The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Los Angeles -area residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:

Reinstatement 
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.

• Benefit: Does not require the mortgage company or lender's approval.
• Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

• Benefit: Allows the homeowner to make back payments over time.
• Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to 'qualify' for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

• Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
• Drawback: Requires that a homeowner 'qualify' for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property 
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

• Benefit: Allows homeowner to keep property indefinitely.
• Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

• Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
• Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Bankruptcy 
Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

• Benefit: Does not require lender approval.
• Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

Refinance 
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

• Benefit: In some cases, this will lower payments.
• Drawback: In today's market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only) 
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

• Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
• Drawback: Must be active military to qualify.

Sell the Property 
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

• Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
• Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

• Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
• Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options.

Investment Strategy - Real Estate Investment

TPG’s investment objective is identifying opportunities in real estate or real estate related investments.

Real Estate Investment Considerations:

• Identification and creation of opportunities
• Minimization of risk through diversification and careful investment structuring
• Balance current return and capital appreciation
• Intermediate Term, two to seven year holding periods, with average holding ranging from three to five years
• Clearly defined exit strategies for each real estate investment

Capitalize on Market Dynamics and Inefficiencies – TPG constantly monitors the real estate markets, identifying themes by asset class or geography. By focusing on these themes, TPG has been able to invest ahead of trends.

Favorable Current Cash Returns – TPG targets investments in assets that provide its investors with stable, favorable current cash returns.

Create or Exploit a Competitive Advantage – TPG believes that its reputation, built over many years, combined with its extensive network of relationships provides TPG with proprietary transaction opportunities and a competitive advantage in many situations.

Conservative Underwriting – TPG pursues a disciplined real estate investment approach identifying attractive opportunities with significant upside potential and controllable downside protection. TPG utilizes rigorous due diligence, conservative assumptions and careful assessment of downside scenarios before acquiring a property.

Prudent Use of Leverage – TPG aggressively manages the capital structure of a real estate investment, utilizing prudent leverage, obtaining financing on the best terms available in the market in order to provide transactions with increased downside protection.

Real Estate Investment Focus – Due to its size and reputation, TPG is presented with thousands of opportunities per year. However, it focuses only on deals that fit its strict real estate investment parameters.

Exit Strategies – TPG only commits to investments that offer clear, realistic multiple exit strategies primarily through refinancings, sales to private investors, institutions or public REITs. TPG believes that a disciplined approach at the time of investment enables it to better assess exit alternatives as they arise.

Purchasing a new home is a big step, especially for first–time buyers. Most people’s concerns center on affordability, so take a look at your financial situation.

Crunch the numbers to decide if this is the right time to buy.

Mortgage rates are historically low, and homes are well off their highs of a several years ago. That’s great for buyers!

With interest rates near historic lows, now is the terrific time to apply for a home mortgage or refinance an existing one.

Consumers must choose a loan that’s most appropriate for their financial circumstances. Here is an overview of today’s most common mortgages.

• Conventional Loans — Also Called Fixed Rate Mortgages

  The most common mortgages are fixed rate mortgages, where rates are stable for the life of the loan. This takes out all the guesswork, as borrowers will know their monthly payment throughout the life of the loan and nothing will change it. The most popular fixed–rate mortgages are 30 and 15–year terms. If you can afford a fixed–rate and plan to live in your home for 10 or more years, this may be the best option.

• Adjustable Rate Mortgages (ARMs)

  ARMs start with low rates for a specified period, and then fluctuate based on market conditions. The initial rates are significantly lower than fixed rate mortgages. However, borrowers must be prepared for the possibility of increased mortgage payments later. Because of the risk involved, ARMs are better suited for borrowers who plan to stay in their houses for shorter periods of up to 8 years.

• FHA Mortgages

  Home loans insured by the Federal Housing Administration (FHA) are generally designed for first–time home-buyers and others who face modest hurdles in securing a mortgage. FHA mortgages generally feature lower down payments, flexible requirements, and consistent rates throughout the entire term.

• Jumbo Mortgages

  For those who need larger loans than the conforming loan limits set by Fannie Mae and Freddie Mac — $417,000 for most of the country, and up to $729,750 in high–priced markets — jumbo mortgages are the way to go. Jumbo loans are higher risk to lenders and usually have higher mortgage rates and stricter mortgage criteria, including higher down payments and higher credit requirements.

Most markets changed significantly during the last several years, and they’re changing again. You need top representation to navigate today’s real estate opportunities and challenges.

Titan Pacific Group knows your market, and is keen on home valuations, comparable sales and negotiations, as well as marketing and home staging. Working together, you can place your home in the best light, and at the right price, that will have you packing for your new home.