Table of Contents. A Brief Introduction... 5

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1 Table of Contents A Brief Introduction... 5 What Is A Short Sale?... 8 A Good Short Sale Candidate... 9 Average Discount Amounts VA and FHA insured loans The Short Sale Package Hardship Letter W2 s, Bank Statements and Paystubs Listing Agreement Purchase Agreement Comparable Market Analysis List of Repairs and Pictures Estimates Net Sheet (HUD1) Authorization To Release Information Creating Huge Discounts With Little Work How To Get Property Owners To Call You Finding Foreclosure Lists Direct Mail Newspaper Ads Signs Telephone Door knocking Approaching The Lender Closing Remarks Example Forms Authorization to Release Information PURCHASE AGREEMENT... 29

2 LIMITED POWER OF ATTORNEY Sample Hardship Letter Sample Repair List Direct Mail Examples... 45

3 Disclaimer: The information in this report is not intended as legal or financial advice. The purpose of this report is to educate. The author and publisher do not warrant that the information contained in this report is fully complete and shall not be responsible for any errors or omissions. The author or publisher shall have neither liability nor responsibility to any person or entity with respect to any loss or damage caused or alleged to be caused directly or indirectly by this report.

4 A Brief Introduction More than likely you have heard the terms Short Sale or Foreclosure while reading up on real estate investing. Foreclosures have been a hot topic because of the huge numbers of defaulting loans. Within the recent years of housing price increases, easy qualifying money and adjustable rate mortgages have lead to some of the highest foreclosure rates ever seen. Now is the best time to hit those lenders for huge discounts. When a person gets a loan to purchase a house or take out equity, they normally sign a note personally agreeing to pay back the loan and also a security instrument called a lien. A lien is used by lenders to secure the loans in case of non-payment. Lenders will be able to take ownership of the house and try to recoup their money by reselling the house. The process of taking ownership of the house is called foreclosure and varies from state to state. Each foreclosure procedure will take different amounts of time to complete. In some states, foreclosures will only taking 21 days and other states taking up to a year. Foreclosures have a type of lifecycle. Normally it starts with the owner not paying on the loans for 30 to 60 days. Once payment has not been received for a time period, the loan goes into a department within the organization call Loss Mitigation. Loss Mitigation will make several attempts to contact the owners trying to work out an arrangement to

5 bring the loan current. If all attempts to bring the loan current fail, than state foreclosure procedures will be started. The house will be sold at auction to the highest bidder. In the case where no bids are received at auction, the foreclosing lender will gain ownership of the house and can sell the house for any price to recoup their losses. Owner Stops Loan Payments 30 to 60 Days Of Non Payment Loan Is Transferred To Loss Mitigation Department

6 Foreclosure Notice State Foreclosure Procedures Initiated Scheduled for auction. Sold At Auction To The Highest Bidder.

7 What Is A Short Sale? A short sale is when a lender will agree to take less than is owed to remove the lien. Normally you will have to build up a case for the lender to take a discount. This can be done in several ways to show the property to be worth less than originally anticipated by the lender. The better the substantiating information you can give to the lender then the bigger the discount. Lenders have also been known to sell the note at a discount. This is not the same as a short sale. The note value remains the same while they sell it to you for less. For example; a note could be worth $100,000 and the lender will sell it to you for $50,000. The note and lien is still on the house with the value of $100,000.

8 A Good Short Sale Candidate Owner must qualify for relief of debt. The owner must show some financial hardship before the lender will agree to accept less than what is owed. There are plenty of ways to show hardship by including a letter from the owner describing their situation, paystubs, bank statements, overdue bills and so on. By including these types of supporting evidence you can build a great case for why the owner has not been able to keep up with payments and why they will not be able to bring the loan current. The loan service must be able to participate in a short sale. Most of the times when you talk to a lender or loss mitigation representative, chances are they do not actually own the loan. They may have originated the loan but sold it off to a third party and continue to service it on behalf of that third party. The short sale approval will be accepted or rejected based on that third party. The property is worth less than what is owed. Lenders will take a hard look at the property value when determining whether they will accept a discount or not. Normally the lender will have a real estate agent drive by and formulate a Brokers Price Opinion (BPO) based on area comps. The agent will normally do a drive by analysis without seeing the inside of the house. You can normally reduce the perceived value by meeting

