Living the American Dream ...
Scott had perfect credit before going through a divorce and multi-year custody battle for his two children, contributing to missed work and income. As attorney fees mounted, Scott struggled to make ends meet, pulling equity from his home and vehicles to pay the bills. The perfect storm hit when in the midst of all this, health problems and huge medical bills set in and he soon faced bankruptcy and deeding his home back to the bank to avoid foreclosure.
Once the dust had settled, Scott wanted to provide a home again for his children but found himself in the same place so many of our credit customers are in - good people who have had something bad happen. Even though circumstances have been rectified, their credit was destroyed. He found a family member to buy a home and sell to him on a contract for deed, much in the same manner HPF helps our credit customers. He followed the exact same plan we devise for our own customers and began rebuilding credit, correcting errors, building sweat equity, and slowly his credit scores came back. After two years of doing all the right things, his credit profile went from one of the worst scenarios to being able to refinance into a 5.25% 30 year mortgage.
As Scott says, “If you want it and are willing to work for it, I am proof you can live the American dream and earn a home of your own”.
Helping To Re-build Lives ...
Rob is a disabled Iraq war veteran who took shrapnel from a land mine and is now permanently disabled. While Rob was in Iraq, his wife filed for divorce and disappeared, leaving Rob with all their bills on his military income. While the divorce dragged out for quite some time, Rob’s injuries prevented him from finding other work while going through the disability pay process. All these events lead to Rob not being able to keep his home as he let it go into foreclosure. With his disability income finally in place, Rob started rebuilding his life and remarried. What he didn’t have was someone to help show him how to rebuild his credit and give him a chance at home-ownership, even though up until his hardships, he had proven to be a responsible homeowner. Wanting to buy a home for his family but not knowing where to turn, he discovered HPF and was eager to be considered for the program. With our help, Rob is now in a house purchased by HPF, has established new credit, disputed old collections that are not his, and is in the process of qualifying for a VA loan. HPF was the stepping stone he needed to be able to own a home once again.
A New Lease on Life ...
Monica is a single mother with three children who has had kidney problems for many years while being on dialysis. A few years ago, her kidneys finally gave out and she was able to get a transplant. During the time she was recovering, beyond being off work and having medical bills pile up, she and her husband filed for divorce. During this period, the husband took out lines of credit in her name without her consent and max'ed them out. We hear the story of one spouse taking advantage of another’s good credit quite often and it is a hard situation because it is very difficult to prove the correct story to lenders. Often one spouse – usually the unsuspecting one – is left to either pay the bills or be forced into bankruptcy.
Worse yet for Monica, just prior to the final divorce, the husband committed suicide leaving Monica with all the bad debt. Instead of filing for bankruptcy, Monica has spent several years paying these debts off and is now back on her feet, waiting and needing someone like HPF to come along and help show her how to replace much of that old bad credit with new and improved credit ratings. HPF gave her that chance and Monica moved into her new home this fall, bringing her to tears the day of closing. She and her children are overjoyed with their new home and a chance to start fresh as her credit continues to improve. According to her personalized plan that Scott, her Credit Advisor at HPF designed for her, she should be able to refinance in the next 12-18 months to a lower interest rate, conventional loan.
Changing People's Lives ...
Juan was a sheriff’s deputy who became severely injured during an arrest almost two years ago and had to spend well over a year rehabilitating his body. During this same time his wife had a baby. With limited income, medical bills, and her being off work, they fell behind on their house payment and lost it in foreclosure. We started talking to Juan, helping him to clean up some past credit issues still showing outstanding and to establish new credit trade lines to take the place of that past poor credit - something that is a little tricky to do but crucial for anyone who has had credit issues. Credit scores are such that they provide a “snapshot” on that particular day, so whatever is reporting to that credit repository - current on time payments or only past late payments - is what the score reflects that day. Most people think, incorrectly, that just because they have their old bills paid off and are paying their utilities and rent on time (which typically don’t report), their scores will go up over time. This is only half the battle as they need to then establish new reporting credit trade lines. This is a challenge that most people give up on quite quickly because they need higher scores to obtain the new trade lines. We have worked with companies for years that specialize in re-establishing credit and can help these individuals start out small again and rebuild quickly.
