As I sit writing this article, my adrenaline is still flowing from the feeling that our team just experienced this past Friday for the 25th time in four years: saving a family’s home from foreclosure as time was running out. This is the story of the Torres family from Miami, Florida. They were two weeks away from losing their home on the courthouse steps when I received an email on a Saturday afternoon from one of our banking referral partners. I immediately went into urgency mode once I spoke to their son, who was my initial point of contact.
My first objective was to determine whether there was enough equity to liquidate the $80,000 mortgage plus $40,000 in penalties. After doing my own comparable search through MLS and RealQuest, I determined the value would be tight but sufficient at $260,000 to meet our objective.
My next objective was to meet with the family face to face in their home to discuss the process of counseling and inspect the home to ensure there were no circumstances that would prevent a successful FHA appraisal from being completed (i.e., peeling paint, unpermitted work, illegal additions, extra kitchens, security bars on the windows, etc.). After meeting with the family, I determined that the home was in great shape and they were ready to schedule counseling in Spanish. I reviewed the counseling booklet with them and helped them prepare a monthly household expense and income list for counseling.
Next, I wrote a letter to their attorney explaining what we were going to attempt, so that he could petition the judge overseeing the foreclosure to secure a 30-day extension to give us enough time to complete the reverse mortgage. Along with the letter, I included a loan comparison reflecting the funds available to pay off the lender. Within 48 hours, the judge granted us a 45-day extension to complete the process.
Counseling was completed immediately, an FHA case number was issued and an appraisal was ordered. The determined value of $266,000 gave us enough additional funds to cover the renewal of their annual insurance policy for the next year and leave a $2,020 disbursement at closing.
The loan package was signed and the necessary documents were submitted to underwriting with a copy of the judge’s order to extend the foreclosure sale to May 31 so the underwriter would be thoroughly informed of the file’s urgency. Within 48 hours, minimal conditions came back that we immediately handled, and appraisal conditions were resolved by the AMC and its appraiser.
And then, that magical thing happened: We got the “clear to close.” It was time to coordinate the final process. At this point, the family was ecstatic but still in disbelief because they were so close to losing the home they had lived in and loved for more than 30 years, the home where they raised their children and where they were caring for an elderly parent. I suggested that as many family members as possible attend the closing celebration we had planned on Friday afternoon.
On that final day, the family gathered in our office to sign the closing documents. When it was all over, the relief on their faces was priceless. As we do at all the closing celebrations that we like to do for our clients, we toasted to the family with Martinelli’s Apple Cider and enjoyed cake before reading the family a letter from our staff expressing how privileged we felt to be able to assist them in saving their home. It is a tremendously satisfying feeling to know that we were able to work with this family to help them find a solution to their problem.
Over the last four years, my team and I have helped families navigate all sorts of challenges in order to keep their homes. We’ve helped clients negotiate short payoffs on second lien defaults and first lien defaults with hard equity lenders; made sure that their homes met the minimum FHA standards; and talked at length with their legal advisors, financial advisors, children and extended family members.
We have become experts in reverse mortgages. We take the time to continually educate ourselves and our staff on the details of this great product. We regularly participate in NRMLA meetings and we speak publicly about the benefits of a reverse mortgage to anyone who is interested. We do all of this because we have experienced firsthand the HECM’S tremendous power to help people like the Torreses. We have seen that, although every home has a dollar figure attached, the value of knowing you have been saved from foreclosure is priceless.
