BATTLECALL GUEST EXPERT: Tom Domin, Mortgage Marketing Toolkit

You need to read this entire article...you'll be surprised at the answer!

Yes...the number of foreclosure filings is significantly higher than last year. In fact, it's nearly double what it was a year ago. And, it isn't anywhere close to being over as hundreds of thousands of foreclosures have yet to be filed.

There are some estimates that place the number of foreclosures at close to one million over the next couple of years. This is a huge number and will undoubtedly impact our economy and mortgage business in more ways than we realize.

In all of this, there many people that are recommending that the government step to the plate and not only support...but, rescue those distressed homeowners. In the weeks to come we'll see the proposals for action taking shape that enable Fannie Mae, Freddie Mac, and others to address this issue.

If a bailout is proposed, it's important to analyze the real circumstances that have led to the rising foreclosure numbers we are seeing today. There are at least four (4) distinct groups of people who are...or soon will be...facing foreclosure. 

1. There are those people who can't make their mortgage payments because they have had a major life style change due to major unexpected expenses, a loss of income due to health problems, a death in the family, or a job loss.

It is this group of folks that would normally file for foreclosure and are not affected by the current mortgage meltdown. 

2. There are those people who didn't understand (or, didn't want to understand) their loan repayment obligations and what would happen when their rates adjusted. Many of these people failed to read and/or comprehend their loan documents. 

3. There are those people who knowingly committed fraud when they submitted their loan application information. This group of people includes investors and speculators who falsely stated that they intended to occupy the property they were purchasing.

They knowingly misstated and overstated their income and other financial information when they applied for loan programs that did not require full documentation. 

4. There are those people who are in deed victims of mortgage fraud. Some were outright deceived and misled by mortgage brokers and the loan officers of unscrupulous lenders. Some paid outrageous closing fees, high mortgage rates and then were saddled with an adjustable rate mortgage. 

We'll find from the upcoming discussions, that it's possible that there will be differing sympathies for each of these groups and whether they should be included in any kind of bailout proposal. To solve this problem...we just easily and quickly say "yes" to everyone that goes through the foreclosure process. And this is how this might work...

With guidelines set by Washington, we let FEMA do the job. They already have an organization and staff positioned across the country ready to respond to disasters. When notified of the completion of a foreclosure they take a short application, verify the foreclosure, and quickly issue approval of money that is then automatically deposited into the customer's bank account within some three (3) or four (4) working days.

The file is reviewed in detail after the fact for possible abuse and/or fraud by the applicant, the Lender of record, or any third parties involved in the original mortgage. Legal action is initiated by the Attorney General as required.

The maximum amount of monies that can be received under this program is capped at $25,000. It is meant to "assist" those that have gone through the foreclosure process and help them get started again. It is not a "bailout" meant to pay-off the mortgage. They will also share in monies re-cooped from any legal actions. The monies received are classified as a "grant" and do not need to be repaid.

And yes...we do write checks to people in distress. We have done that for many years using FEMA as the vehicle and these same guidelines. It works...I should know...my house was destroyed by a hurricane many years ago and my insurance company went out of business in the process.

The "grant" money helped me to start over again. Yes...we do help people in distress because this is America and this is truly the "American Way."

About The Author: Tom Domin has over twenty-five years of experience in sales and training in Real Estate and as a Licensed Mortgage Broker. He is currently publisher of "Tom's Mortgage Tips" a twice monthly Mortgage Newsletter for Mortgage Professionals. You can sign-up by visiting http://www.mortgagemarketingtoolkit.com

Got an opinion? We want to hear from you. Post your thoughts or comments here in our Mortgage Warrior Forum. Come join the conversation and say hello...onward mortgage warrior!

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