American Homeowner Preservation (AHP) announced today it has completed a mortgage modification for a Chicago family, ending their 3-year mortgage nightmare that almost ended in foreclosure. By working with AHP, the family was able to reduce their monthly mortgage payments by 54%, reduce their mortgage principal by two-thirds and settle their delinquency at a 96% discount. With these modifications, the family was able to avoid foreclosure and stay in their home.
The married couple fell into arrears on their mortgage when the husband was laid off in 2010 from his 15-year job as a professional house painter. Despite a dogged search, he was only able to find temporary part-time work because of the depressed job market. The wife’s wages as a school security guard just weren’t enough to make up the difference, so they fell behind on their mortgage payments.
The family’s experiences working to resolve their difficulties with their lenders were typical of others in the same situation: as soon as they thought they were making progress toward a loan modification, the lender lost their paperwork or sold their loan, eliminating credit for payments they had made and requiring that the whole process be restarted. The family tried to modify their mortgage or refinance with their original lender plus three additional lenders, but none of their efforts was successful. By the time they received an offer from AHP, they had all but lost hope they could ever stay in their home.
After carefully researching AHP, they called to discuss their options. “This family was intent on staying in their home, and AHP wanted to help them accomplish this,” says Jorge Newbery, Founder and CEO of American Homeowner Preservation. “In their case, we were able to offer them a substantial reduction on their principal, from $177,000 down to $60,200. Further, we settled the $70,000 delinquency for $2,500, spread over two installments. Finally, we dropped the monthly payment from $1,508 to $700. The results are financially transformative for the family and generate strong returns for our investors. This really is an example of our ability to create a positive outcome for everyone concerned—the family, the neighborhood and our investors – while avoiding all of the negatives that accompany a foreclosure.”