INVESTORS SCOOP UP PRE-FORCLOSED HOMES FOR PENNIES ON THE DOLLAR

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) November 16, 2007 -- Once the foreclosure process has started, it is very difficult for a homeowner to stop it on their own. The foreclosing lender may offer a forbearance agreement or a loan modification but these options may not be feasible for the homeowner. If they cannot bring the loan current, the lender will complete the foreclosure process and take back the home. LeaseOptionProgram.com identifies these homeowners in need and matches them with investors. To qualify, a homeowner must have over 30% equity and a strong desire to keep the home.

To stop the foreclosure action, the investor buys the home subject to the existing mortgage. The investor now owns the home for the cost to bring the loan current plus closing costs. The mortgage stays in the name of the client but the deed transfers to a trust in which the beneficiary is the investor. While most mortgages contain a “due on sale” clause, the lender is unlikely to evoke it as they are simply happy to keep the loan out of foreclosure. The client then leases back the property at a payment that they can afford for one year. The investor keeps the loan current while the LeaseOptionProgram.com helps to repair their credit. At the end of the process, the client has an option to refinance and buy back the home at a price well below today’s value. This win-win solution gives a second chance to a homeowner in need and a tidy profit for the investor.

For example; a client with a home valued at $200,000 at today’s price and a loan for $130,000 is four months behind on their mortgage and is facing a foreclosure auction. An investor can buy this home subject to the existing mortgage for the $7,000 delinquency plus closing costs. If the client can afford only $1,000 in rent at the moment, and the mortgage payment with taxes and insurance is $1,300, the investor will have a total negative cash flow of $3,600 over the next 12 months. For $15,000 the investor owns a home with over $70,000 in equity. If the client exercises their option and buys back the home for $180,000, the investor will net over $30,000 return. If the client cannot exercise the option, the investor stands to profit even more.