9 the agent with your own comps and pointing out all the defects of the house. Average Discount Amounts There is normally a rule of thumb when it comes to the amount of discounts a lender will take. Granted this may be changing really soon with lender s housing inventory increasing every month. Typically, you would find a first lien holder accepting 82% of the perceived value of the house. This is the value that the lender puts on the house. You can expect a greater discount when dealing with junior lien holders. Sometimes they will take pennies on the dollar because they understand they will have their lien wiped off at the auction and be left with unsecured debt. VA and FHA insured loans A lot of times you will see loans that have been insured by the government. VA and FHA loans will take less of a discount because they are insured. You can see a VA loan looking for at least 91% of the as is value of the house. FHA backed loans will want roughly 82% to 87% of

10 the as is value of the house. The value of the house is one of the most critical aspects in any short sale scenario. Reduce the value perception and gain bigger discounts.

11 The Short Sale Package This is the make or break of your short sale proposal. You must set the stage to show the bank why it is in their best interest to take a discount now rather than later. Prove how they will make more money by releasing the lien now rather than going through a costly foreclosure and terrible resell market. Common items in a short sale package Hardship Letter 2 Months of Bank Statements 2 Months of paystubs 2 Years of W2s Listing Agreement Purchase Agreement Comparable Market Analysis Estimated HUD1 Authorization To Release Information Form Repair Estimates Pictures Supporting Repairs Hardship Letter Most lenders will want to see that the home owner has had financial hardship. They want to see that the home owner cannot make payments

12 and will not be able to catch back payments up. The letter should be written by the homeowner themselves. Simply ask them to describe on paper what happened and what their current situation is. I literally had one home owner write up a 20 page hardship letter describing everything in detail. The more details the better for your proposal. W2 s, Bank Statements and Paystubs Include all financial supporting evidence to back up the hardship letter. Include the last 2 months of bank statements and paystubs if they are working. If they are not working then type up a letter stating that no paystubs are included because they are unemployed. Listing Agreement Banks like to see that the property properly marketed for sale by a real estate agent. They want to see that the home owner did everything possible to sell the house before asking for a discount. Purchase Agreement

13 The lenders will normally want to see a valid offer to purchase before going through the decision of discounting. Comparable Market Analysis Foreclosing lenders will have had a Brokers Price Opinion done by a real estate agent within the area. To lower the perceived value of the property, you will also want to submit your own market analysis using lower priced comps sold within 6 months or less. The whole idea behind the short sale proposal is to reduce the perceived value of the property. In the current market, showing the days on market will help your proposal incredibly. The lender needs to get rid of their foreclosure inventory as fast as possible. In some areas, houses are not selling for over a year and that is a great incentive to discount. List of Repairs and Pictures To continue to lower the perceived value of the property, list all repairs needed, the costs to make those repairs and pictures showing the repairs. This will show the loss mitigation representative that the house would need repairs to bring a full value. Estimates Net Sheet (HUD1)

14 The bank wants to know what they will net after all closing costs and discounts are done. This is the bottom line figure that they will decide whether or how much of a discount to proceed with. Normally you would use a HUD 1 sheet to display all transaction fees. The owner must not be shown as receiving any money. If the lender sees the home owner receiving money then your short sale request will be killed instantly. Authorization To Release Information This should be the first form you fax to the loss mitigation representative. They will not be able to talk to you regarding the loan specifications without it. The property owner will sign this form giving the bank permission to speak to you regarding the loan information.

15 Creating Huge Discounts With Little Work A short sale proposal can be work intensive when dealing with first lien holders. They become easier and less work when you start targeting junior liens like 2 nd, 3 rd and 4 th lien holders. Targeting properties with large junior lien holders can be very, very profitable with a lot less work. Junior lien holders know their liens will be removed when the senior lien holder goes to auction. They are prepared to take pennies on the dollar to remove their liens. You must remember, even though the junior lien holder removes the lien, the debt is still out there. It is merely unsecured debt like a credit card. One example that comes to mind was a house worth around $225,000. The property had a $75,000 second mortgage on title with a $125,000 first mortgage. The first mortgage holder was foreclosing which would leave the second mortgage holder with unsecured debt. One call to the second mortgage holder and they discounted it 50%. That was just one call without doing any type of short sale packet.

