https://www.youtube.com/watch?v=KqMxoNoy_hQ&feature=player_embedded
Are you in pre-foreclosure or can foresee yourself in foreclosure status in the near future? You are not alone my friend. There are government sponsored HUD counselors available for you in your area who can help you explore your options and choose the best one for your particular situation. Do this immediately as waiting may be consequential to your situation.
However, one option that HUD counselors may not discuss with you but is worth exploring if you are in pre-foreclosure is the “Produce The Note” strategy.
A few conventional options to stop foreclosure and stay in the home would be a refinance, modification, and a forbearance plan. The two popular exit strategies to avoid foreclosure would be a deed-in-lieu or the popular option, a short sale. Your HUD counselor should explain all of these options to you and recommend a particular plan depending on your specific financial situation.
One strategy to delay foreclosure which is not known or often discussed is the “Produce The Note” strategy. What this strategy entails is, the homeowner, whose home is in a foreclosure process, asks their banks to produce the original loan documentation when they purchased the home. It’s quite simple but surprisingly, a high number of banks are not able to come up with this information thus homeowners can delay banks from foreclosing on their property. There are no guarantees for this strategy as they may be able to “produce the note” but it is certainly worth giving it a try.
By using this strategy, some homeowners were able to stall their foreclosure process for years but keep in mind that delaying is not necessarily solving the problem. Choosing a short sale for your home will help you recover your financial situation much sooner than waiting and simply enjoying the free rent. A wise decision would be to exit the property on good terms with your current lender so you can have the chance to purchase a new home with your next lender who is able to see how you performed with your previous home mortgage.
Have you heard of the produce the note strategy? I would love to know what you have heard about the idea.
Peter
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Comments
Thank you guys for the information. My main purpose of this article was to guide homeowners to exit strategies rather than continuously stalling and exacerbating their financial recovery.
If the produce the note strategy does give a distressed homeowner some time to adjust to their financial crisis, it may be worth looking into to although Smitty just informed me that they don't have to produce the original anymore.
Good stuff!
If they know they owe the money, they need to solve the problem and not delay it, in my opinion. Move on, short sale, and go forward with rebuilding their credit.
New ruling recently that they dont' have to produce "original" documentation. As long as they have a copy of it, they are ok, but they DO need it in their possession.