We helped Juan and his family find new sources of credit and make sure that it is reporting on time now, replacing and minimizing all the old poor credit from a very difficult period in their lives. Our credit advisor, Scott, continues to have contact with Juan answering questions as they arise, and making sure tasks are being completed as they are saving for their complete down payment. In this manner we can really help folks who normally may take years and years to raise their credit scores and/or get back to the point of qualifying for a mortgage on their own.
Motivated and Focused ...
As you may know, one of the key elements to our program is finding credit customers ahead of time to go through our credit counseling program. They are then put on a waiting list where they continue to work on their credit until investment money comes in and allows them to find a home. A recent credit customer that was placed on our waiting list was a recently divorced woman who spent many years with an alcoholic husband who had a gambling problem. He drained all their life savings including their 401K before finally losing the house in foreclosure. She filed for divorce and bankruptcy and is now on her own, rebuilding her credit, and saving for a down payment. What’s interesting to us is her level of desire and ability to complete all our required tasks as outlined in her personalized plan that we designed for her. We deliberately create a large task list for each applicant so that a) all past poor credit is taken care of and the customer is put into the best situation possible for increasing their credit scores in the shortest period of time possible, and b) to see who indeed is serious by coming back to us with all the items completed. Everyone is given a large list but not everyone is willing to do the work needed to get their credit situation into the highest level possible. When all else is equal, we definitely focus on people like the woman above who came back to us within a week or two with all items completed (including establishing new credit lines on her own) and asked “what’s next?”. The motivation shown up front typically follows through the entire length of our program, from making monthly payments to us for a year or two until the time they can qualify for conventional financing on their own. It really is a wonderful and rewarding process for us to see the program work as planned for a customer.
Goals Reached ...
We had a single mother living in Milwaukee who had an excellent income but was struggling from past medical bills trying to find someone to help her into a home with her child. She had previously found a person who gave her a rent-to-own contract to live in the house; However, that person stopped making the mortgage payment and the lender foreclosed. Jessie had to start all over again. With our help, we put her on a personalized plan to be able to qualify for conventional financing in 12 months or less and found her the perfect home right across the street from her daycare and just up the road from her work. The added savings from gas and travel only helps assure she can stay with the program and soon refinance to a lower monthly payment. When the time comes for refinancing, we will help her with this too, brokering out a loan to help her find the best interest rate possible as we get paid from the lender who funds the loan. She will have completed the entire program cycle, including the credit counseling course, all within 12 months.
A Fresh Start …
Michael and Kristol from Milwaukee, Wisconsin, were homeowner’s who relied on Michael’s income as a home remodeler as Kristol was in school full time. In 2006, Michael had back surgery and could no longer run his business or perform the job he normally did. As the medical bills piled up, they began making late payments on their adjustable rate mortgage, disqualifying them from being able to refinance before the interest rate adjusted, raising their monthly payments yet another $475 a month. This continued for quite some time as they struggled to keep the home for their four children but eventually lost it in foreclosure. The problem was corrected when Michael went back to work full time for a heating and air conditioning company and Kristol graduated and was offered a position with the Milwaukee police department. However, the foreclosure record prevents them from qualifying for a conventional loan. When Kristol first inquired with HPF and explained their situation she was hesitant to believe a company would spend that much time helping them to re-establish credit and give them a second chance. She was in tears explaining all that had happened to them and how they lost their family home. When we explained we could enroll them into our program she called Michael who called us several times that day to thank us for helping them to start their life over again.
We entered them into the Home Path program and immediately started working to restore their credit. They went above and beyond everything that we asked them to do. When the perfect house came along, both Michael and Kristol were very emotional and thankful to Home Path Financial and their gratitude has shown with their on time payments and generous spoken words of appreciation to others. We look forward to brokering out their conventional loan when the time comes, knowing they won’t be going to just any other bank or mortgage broker in town.