16 How To Get Property Owners To Call You Now that you understand more about a short sale and how the liens are affected by the foreclosure process it is now time to start working on your business. There are several methods you can use to get property owners to call you. In fact, using several methods at the same time will help increase your profit margins. Foreclosure investing is about building relationships. It is a difficult niche in real estate investing and a lot of people find this out the hard way. You really need to build a relationship with the property owner and the lenders. Building trust is crucial in all facets of these transactions. The property owners need to trust that you can do what you say you will. The lenders will need to trust that you are able to do what you say you will do. It takes patience and persistence to make serious money in foreclosures. Finding Foreclosure Lists You can obtain lists of properties in foreclosures through various ways. It will depend on the state foreclosure laws. Some states you can find all the information you need within the county register of deeds while other states have everything in public newspapers. The best thing to do when starting out is to go to a local Real Estate Investors Association and start talking to people. There are usually people there that can steer you into

17 the right direction on how to obtain lists. You may even find services that provide weekly foreclosure lists for a nominal fee. These lists would save you the time that it would take to generate your own list. Direct Mail A great and easy way to start contact with people in foreclosure is through the mail system. People make tens of thousands of dollars using simple letters and postcards. You can really target the best prospects with the most equity or equity potential through discounts using this method of marketing. The hardest part of direct mail is to get your letters opened by the recipient. By creating a campaign where you mix postcards with letters and even changing up the envelopes will increase your odds of the recipient reading your message. Always use a live stamp and a handwritten font for the envelope. To be more effective, it takes quite a few mailings to get a lead to call you. It normally takes 7 to 10 mailings for one call. It is best to set up a system of mailings that will take the foreclosure timeline in your state into consideration. The longer the timeline it takes the longer period between mailings. You really do need a system to help you organize your mailings and leads. After doing it by files and finding it nearly impossible to keep up with the new foreclosures, the mailings and phone calls I opted for a software system which makes life so much better.

18 A two step marketing campaign works really great with direct mail. You can make the initial contact with the property owner by giving them something of value for free. Make it something that they will really need. By offering them something irresistible they can t help but make contact with you. Not only will they contact you, but also start building a relationship with your prospect that could lead to big money. I like to start building my relationship by giving my list of property owners a credit repair manual. Maybe it is more like a book since it is over 80 pages. I also have a guide to credit manual with over 170 pages that explains more about credit that I also give away. You think they may be interested in one of these manuals enough to call? My responses increased a lot by offering these types of incentives to call me over the other pack of foreclosure investors that were also sending mail. You can even send them a few pages in the mail with a contact number where you they can get the rest of the manual for free.

19 By giving them something of value you are also setting yourself up as an expert. I can t tell you how many owners called me back asking me more questions. Special Note: Make sure you keep track of all mail that comes back. A lot of times they come back because the homeowners have moved away. These are some of the best leads you can possibly get and should be concentrated on. Newspaper Ads This also works really well depending on your area. You really need to be prepared for a lot of calls. It is always best to have an automated setup to take calls or direct people to your website. You can use a voice mail system, a separate cell phone with voice mail or a website to direct this type of traffic. This is called a shot gun marketing approach because your leads are not targeted. Meaning you get a lot of bad leads and must sort through to find those diamond deals. I can do this easily because I incorporated a software system into my business. It only took me once to figure out that taking calls from these types of marketing sources is a

20 very bad way to run your business. You have no time left for other, more important business activities. Your ads can be specific to foreclosures, general we buy houses and some investors even put money to lend in their advertisements. Example Ads: In Foreclosure, Need Help. Call We buy houses, No Equity No Problem Avoid Foreclosure. Call now Signs Signs are like newspapers, they are a shot gun approach to marketing. You can lay out signs in busy intersections or even place them at intersections by houses on your foreclosure lists. IN some counties it is illegal to put signs so please check out your local laws before proceeding.

