forbearance agreement to give you a time out from making payments or full payments for a limited time period allowing you to regroup.

    REASONING: Buy Time/Regroup: The borrower will have to agree to another option to bring the loan current when the forbearance period expires. Repayment or Reinstatement may be the agreed option to resolve the situation. Borrowers should only negotiate and agree to a plan that is doable, workable and affordable. If a hardship will result in a temporary or short term payment problems, the borrower will need to prove to the lender the reasons for such hardship and the reasons for recovery from such short term hardship. Lenders may agree to combine the Forbearance with other solution options as well. For example, it is common to use theforbearance agreement with a Reinstatement or a Repayment Plan. The question is always:

    CAN YOU BRING THE ACCOUNT FULLY CURRENT, WHEN, WHY & HOW?

    In the current climate, the borrower will need to ask for what is needed, not for what he thinks the lender will allow. If one needs Forbearance for certain reasons with an exit option other than Reinstatement or Repayment Plan, then it should be sought and negotiated. Borrowers should only negotiate and agree on a plan that is doable, workable, and “affordable”! Otherwise, a very capable foreclosure and litigating attorney will be at the borrower’s doorstep in due time.

     

    9. FHA HUD Partial Claim –

    Certain types of loans have certain prescribed procedures that may help or hinder your success. For example, if you have an FHA insured loan, you may be entitled to money for payments from HUD (Department of Housing and Urban  velopment). This program is called the FHA HUD Partial Claim Program. This program will afford the borrower with a payment from the FHA Insurance Fund.

    HUD REQUIREMENTS: You must be:

    A. At least 4 months but no more than 12 months delinquent on your

    regularly scheduled loan payments,

    B. Be financially stable and able to make fully amortized payments

    thereafter,

    C. You must execute a new HUD promissory note you must accept a lien

    against your home of such amounts as a HUD loan, without interest and

    due when you transfer, sell, or cease use as your home

     

    10. “Pre-Foreclosure Short Sale” for less than mortgage amount due –Short Sale: Can’t Afford: Can’t Sell on MLS: Move Out: Save Good Credit:

    In the event the borrower wants to move out, and has found a third party buyer that will only offer an amount less than the amount of the loan balance, a Short Sale may be the answer. The borrower will have to make a series of written representations to the lender in a Short Sale Package, including a Financial, Medical or Legal Excuse Hardship Letter with supporting documentation on (1) the borrower, (2) the home and (3) real estate market, including: bank statements, repair estimates, three to four months failed listing results (from the “multiple listing service”), rebuttal price opinions, purchase contracts, HUD-1 or settlement statement, proof of funds or prequalification letter from buyer’s bank, etc. The lender will also attempt to establish a fair market price for the house. The price the lender will propose is called the Broker’s Price Opinion (BPO). It will usually differ greatly from the price that the borrower expects to sell the home for based upon the seller’s experience of at least 3 months of failed sales. This reconciliation of the fair market price will cause great delays and drag the process on for months (and months).

    Notwithstanding, this stage will lend it self to buying a ‘short sale’ at a price below the amount due on the mortgages and usually 20-40% below market. This will also require the lender(s) to agree to take less than the amounts due, which will require 1-4 months of  negotiations. However, it is critical to understand that, although laws are pending in Congress, the homeowner presently may be subject to (1) income tax on the amount of forgiveness of debt, and/or (2) a deficiency liability for the difference between the sale proceeds and the mortgage balance outstanding, plus costs and fees. In California, the lender may not seek a deficiency Judgment on a non-judicial foreclosure and likewise the borrower has no Rights of Redemption therefrom; however, a short sale is not a nonjudicial foreclosure. It behooves both the buyer and the short seller to negotiate the  waiver of both the deficiency judgment and the income tax (1099 reporting) liability.

    An attorney should be consulted by the buyer and seller to avoid unwanted results. You need to make a hard decision about this possibility before accepting a short sale, or negotiate with the lender that it will not report a 1099 on these amounts for tax characterization or other factual or legal reasons. Note that bills are pending in Congress to forgive certain amounts from taxation.