Making Dreams Come True …
We had a husband and wife from Milwaukee, WI whose actual credit wasn’t all that bad, but their credit scores were low. It was a case where no one took the time to explain to them what they needed to do to re-establish credit and qualify for a conventional loan. We designed a personal plan for them like we do with every customer, and included items to be disputed with the credit repositories, some old items to pay off, and where to go to open new credit that reported on their credit reports. He had quit his well-paying job of 18 years as a manager at a large grocery store chain to dedicate his life to working with children and young adults with developmental disabilities. This happened at a time when his wife was still in school finishing her Master’s degree, their household income dropped and they acquired some large medical bills. While not too severe of a situation, their credit scores prohibited them from qualifying for any type of conventional loan, as she now finished her degree and just accepted a new job. They went through our program and I was there to meet them at their new house to sign the loan papers. I was talking to the gentleman as the wife pulled up with the kids in the car. As I put my hand out to introduce myself, she interrupted me and said tearfully, “I already know who you are, you are the man who is making our dreams come true”.
It’s these types of rewarding situations that we search for in our daily business - ones that benefit us, our loan customers, and our Investors. These people have paid on time every month and I know it is only a short period of time before we can help them refinance to a lower interest rate.
No other options…
Mr. H. owned a $280,000 home supported by the dual income of he and his wife who both always had perfect credit and prided themselves on paying everyone they owed, on time, and even ahead of due dates. When a divorce was certain, it was clear that neither could afford the house on their own and it was put up for sale as the divorced finished through the court system. Having only purchased the home a few years earlier there was not much equity therefore not much room to negotiate on the few offers that came to them during this period. The house went into foreclosure, ruining both of their credit. With very low credit scores and no other options, Mr. H. came to HPF asking if there was any way possible we could help him get a home for he and his two children so they could stay in their school district and not have to rent elsewhere.
HPF gave them the chance to not only purchase a lower priced home but with his sweat equity, Mr. H. improved the home and created extra equity and value, setting himself up to be able some day to upgrade back into the home of their dreams. Since originating this loan for Mr. H. in the spring of 2007, there have been no late payments and the credit is making its way back to where it was before the divorce. Many of the people we help have ruined credit due to divorce situations. Many of the people we help are single mothers who have lost their home in a divorce, are receiving the child support or maintenance necessary to afford a home but cannot qualify via normal bank credit standards. We offer a bridge loan opportunity for them to purchase the home now and work on repairing their credit for the future.
Raising their sons here…
Mr. N and his wife are both in their mid-seventies and he had major heart surgery about five years ago, ruining his credit. At the time they were faced with refinancing through a well known lender who gave them a loan to pay off medical bills at 12% interest. While he went back to work and was making ends meet, he got hurt last year and was off work for a couple of months and his loan went into foreclosure with the sheriff sale coming up in March of 2006. Even though he was back to work, they could not catch up on the amount owed and their lender would not consider allowing them to make larger payments for a year or two to catch up (often called a work-out program) because they did not show on paper the monthly income to do so.
We found through the interview process that they had raised their sons in the house and would do anything to keep it - even if it meant finding another job (they both already worked full time jobs). After meeting with them that night, I knew this was a good loan. I gave them the money to not only catch up the 1st mortgage but also consolidate a handful of other small charge cards and bills so that their new monthly payment would not be much higher than their budget already was accommodating.
They paid us on time for the entire 12 months as dictated by their personal Plan that we developed for them and have done everything we asked them to with their credit and their property so that today their credit scores are much higher, their appraisal is higher, and we were able to refinance all their debt (including our loan) into one, lower interest rate loan with one of our national wholesalers.
This is a good example of how we can go into a situation for a short term, collecting origination fees upfront into the loan for our profit, help fix the problem, counsel the customer on what to do, and have our money back to be used again for the next loan all within 12 months or so. It’s very rewarding to help people that other banks overlook just because the scenario doesn’t fit their normal parameters. I can’t tell you how many times I have had customers crying at closings in gratitude and have received letters of thanks. I figure if we are going to be a lender, why not be one that is able to help people more than most. I have been in the “credit-challenged” lending business now for over 20 years and I’m very good at knowing who pays and who does not. And for those who do not pay, we very aggressively get those houses back and remarket to a waiting list of new home buyers in our program. These home buyers are currently working on their credit, waiting for either one of our houses to become available or for their scores to come up high enough to buy any home. Most lenders do not offer this service and just write off small bad loans contributing to losses. We turn our losses into opportunities for other new home owners.