21 You can use the same types of ads on your signs as in your newspaper ads. Telephone This is a great way to make contact with property owners in foreclosure. You have addresses and owner s names. All you need to do is find out their addresses. Online resources to acquire telephone numbers The biggest problem with this approach is the people are normally hesitant to answer the phones. They are getting bombarded with debt collection agencies. Most of the time, you will find the phone numbers have been disconnected. You will be able to contact a small portion of people using this method and it is well worth it. You can also use voice blast technology. Upload a generic message (never mention the word foreclosure), upload a list and set it to go at a specific

22 time and date. You can set it to only leave a message when an answering machine picks up or allow anyone to listen. Door knocking This is the best method to making huge amounts of money if foreclosure. Most investors won t do it and leaves a whole lot of prospects at your fingertips. It can be awkward at first but it gets easier every door you knock on. A lot of times the prospect does not answer the door or is not home. You can leave a letter in the door that you us for your mailing campaigns. I would continue to keep driving by until the house is either sold or the people stopped the foreclosure. Another great thing about door knocking is finding the properties where the home owners have already left. These are some of the best deals you can get since the property owners have already given up.

23 Approaching The Lender The first thing you will need is the Authorization To Release Information form signed by the property owner. The lender will not be able to discuss anything with you until you fax that over to them. It may take a couple of days once you fax it to get into their systems for the loss mitigation representative to be able to talk to you. Normally the first conversation is you asking them their fax number so you can send them the authorization to release information form. After the release form has been sent and they are able to talk, then you can proceed to ask for their short sale package. They will fax it to you. You can also ask if they entertain short sales and what would be the normal discount. Sometimes they will tell you and sometimes they will say fax them an offer. Fill out everything in the short sale package. If for some reason you don t have some of the required information, then include a piece of paper stating why it is not included. You want to be as thorough as possible. Don t give them any reason to not accept your proposal or to delay a decision. It is advisable to put the loan number on each piece of paper. Once you fax your offer, be prepared to call everyday and be persistent. The best time to call is early in the morning.

24 Closing Remarks In closing, short sales can be very lucrative but also very time consuming. It is best to utilize this as one of your investing tools and not rely solely on this method of making money. You must be very organized to work many proposals increasing your chances to make a large amount of money.

25 Example Forms

26 Authorization to Release Information Dated: TO: Borrowers: Property: Loan We, the undersigned, hereby authorize you to release information regarding the above loan to and/or their agents or assigns. This form may be duplicated in blank and/or sent via facsimile transmission. The authorization is a continuing authorization for said parties to receive information about my loan, including duplicates of any notices sent to me regarding my loan. Borrower:

27 Sign: x Print Name: DOB: SSN: Mothers Maiden Name: Borrower: Sign: x Print Name: DOB: SSN: Mothers Maiden Name:

28 PURCHASE AGREEMENT PROPERTY DESCRIPTION AND PURCHASE PRICE of, the Sellers, and of, the Purchaser, enter into this agreement for the transfer of the property legally described as See exhibit A and being more commonly known as together with all fixtures, improvements and appurtenances, including all built in equipment, all lighting fixtures, globes, bulbs, plumbing fixtures, attached carpeting, shades, Venetian blinds, curtain and drapery rods, television antennas and rotor, storm doors, storm windows, screens, awnings, water softener, air conditioners, automatic garage door equipment (including transmitters), attached mirrors and shelving, security alarm systems, swimming pool equipment, natural gas barbecue, wood stoves, and subject to zoning ordinances, building and use restrictions, and easements, if any, and to pay the sum of $. PRORATIONS Sellers will assign to Purchaser, at no cost to Purchaser, Sellers escrow account and property hazard insurance policy, and/or any refunds which may issue, in lieu of proration of all taxes, association fees, monthly hazard insurance premiums, and monthly mortgage insurance premiums as of date of closing. Any escrow shortage, back taxes, liens, or previous association dues are the responsibility of the Sellers and shall be paid or satisfied by Sellers prior to closing. In the absence of an escrow account, or in the event such escrow account cannot for any reason be assumed or assigned, then the taxes, assessments for public improvements, rentals, association fees, prepaid hazard insurance (if assumed) shall be prorated as the date of closing.

