42 Rules™ for Saving Your House From Foreclosure. A Practical Guide to Avoiding Foreclosure

135 Pages·2009·2.75 MB·English

by  David Coleman, Craig Triance

42 Rules for Saving
Your House from
Foreclosure
A Practical Guide to Avoiding
Foreclosure, Navigating the Loan
Modification Process and Keeping
Your Home
David Coleman and
Craig Triance
Copyright © 2009 by David Coleman and Craig Triance
All rights reserved. No patent liability is assumed with respect to the use
of the information contained herein. Although every precaution has
been taken in the preparation of this book, the publisher and author
assume no responsibility for errors or omissions. Neither is any liability
assumed for damages resulting from the use of the information con-
tained herein.
First Printing: May 2009
Paperback ISBN: 978-1-60773-038-5 (1-60773-038-3)
Place of Publication: Cupertino, California, USA
Library of Congress Number: 2009926406
eBook ISBN: 978-1-60773-039-2 (1-60773-039-1)
Trademarks
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service marks have been appropriately capitalized. Super Star Press™
cannot attest to the accuracy of this information. Use of a term in this
book should not be regarded as affecting the validity of any trademark or
service mark.
Warning and Disclaimer
Every effort has been made to make this book as complete and as accu-
rate as possible, but no warranty of fitness is implied. The information
provided is on an “as is” basis. The author, contributors, and publisher
shall have neither liability nor responsibility to any person or entity with
respect to any loss or damages arising from the information contained in
the book.
If you do not wish to be bound by the above, you may return this book to
the publisher for a full refund.
iv
Testimonials and Endorsements
When David mentioned that he was authoring a book on “saving
your house,” his only comment was “Hope you are not too
shocked…” Frankly, I wish I was. Miser or mogul, it seems that
everyone is going to feel this downturn if they don’t already. Just
today a friend confided that he doesn’t know how he’s going to
make his mortgage payment in four days. He and his wife both
have PhDs and they live in a very modest home. Apparently no
one is immune. Therefore, this is not a book about them. It’s a
book about us. David and Craig have compiled an excellent
resource that can only be written by someone who has gone
through the agony and is willing to talk about it with candor and
transparency.
This is not your parents’ real estate market. I recently read that
there is no longer a need for the neutron bomb. We already have
something that destroys people and leaves buildings intact. It’s
called a mortgage! But the practical insights in this book can help.
You are fortunate to have a copy in your hands. Take the wisdom
of 42 Rules to heart and then pass it along to a friend. They’ll
thank you for it. As an entrepreneur who is working on rule #43,
I should know.
Rick Heggem
Founder, Primarq Inc.
v
Dedication
To my wife Jennie who has had to suffer along with me through
this crisis and for her willingness to put up with a lot not only from
an old house, but with all the stress and sleepless nights because
of our mortgage. Since this is my fifth book, she is very used to
me working nights and weekends to frantically get a manuscript
done and takes it all with patience and good humor.
To Doris, “Tanta” Dungey thank you for your leadership and for
being the strong, clear voice of sanity in the mortgage market. We
miss you more than you know. To my wife Tammy for putting up
with my writing this book.
vi
Acknowledgments
Publisher: Mitchell Levy—for your “let’s make a deal attitude” as well as
your encouragement and support for my ideas (which are pretty crazy
sometimes).
Executive/Series Editor: Laura Lowell, executive editor for the 42 Rules
series. Thanks for all your encouragement, guidance, attention to detail,
and good humor.
vii
C o n t e n t s