Thinking outside the box…
I would like to outline a loan we closed in 2005 to show how we think outside the box and handle loan requests that don’t necessarily fit our typical guidelines but just make sense to do. We had a client with a very nice house that had fallen into foreclosure so he listed it for sale in hopes of saving some of the $30,000 in equity that was available in the property.
Most banks will not refinance a property that is listed For Sale so he was having trouble getting help on refinancing the troubled 1st mortgage loan. Also, because of the foreclosure judgment, now his credit scores had dipped below 500, the absolute minimum required for most bank and mortgage companies. While he received an accepted offer from new buyers to purchase his home, the house was scheduled to go to sheriff sale two weeks from when this customer was referred to us by the local Realtor.
HPF worked out a resolution with the first mortgage lender whereas they would accept half of what was past due along with attorney fees to postpone the sheriff sale using a small, 2nd mortgage through HPF. We collected a 13% interest rate for those couple of months along with several points on his loan. We had a solid position because had the home sale fallen through and he was not able to resell the home, the first mortgage lender would have simply completed the foreclosure without having to start over from scratch and we would have been paid at the sheriff sale. So for a short term loan that no one else would lend to him, it proved profitable for us and post-poned his sheriff sale long enough to close the sale of the home and help him retain most of his equity. This is an example of how we try to close loans that are a win-win for both the homeowner and HPF.
No Coincidences…
As part of our process of finding people homes, we also use our own inventory of homes to complete that search, financing the home buyer through IMS. One such house in our inventory was originally a home that was foreclosed upon by a local bank and the property was now listed for sale by us with not much activity for 45 days. This was odd to me because the home was updated and priced attractively. About that time, a very excited man called in and said that this house was his recently deceased mother’s home and besides being very close to her, he and his siblings had grown up in this particular house and it was very dear to him. After his mother passed away and the bank began foreclosure proceedings, he and his wife tried very hard to buy the house from the bank but due to some past medical collection accounts and the fact that he had not re-established any new credit over the last several years, his credit scores were artificially low and he was denied all of his loan requests. With no luck in finding financing and then seeing the house sold to someone else they had given up hope. He explained all this up front and asked if there was any way we could work with him to finance the house for him and I told him yes, that is our main core focus here at HPF, to work with good people with strong incomes to re-establishing their credit.
Being overwhelmed with joy, he then went on to say this must be a miracle because the timing and way he found us was incredible. He works at a local manufacturing plant and as part of his normal day uses the locker changing room there and that day he just happened to look down at the bench to a newspaper that was left open to the Houses for Sale classifieds section and the address just jumped out at him - “that’s my mom’s house!” he said out loud and called our number.
So in the end, the timing was perfect to direct them into the house they wanted in a way that made sense with a company like ours that takes the time to help people. Needless to say, the day we closed that purchase transaction both he and his wife were in tears. They have completed our workbook, re-established new credit accounts with our help, and we are now waiting for their credit scores to reach a level that will allow us to refinance their loan to lower monthly payments and give us our capital back so we can help the next customer.
In the family for over 100 years…
A woman in her seventies was referred to us in hopes of saving her home from the foreclosure sheriff sale. Upon interviewing her, we found out that the home was originally built by her father and she and her siblings were raised in this home as she stayed there until her parents passed away. She then raised her own family of three daughters in this same house and is living her life there even now as her husband had recently passed away. With the added medical expenses from her husband’s illness and now without his income, she fell behind on the house with no way of bringing completely current the loan to stop the sheriff sale. There was definitely enough equity for her to simply put the house up for sale but as she stated, the home was her life. And she wanted to desperately to stay until the day came when she could give it to her youngest daughter. We refinanced the home in order to stop the foreclosure, set her up on monthly ACH payments that coincided with her social security payments, and she has since made every payment on time, soon to refinance to a lower monthly payment. We continue to attract and close the types of loans that change people’s lives.