29 INSPECTIONS The Purchaser may inspect the premises and all buildings on the premises following the effective date of this agreement and make such tests as Purchaser may desire, including tests of the well and septic system, radon, lead-based paint risk assessments, and contractor's inspection. The Purchaser or any parties the Purchaser designate shall be granted reasonable access to the premises for inspection. In each instance, the Purchaser shall inform the Sellers of the time and the date when the Purchaser or the others acting on their behalf wish to inspect the premises so that those visits can be scheduled at times that accommodate the Sellers schedules. PEST INSPECTIONS Purchaser may have the Property inspected by a State Certified Pest Control Firm to determine whether there is any visible active wood destroying insects or termites or visible existing structural damage from wood destroying insects or termites to the improvements. Purchaser will be informed of both of the foregoing and Sellers will have seven (7) days from receipt of written notice thereof within which to have all such wood destroying insects or termites damages whether visible or not inspected and estimated by a licensed building or general contractor. Sellers will pay costs of treatment and repair of all structural damage up to one percent (1%) of the purchase price. If such costs exceed such 1%, and the Sellers declines to treat and repair, Purchaser will have the option of (a) terminating this Agreement, in which case the earnest money deposit shall be immediately returned to Purchaser, or (b) proceeding with the transaction, in which event the Sellers will bear the costs equal to one percent (1%) of the purchase price. Within 20 days after the effective date of this agreement, the Sellers shall deliver to the Purchaser a list of all pesticides and other chemicals applied to the premises over the last five years SPECIAL ASSESSMENTS All special assessments that have been assessed and are a lien on the property at the date of the closing will be paid by Sellers. The cost of duly authorized improvements that are subject to future assessments against the property assessed after the date of closing will be paid by Purchaser. CONVEYANCE At the closing, the sellers agree to convey good and marketable title to the premises to the Purchaser by a warranty deed subject only to the provisions shown by the title insurance commitment identified below. TITLE

30 As evidence of title, Sellers agrees to provide Purchaser, within fifteen (15) days after the date of acceptance of this offer, a Title Insurance Commitment, issued with standard exceptions by a reputable title insurance company, in an amount not less than the purchase price, bearing date later than the acceptance of this offer, and guaranteeing the title in the condition required for the performance of this offer. If objection to the title is made, based upon a written opinion of Purchaser's attorney that the title is not in the condition required for performance under the terms of this instrument, the Sellers shall have thirty (30) days from the date Sellers is notified in writing of the particular defects claimed to remedy the title defects or to obtain title insurance specifically insuring against the defects in question. If the Sellers remedies the claimed defects or obtains the appropriate commitment for title insurance within the time specified, the Purchaser agrees to complete the sale. In the event the Sellers is unable to remedy the defect of title, the Purchaser may accept the title as is or cancel the agreement in which case the deposit shall be refunded. Sellers further agrees to deliver to the Purchaser as evidence of title, a policy of Title Insurance in an amount not less than the purchase price, the effective date of the policy to be at the date of or within sixty (60) days after the closing date of this transaction. POSSESSION The Sellers shall deliver and the Purchaser shall accept possession of the property on, 20. Possession shall be deemed to be given when Sellers delivers the keys to the premises to Purchaser or Purchaser's agent. Sellers will pay a fee of $50.00 per day for each day beyond occupancy date that Sellers remains on the premises. REAL ESTATE BROKERS The parties represent to one another that no real estate brokers are involved in this transaction. Each party indemnifies the other against the claims of any brokers and salespeople who allege that they represented a party or are entitled to a commission or fee as a result of the transaction. NOTICES All notices required by this agreement shall be sent to the other party in writing. The notices shall be delivered either personally or by first class mail. ACCESS

31 Purchaser has the right to make repairs, place appropriate signs on the property, and be given a key and have access to show the Property to prospects before closing. CONDITION OF PREMISES The Sellers shall deliver the Property in the same condition as it was on the date of this Agreement, normal wear and tear excepted, and it shall be in a clean, broom swept and ready to occupy condition. SELLERS'S DISCLOSURE STATEMENT The Purchaser acknowledges that Purchaser has been provided a copy of the Sellers Disclosure Statement in compliance with MCLA , et seq. The information provided is a disclosure only and is not intended to be part of the contract between the parties unless otherwise provided in writing with this agreement. LEAD BASE PAINT DISCLOSURE STATEMENT Purchaser acknowledges that prior to signing this Agreement, Purchaser has received and reviewed a copy of the Lead Base Paint Disclosure booklet and the Lead Base Paint Disclosure statement completed by the Sellers. The information contained in the Lead Base Paint Disclosure is incorporated herein and made part of this Agreement. DEFAULT In the event of default by the Purchaser, the Sellers shall retain earnest money as his sole remedy without further recourse between parties. In the event of default by the Sellers, the Purchaser may at there option elect to enforce the terms of this instrument or pursue any remedies available at law or in equity. In any event Purchaser shall be entitled to an immediate refund of her deposit in full.

