When you've been in the mortgage note industry for a little while you'll learn a few things that you weren't expecting. One of those things involves getting the homeowners you are working with to give you're their information!
Getting information from the homeowner going into foreclosure can sometimes be worse than working with the bank. Most homeowners just aren't familiar with the steps involved in a mortgage sale, even though they themselves have a mortgage. On the other hand, as the property investor you'll be asking them for a lot of information, some of it quite personal in order to put together a packet for the bank and the hardship letter. As a result the homeowner can become as stubborn as a mule when it comes to giving up information.
Here are some of the more common pitfalls of working with a homeowner with an information problem:
?They have no idea where they've placed all of their important documents
?They haven't filed tax returns and so can't give them to you for your own package to the bank.
?They just don't understand why they need to give you all of the information if they are in default.
Try not to lose your patience with the homeowner. They aren't familiar with these processes, which is part of the reason you are there in the first place.
The homeowner just needs to be made aware of the fact that the bank will make a major write off on this mortgage in the short sale or the mortgage note sale on the property. That means you'll need lots of information to back up your proposal and to convince the bank to take this deal.
Explain to the homeowner, that the hardship letter that you put together for the bank is one way of providing the evidence you need to convince them to take a short sale. It shows in dental that the homeowner hasn't been earning enough income to be able to pay their mortgage. Thus, you'll need the homeowner's tax returns as further evidence to back up the letter. Be sure to explain this in detail to the homeowner so they really understand the reasons behind your need for lots of their personal information.
The banks really do care about the homeowners that are in genuine hardship. So the hardship letters that you are putting together are very important. The bank will be able to look at the letter and the evidence provided to confirm that your homeowners just couldn't make payments because of medical bills, loss of job, loss of income or other reasons. If it looks like the homeowners didn't make their mortgage payments because they just didn't feel like it, the bank will not agree to a short sale.
If you take the time to answer all of the homeowner's questions and thoroughly explain your need for their personal information, you'll find it's much easier to work with the homeowner in default.