Intro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Rule 1 Rules Are Meant to Be Broken . . . . . . . . . . . 12
Section 1 How Did You Get Into This Mess? . . . . . . . . . 14
Rule 2 You Need New Strategies for These
Uncommon Times . . . . . . . . . . . . . . . . . . . . . 16
Rule 3 Learn from the Past . . . . . . . . . . . . . . . . . . . . 18
Rule 4 What’s in Your Loan Paperwork
Can Hurt You . . . . . . . . . . . . . . . . . . . . . . . . . 20
Rule 5 Confronting Moral Hazards . . . . . . . . . . . . . . 22
Rule 6 Focus on Your Own Situation . . . . . . . . . . . . 24
Rule 7 Conventional Wisdom Will Not Help You . . . 26
Rule 8 Watch Out for Yourself . . . . . . . . . . . . . . . . . 28
Rule 9 Talk About Your Situation . . . . . . . . . . . . . . . 30
Rule 10 Go Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Rule 11 Reduce Your Debt . . . . . . . . . . . . . . . . . . . . . 34
Rule 12 Don’t Rely on Credit Cards . . . . . . . . . . . . . . 36
Rule 13 Your House Can Eat Your Retirement
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Rule 14 Home Equity Should Not Be Spent
on a Boat . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
viii 42 Rules for Saving Your House from Foreclosure
Section 2 Rules To Help You Dig Your Way Out . . . . . . 42
Rule 15 Check for Lender Mistakes . . . . . . . . . . . . . . 44
Rule 16 Don’t Keep Explaining . . . . . . . . . . . . . . . . . . 46
Rule 17 Be Persistent . . . . . . . . . . . . . . . . . . . . . . . . . 48
Rule 18 Control the Conversation . . . . . . . . . . . . . . . 50
Rule 19 Take Care of Yourself . . . . . . . . . . . . . . . . . . 52
Rule 20 Celebrate the Little Victories . . . . . . . . . . . . . 54
Rule 21 Make Yourself a Better Candidate . . . . . . . . 56
Rule 22 Always Go to the Top . . . . . . . . . . . . . . . . . . . 58
Rule 23 Get Help When You Need It . . . . . . . . . . . . . . 60
Rule 24 Question Your Assumptions . . . . . . . . . . . . . 62
Rule 25 Ask Them to Produce the Note . . . . . . . . . . . 64
Section 3 Options, Solutions, And Resolution . . . . . . . 66
Rule 26 Look at Some of Your Options . . . . . . . . . . . 68
Rule 27 Consider Investors, Partnerships, and
Lease Options . . . . . . . . . . . . . . . . . . . . . . . . 70
Rule 28 Bankruptcy and Foreclosure May
Be a Quicker Way Out . . . . . . . . . . . . . . . . . . 72
Rule 29 Choosing from Limited Options . . . . . . . . . . 74
Rule 30 Be Skeptical . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Rule 31 Take Advantage of the Situation . . . . . . . . . . 78
Rule 32 Get Partners to Help You . . . . . . . . . . . . . . . . 80
Contents ix
Rule 33 Never Throw Anything Away! . . . . . . . . . . . . 82
Rule 34 Check for Mortgage Violations . . . . . . . . . . . 84
Rule 35 Give Up on Your Credit Rating . . . . . . . . . . . 86
Rule 36 Patience, All God’s Children Have
Problems Now . . . . . . . . . . . . . . . . . . . . . . . . 88
Rule 37 Not All Loans Can Be Modified . . . . . . . . . . . 90
Rule 38 Once You Start Negotiating Be
Clear About What You Want . . . . . . . . . . . . . 92
Rule 39 They Just Want Your Money . . . . . . . . . . . . . 94
Rule 40 What Does Your Success Look Like? . . . . . . 96
Rule 41 Getting Off Your Sinking Ship . . . . . . . . . . . . 98
Rule 42 These Are Our Rules. What Are Yours? . . . 100
Appendix A Additional Background . . . . . . . . . . . . . . . . 102
Appendix B More Than You Ever Wanted to
Know About Mortgage Resets . . . . . . . . . . 106
Appendix C What a FICO Score Is . . . . . . . . . . . . . . . . . . 108
Appendix D An Idea of Closing Costs . . . . . . . . . . . . . . 110
Appendix E Lost Note and Other Legal Stuff . . . . . . . . . 112
Appendix F Additional Information, If You Want It . . . . 116
Appendix G Additional Professional Resources . . . . . . 118
Author About the Author . . . . . . . . . . . . . . . . . . . . . 122
Books Recommended Super Star Press®
Books .............................. 124
x Contents