32 EARNEST MONEY DEPOSIT Purchaser has deposited the sum of $ as earnest money. By signing this agreement, Seller acknowledges receipt of earnest money. Purchaser has deposited the sum of $ as earnest money. The Purchaser's earnest money shall be held in escrow by agent of Purchaser's choice. EMINENT DOMAIN The Sellers shall give the Purchaser notice within 2 days if any portion of the premises is taken or threatened to be taken through the exercise of the power of eminent domain. On receiving the notice, the Purchaser shall have the right for 30 days to terminate this agreement by giving notice to the Sellers, in which case all proceeds of the taking shall remain the property of the Sellers. If the Purchaser does not terminate this agreement within 30 days after notice of the exercise of the power of eminent domain, the proceeds of the taking shall be transferred to the Purchaser at the closing. DAMAGE OR DESTRUCTION OF PROPERTY Sellers shall maintain, until closing or possession is given, whichever is later, hazard insurance in an amount not less than the purchase price, and liability and casualty insurance covering the property conveyed in this instrument. If any of the property shall be damaged or destroyed by fire or other cause between the date this offer is accepted and the date this transaction is closed, Purchaser may (1) elect to proceed with the transaction in which event the Purchaser shall be entitled to all insurance money, payable to Sellers, under any and all policies of insurance covering the property so damaged or destroyed or (2) elect to rescind the contract in which event all parties hereto shall be released from all liability under the terms of this instrument. In the event Purchaser elect to proceed with this contract, he shall notify Sellers in writing, within ten (10) days after the Purchaser

33 have received written notice of the amount of insurance proceeds to be paid for such damage or destruction. Failure by Purchaser to notify Sellers shall constitute an election to rescind this transaction. CLOSING The closing shall be held on or about days after acceptance of agreement. Closing of this sale shall take place at the title company of Purchaser s choosing. Purchaser will pay: Recording Fees Note Stamps Credit Reports Loan Transfer and Assumption Charges VA Funding Fee Loan Origination Fee Survey Appraisal Transfer Tax Wood Destroying Insect/Termite Report Title Insurance Policy $. Seller will pay: Transfer Tax Attorney Fees Loan Origination Fee Appraisal Survey Title Insurance Policy $. Real Estate Brokerage Fees Recording Fees Repair and Replacements not to exceed $. Wood Destroying Insect/Termite Report TIME IS THE ESSENCE Time is the essence in the performance of this agreement.

34 MODIFICATION OF AGREEMENT This agreement supersedes any and all understandings and agreements and constitutes the entire agreement between the parties and no oral representations or statements shall be considered a part hereof. In addition, no modification of this agreement shall be binding unless in writing and signed by the parties. PARTIES, HEIRS AND ASSIGNS The pronouns and relative words used are written in the masculine and singular only. If more than one join in the execution of this instrument as Sellers or Purchaser, or either is of the feminine sex or a corporation, such words shall be read as if written in plural, feminine or neuter, respectively. This agreement shall bind the executors, administrators, personal representatives, successors, heirs and assigns of the respective parties. FACSIMILE AGREEMENT The Purchaser(s) and the Seller(s) agree that a facsimile transmission of any original document shall have the same effect as an original. Any signature required on an original shall be completed when a facsimile copy has been signed. The parties agree that originally signed facsimile copies of documents shall be appended to the originals thereof, and given full effect as if an original. GENERAL CONDITION SELLERS UNDERSTANDS THAT CONSUMATION OF THE SALE OR TRANSFER OF THE PROPERTY DESCRIBED IN THIS AGREEMENT SHALL NOT RELIEVE THE SELLERS OF ANY LIABILITY THAT SELLERS MAY HAVE UNDER THE MORTGAGE(S), IF ANY, TO WHICH THE PROPERTY IS SUBJECT, UNLESS OTHERWISE AGREED TO BY THE LENDER OR REQUIRED BY LAW OR REGULATION. By execution of this instrument, Purchaser hereby acknowledges the receipt of a copy of this offer.

