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Will a Land Trust Stop My Property From Getting Foreclosed On?

“Dear Steve,

I’m falling behind on my mortgages (2 mortgages) since I can’t rent out my rental property for 7 months.

My income is not much to keep me upfloat and since there other expenses plus the devastating property taxes I’m really falling behind and having a hard time.

The property where I live was refer to foreclosure dept. but no sale date yet. (Please don’t, 9 of us will be displaced) I started making my attemp to modify since they are asking $18,062.00 to reinstate it.

My dilemma is everytime I called CSR has different style of gathering information and I have to hang up and get the information they needed.

This makes me confuse how to really proceed with this. I’m trying my best and sometimes thinks of looking for a modification lawyer who knows how to do the step by step process. Please help me I don’t want to loose another property in foreclosure.

Will a Land Trust save my property form being foreclose? How safe is this?

My friend highly recommend this for she lost a house in foreclosure already and put her other property into it and said her property is in Land Trust for 2 years already. She pays monthly fee of $500.00, plus the initial fee of $ 3,000.00”

money down the drain

Land trusts as a foreclosure trick have been highly discredited. A very prominent case filed by the Florida Attorney General against one such company has shown that the theory is built on quicksand. See this series of stories.

The attorney general’s complaint said the land trusts wrongfully guaranteed they could cancel the homeowner’s mortgage, misrepresented that homeowners can void their mortgage through a quiet title action, and charged an advance fee. – Source

If your friend that did this lives in Florida she might already be listed as a victim in this scam.

The underlying problem here is that while the consumer signs the property over to the land trust, the underlying mortgage still exists and the consumer is on the hook for that. Some people are now suing the land trusts to try to get the title to their property back. Because now the consumer is still responsible for the mortgage and paying a monthly fee on top of that to the land trust mortgage rescue company.

And there is of course the problem that any advance fee paid for foreclosure avoidance is illegal under the Mortgage Assistance Relief Services Rule by the Federal Trade Commission.

Maybe the reality of the situation is you simply can’t afford to remain in the property at this time?

If you can afford the regular mortgage payment plus a bit extra to get caught up on your mortgage, you might want to talk to a local bankruptcy attorney about a chapter 13 bankruptcy to prevent the sale.

If you are hoping to pay for some magical process to stop the eventual loss of your home you can’t afford, prepare to be scammed.

But if you want to know if there is even a mortgage modification program that your lender participates in that might be appropriate, contact a free HUD Housing Counselor and they can walk you through the process.

Mortgage Help

Be sure to first read How Not to Get Scammed by a Mortgage Loan Modification Company.

Debt-to-Income Calculator

First you’ll need to determine your current debt-to-income ratio. The target debt-to-income ratio under the Home Affordable Modification program is 31%. Use this free online DTI calculator.

Mortgage Modification Calculator

The mortgage modification eligibility calculator will ask you several questions and then show you which programs you may be eligible for.

The free mortgage modification calculator can be found here.

Free Mortgage Modification Help and Counseling

If you have questions about the process or eligibility you can call 888-995-4673 and get connected with an mortgage modification adviser for free. This help is provided by government subsidized HUD Housing Counselors and they can be a big help in navigating the modification process.

In order to assist you, the housing expert will need to gather some information from you. Have the following documents handy:

  • Information about your first mortgage, such as your monthly mortgage statement.
  • Information about any second mortgage or home equity line of credit on the house.
  • Information about the monthly gross (before tax) income of all household members contributing to pay the mortgage, including recent pay stubs if you receive them or documentation of income you receive from other sources.
  • Information about your savings and other assets.
  • Account balances and minimum monthly payments due on all of your credit cards.
  • Account balances and monthly payments on all your other debts such as student loans and car loans.
  • Your most recent income tax return.
  • It may also be helpful to have: A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.), if applicable.

You can also get free help and housing counseling from a local HUD approved counselor. You can find your local free housing counselor, here.

Contact Your Mortgage Company

Not sure if your mortgage company offers modification programs? Not all do. You can contact your mortgage company to ask them about mortgage modification programs you might be eligible for. Click here to find your mortgage company.

NPV Calculator

Want to know the net present value (NPV) of your home for the mortgage modification process? No problem, use the free NPV calculator to find out. The NPV calculator is right here.

The calculator can be used by homeowners who have been denied a HAMP modification because of their NPV result or can also be used by homeowners prior to applying for a HAMP modification to help them better understand the NPV evaluation.

No Advance Fees

The Federal Trade Commission has a Mortgage Assistance Relief Services Rule which prohibits advance fees for mortgage rescue services or mortgage modification help.

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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