     

    11. Deed In Lieu of Foreclosure

    HAND IN KEYS EARLY: WALK AWAY CLEAN: STOP FORECLOSURE

    PROCEEDINGS: CAN’T MAKE PAYMENTS: CAN’T SELL BUT TRIED: WANT OUT: WANT TO SAVE CREDIT SOMEWHAT: EARLY BIRD PRE-FORECLOSURE SOLUTION!

    If you can’t afford the payments on the loan and need to get out, contact the lender and offer a deed in lieu of foreclosure. The borrower is seeking an immediate release from the loan and all indebtedness, and cessation of the foreclosure proceedings. This potentially will save the lender much money, time and hassle from pursuing the foreclosure remedy against the borrower. Credit will typically show a negative mark from this situation, but much less serious than a foreclosure. As in a short sale, the borrower will have to show that he/she attempted to sell the home but could not. Unlike the short sale, he/she may have tried for only 30 days or so. Different lenders will have different requirements, including that you must offer the deed in lieu 30-60 days prior to the foreclosure sale date, the property must be vacant, and an exterior and interior appraisal must meet their requirements.

     

    12. Reverse Mortgage (for Seniors) – Seniors need to understand that they may seek a reverse mortgage that would replace their current loan requiring monthly current payments with a Reverse Mortgage that would NOT require current monthly payments. The reverse mortgage is paid off when the property is transferred or sold, or at death.

    Reverse mortgages are generally legitimate and should be considered by seniors with all of the other factors unique to each borrower, and his or her estate, succession and life insurance plans.

    .

    13. Defenses to foreclosure and bankruptcy -

    FAIR NOTICE AND DEFENSES TO FORECLOSURE: Borrowers have legal rights independent of the solutions offered herein. Borrowers are always advised to contact an attorney experienced in this area of the law. Borrowers may resort to bankruptcy protections, which may or may not save the home. Borrowers may also have legal claims against lenders, servicers, brokers, or Wall Street firms for predatory lending, fraud, RICO, misrepresentation, negligent product development, breach of good faith duties, breach of warranty of fitness for a particular purpose, breach of Federal or State laws, among many other causes of action. Each and all of these may or may not have merit for a particular borrower.

     

    Conclusion: The options are both plentiful and at the same time limited. A professional should be contacted to help determine the avalible options and evauate a course of action. The worst decision is no decision!

     Let The Experts Try to Save Your Home Call 1-866-717-0415!

    We analyze your situation to determine what is the best course to save your home, whether it be finding a new loan, renegotiating a new loan with your present lender, or suing your lender if appropriate for violations of the Truth In Lending and RESPA laws.

    Send your information and we will call you with in a few minutes and get you the solution you need! 

    Call 7/24, we are waiting for your call. 

    Newest Success - Homeowner 90+ days down on mortgage - Successful negotiation to resolve all back payments & fees with a 30 year fixed rate mortgage at 2%!!

    We are attorneys with decades of experience working clients who were cheated by their lenders working to STOP your foreclosure fast. We work hard to create retention programs, loan modifications, loan restructuring plans, and forbearance agreements.  And, when all else fails, we force your lender to court to correct their mistakes.

    It does not matter how far behind you are, the size of your mortgage, your income, your credit history, or if you have been unable to get help before. We have solutions, and we get results! We will talk with your lender, handle the paperwork, get an immediate stop to your foreclosure, then negotiate the best plan for you.

    Some of our programs include :

    Loan Modifications, Loss Mitigation, Foreclosure Financing, Lines of Credit, Reverse Mortgages, Forbearance Agreements, Loan Restructuring, Redemptions,  Hard Money Loans, Reinstatement Plans, Forbearance Restructuring, Short Sales, Bankruptcy chapter 7 and 13,  Short Refi’s, FHA workouts, the worst decision is no decision. Time is ticking! Submit your application and we will call you within a few Minutes and get your foreclosure stopped!

        

    Help Homeowners Keep Their Homes, and Lenders Keep Their Loans www. foreclosurelitigator.org

     

    Service Hotline Information Line: (866) 717-0415

     

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