35 Dated: Purchaser Address To the above named Purchaser: The offer is accepted and the Sellers agrees to sell the premises upon the terms stated. By the execution of this instrument, the Sellers further acknowledges receipt of a copy of this agreement. Dated: Sellers Address Dated: Sellers Address LIMITED POWER OF ATTORNEY This limited Power of Attorney is given to for the purpose of Closing, Insurance, Mortgage Payments, Selling or any other matters that pertain to real property described as follows:

36 and known by street and address as The limited Power of Attorney shall become valid as of the date signed below and be in force until the final closing of the property. POWER OF ATTORNEY GIVEN TO: Dated: Signed in the presence of Signed by /s/ /s/ /s/ /s/ I Hereby Certify that on this day, before me, an officer duly authorized in the State aforesaid to take acknowledgments, personally appeared to me known as the person(s) described in and who executed the foregoing instrument and Acknowledged before me that executed the same. Witness my hand and official seal in the county and State last aforesaid this day of,20 A. D.,

37 Notary Public My commission expires Drafted By:

38 Sample Hardship Letter

39 To Whom It May Concern: Loan #12345 I am writing this letter to share some of the hardships I have endured over the past year. As you know, my property located at address is currently facing foreclosure. I have tried to sell the property for months and have gotten only one serious offer because of the poor condition of the property. Based on the offer I have, I urge you to please accept the $40, being submitted by ABC Housing, Inc. Please accept this offer as payment in full. My attorney has advised me to file bankruptcy, but I prefer to avoid further destruction of my credit. I just want to move on and start over. I am enclosing my bank statements from Month, late notices on my car, and anything else I can find that shows the financial trouble I m facing. I have also enclosed my 20 tax returns. I am in the clothing industry and things have basically stopped since September, I am currently looking for another field in which to work. So far, I haven t had much success. I am 2 months behind on my car, electric, and phone, etc.. Attached are copies of my late notices. If there is any other information you need, please feel free to call me. Sincerely, Homeowner

40

41 Sample Repair List

42 Loan #12345 Roof: the existing roof is an extremely old cement tile roof, which must be replaced with a new asphalt shingle roof. Also the flat roof over the addition must be redone. Approx. $5, Wood Rot/Facia/Soffet: There is evidence of live termite infestation and over 40% of the facia & soffets must be replaced when the existing roof is torn off. Approx. $ for the termite tent. Approx. $1, wood replacement & labor Flooring: Existing carpet is torn and/or missing in various places; padding does not meet FHA standards. May re-carpet or tile. Approx.: $1, Doors: Closet doors are missing and should be replaced. Approx. $ Exterior: Carport area/laundry room doors missing; must be replaced; cost included in other quotes.

43 Paint: Interior paint (including ceiling patches, etc). & exterior pressure cleaning and painting required. Approx.: $2, Windows: All windows are original jalouse panes, which are outdated and extremely energy inefficient. Approx. cost to replace: $3, Bath: Plumbing fixtures leak and must be replaced. Approx.: $ *Possible Code Violation exits due to an addition built onto the rear of the property that does not meet current code requirements. Approx. cost to bring to code or remove: $6, Approximate Total cost to complete proper renovations: $25, *Please note that these quotes do not include any structural problems

44 Direct Mail Examples

45 Do You Have a Mortgage Problem? The last couple of years have been pretty tough on plenty of people. If you are one of the large amounts of families that are having a tough time with mortgage payments then you can understand exactly what I mean. Wouldn t it be great to be able to partner with someone to help make up any late payments until things got better? Someone who is there to help you and your family through the hard times. You may have a partner. My name is XXXXXX and I might just be that partner. I will partner with homeowners helping them get caught up on mortgage payments or I can purchase the house outright. I have created a special report on How to Stop Foreclosure. The special report reveals many ways to stop foreclosure or avoid it all together. It even talks about how partnering with me will help. But my attorney said to file bankruptcy.

