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January 6, 2018

Money Problems Snowball

This past week I was contacted by a client that had done a private deal back in early 2015. At the time, his finances were a little shaky – lots of unpaid bills, spotty income, periods of unemployment, resulting horrible credit. Because the picture was dark – the deal could not go to a bank or institution. It had to go private.

Because the number of unpaid bills was high, we had to go right to 85% loan to value in order to get him on solid ground.   Borrowing to this level in these dire circumstances is more expensive, as most lenders will not do the deal. The ones who will lend expect a higher interest rate to compensate them for risk of default.

And in early 2015 this is where I left the client. After the new private second mortgage, his financial situation was
stabilized. He had breathing room – time to get his life sorted out, his credit improved, and then the plan would be to
consolidate both his first mortgage (with a bank) and the new second into one larger first mortgage. Once consolidated, pretty much all that would remain of this speed-bump in his life would be a slightly higher mortgage payment.

Fast forward to today, nearly 3 years later. I had not heard from the client in the time since. He had not responded to
my follow up emails.

Then suddenly I heard from him again, just after New Year 2018. And unfortunately it was not good news:
– started missing mortgage payments back in the summer;
– lender eventually sent him a Notice of Sale, which he ignored;
– lender eventually sent him a Statement of Claim, which he ignored;
– lender eventually sent Sheriff to evict him from house;
– evicted and living in a hotel, lender eventually sent notice giving him one last opportunity to collect his possessions;
– house eventually listed for sale by lender;
– Realtor has Open House for house;
– house is sold.

Regrettably, it was after the house was sold that the client first chose to contact me, asking me if there was anything anyone could do. Months had passed since he started missing payments. Many notices were delivered informing him that unless he made payments, he would lose his house. There are many times during this process that if you just pick up the phone and call, we can usually quickly start a process to stop the Power of Sale action – and get your life back to normal.

But if you wait long enough … eventually there is no more time.

As it says on the “Rates” page of this website, there is no debt instrument as expensive, than not paying your bills as
they fall due – as penalties and interest on credit cards, mortgages, and other debts usually inflict nasty charges when
you do not remain current on your obligations.

So if you are reading this right now, and your bills are going unpaid – time is not making this better, it is making the
amount you owe grow exponentially. Burying your head in the sand is making the problem far worse. If your money problems are piling up – you should call me right now, and let’s discuss a refinance.

Do not wait. The sooner you call the easier & cheaper a refinance can be.

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