Request: Applicant residing in principal residence was in need to address and payout a Genworth collection resulting from a foreclosure deficiency balance from a rental house from years back. Principal residence is owned and occupied with spouse….Genworth collection stemmed from rental house owned solely with a brother. Failing to address the collection from the rental house was going to threaten the foreclosure of the principal residence. You can imagine how happy the wife was to be using the equity in the matrimonial house to settle a debt for her husband and his brother.
Challenge:
- Proceeds required from a mortgage refinance to payout a large collection resulting from a foreclosure with a new foreclosure looming.
- The Genworth balance and account was assigned to a lawyer’s office who was executing the demand and preparing for legal action should the debt not be settled
- The outstanding Genworth deficiency balance was $261,000.00
- Income was limited as the wife was only part time employed even though the spouse was full time employed
- Credit was very bruised and beacons both well below 600
- TDS and serviceability was much challenged based on verified income. Reviewing bank statements reflected the applicants were living in overdraft and living beyond their means even before the new mortgage was arranged to address the refinance
- Property located in smaller residential community which limited lenders
Results:
- DLC agent assigned the file to Plan B on a Monday where Plan B took on the file and reviewed the situation the same day
- Initially Plan B decided to not take this file on based on a review of clients personal bank statements, spending habits and running balance (or lack thereof)
- Upon further review and planning Plan B created a plan that would have addressed the collection, consolidated some debts to improve the monthly cash flow ….. the deal now made sense IF the debt could be negotiated and settled for a dramatically lower amount
- Plan B reviewed the “plan” directly with the clients and they agreed it made sense, that it improved their monthly financial situation and gets the looming collection of their back….if it can be settled. Clients gave Plan B the authorization to negotiate directly with the lawyers in efforts to settle
- After a week of negotiation, the $261,000 collection was settled for $70,000.00 !!!!!!!!!!!!
- With the plan and settlement in place, Plan B set out to find the best 2nd mortgage approval
- Approval was located 7 business days after receiving the file from the DLC agent
- Client was thrilled and relieved with the outcome and the general improvement of their financial situation
- Referring broker offered to reduce the broker commission in efforts for the applicants to receive larger net proceeds
- Referring DLC agent received 87bps, a happy referring client for life and massive amounts of saved time