46 The information in this report is not something attorneys want you to know. See, attorneys make money when people like you file bankruptcy. The only problem is that bankruptcy is only one option that you can use to keep your house. Most people that file bankruptcy end up losing their house anyway. They just postpone the foreclosure. Do you think that most attorneys will jeopardize a pay day by explaining those other options to you? PICK UP THE PHONE AND ORDER YOUR FREE REPORT NOW, you have nothing to lose, after all it s FREE. Then again, there s a very good chance I can help you, and take care of your special needs. But we ll never know, unless we make contact. Call my free 24 hour recorded message at right now, leave your information and I ll mail your Report off today. Thank you, YOUR NAME P.S. If you don t want to read the Report, and you just want to talk to someone now about your options, then call This is my direct line so leave a message if I am on the other line. I will call you back right away because I know how important this is to you.

47 I m a little worried for you You re in the middle of a foreclosure right now and yet you still won t call? Well, don t blame yourself I am not so sure I would have called either if I didn t know what I know now. I am just a little worried because the next decision you make can affect you and your family s future for quite awhile. Wouldn t you agree that one should know all options available to them before you make any decisions? Well I think so and that is the reason I created a free special report How to Stop Foreclosure. You can order this free report by calling my 24 hour recorded message at Follow the instructions and I will get that report out ASAP. I know how important that report will be to you. You still have a chance to come out of this okay. But time is running out quickly, so decide today that it s worth it and order my free special report. I will always be available if you need to talk with me directly. My direct line is Sincerely, Your Name

48 P.S. The special report covers many options that you can take advantage of. Don t you think you owe it to yourself to find out what options are available before making a decision that can drastically change you and your family s life?

49 Got a headache? Take two aspirin and call the Doctor. When someone gets sick the first thought may be to take a couple of aspirin. If the aspirin doesn t work then the next step may be to call the doctor. The doctor may be able to prescribe something that will permanently take the headaches away. Why am I telling you something that you already know? My name is YOUR NAME, and the people call me the Real Estate Doctor, because like a doctor, I solve headaches that keep coming back because of problems. But I won t kid you I don t do physical checkups with thermometers or hit your knees with little rubber hammers. Instead, I use all of my real estate problem-solving skills to help homeowners facing trouble. Now these problems may not be life and death problems like a medical doctor may face, but you d better believe that I understand that foreclosure is an incredibly difficult problem just the same.

50 Sure, no one dies, but losing a home ranks right up there on the list of things I d rather not see happen today to you or to me, and that s why I ve chosen to send you this letter. But I m guessing that you don t need a medical checkup to stop the headaches. You probably need someone who knows the foreclosure and bankruptcy business inside and out, who can carefully explain your options to you so you can decide what works best for you, and most importantly, someone who can deliver on his promises. Sincerely, Your Name The Real Estate Doctor P.S. If you haven t received my special report How to stop foreclosure then call me now. I will send one out right away.

51 Time to focus on Solutions not problems You re in the middle of a foreclosure right now and yet you still won t call? Well, don t blame yourself I am not so sure I would have called either if I didn t know what I know now. You and my friend Larry have something in common. Larry went through a foreclosure just like you. Larry is a great guy but just got caught up in a bad situation. After his divorce, the house was left to his ex wife. She got laid off and couldn t afford the payments. Unfortunately for Larry, he couldn t afford his payment and his ex-wife s payment. He asked his parents advice and they told him to let the bank take it back. Larry got all kinds of cards and letters from people that he didn t know, offering him their help. Guess what he did with them all. Probably same thing as you, threw them all away. Larry wasn t going to trust a single one of them and he sure didn t want to tell them about his personal problems. Guess how it turned out?

52 Let s just say he didn t like his parent s advice and leave it at that. I asked Larry what he would have done differently today. He said he wouldn t be afraid of picking up the phone to make a call or two to find out what his options were. Sure, he would be somewhat embarrassed, but that wouldn t matter one bit him. Hey, we all know that stuff happens to everyone. No big deal. Look, if you want to keep your home, call me and I ll show you how to get that done, pronto. If you d rather sell, I can make that happen just as quickly. Larry screwed his up, big time. You? You still have a chance to come out of this okay. But time is running out quickly, so decide today that it s worth it in the end and get me on the telephone. I m sitting here waiting for your call ( ) right now. Sincerely, Your Name The Real Estate Doctor

53 The Short Sale Manifest P.S. If you are truly interested in saving or selling your house than call now We have limited number of homeowners that we can work with. So call now and make sure you don t miss out. 54 P age