If you are facing financial challenges with yourmortgage, you are not alone. According to aDecember 5, 2008 article by the AssociatedPress on MSNBC.com entitled, 1 in 10homeowners in mortgage trouble, “A record onein 10 American homeowners with a mortgagewere either at least a month behind on theirpayments or in foreclosure at the end ofSeptember as the source of the housing marketpressure shifted from risky loans to thecrumbling U.S. economy.” Here in California,3.9 percent of all home loans are in foreclosure,compared with about three percent nationally,reports the MSNBC.com article.

If you are among the 3.9 percent of Californiansfacing financial challenges with your mortgage,you do have options. According to a January27, 2009 RISMEDIA article entitled, ForeclosureMoratorium Spurs New Interest in Short Sales,“The national foreclosure moratorium imposedby Fannie Mae and Freddie Mac, major bankssuch as Citibank and Bank of America, and ahost of state governments has created a‘breather’ for homeowners in default. Byworking with loan servicers, some homeownerswill be able to modify their loan terms and stayin their homes. But many won’t.”

In addition to loan modification, options forstruggling homeowners may include foreclosure,deed in lieu of foreclosure, short sale andbankruptcy. Among these options, the onegrowing in popularity is the short sale, accordingto RISMEDIA’s article, especially sinceforeclosures can be so pricey for the banksinvolved. Before you make a final decision as towhich option is best for you, however, please consultwith your legal and tax advisors.

What is a short sale and what isthe benefit?

“Short sales are when the lender allows adistressed property to be sold at a price lowerthan the homeowner’s mortgage indebtedness,with the difference forgiven,” says RISMEDIA.The article went on to report that a short sale“also typically allows the new purchaser to buyinto the neighborhood at a substantial discount,much more in line with the property’s true,current market value. In other words, shortsales facilitate efficient clearing of the market.”

If you are currently a homeowner facing financialchallenges with your mortgage, is a short saleyour solution? Only you and your legal andtax advisors can determine the right course ofaction for you.

If you do decide to proceed with a shortsale, Coldwell Banker ResidentialBrokerage can help.

As a trusted real estate advisor for our clientssince 1906, we at Coldwell Banker ResidentialBrokerage stand behind a century of experience,strength and expertise in the local housingmarket. To that end, we are committed tohelping our clients with their real estate needsby continually evolving our resources, tools andstrategies so that we may provide the bestservice possible in good times and bad.

If you decide to proceed with a short sale afterconsulting your legal and tax advisors, we havethe tools and resources to help facilitate yourshort sale transaction. We understand thecomplexities involved with handling short saleproperties and would welcome the opportunityto be of assistance to you and explain how ourresources may benefit you. For moreinformation, assistance or questions about ourshort sale resources, call me today.

©2009 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An EqualOpportunity Company. Equal Housing Opportunity. Each Coldwell Banker Residential Brokerage Office Is Owned And Operated by NRT LLC. DRE License # 00313415

Y O U H A V E O P T I O N S

Homeowner Resources

In addition to a short sale, thereare other options to consider ifyou are facing financial challengeswith your mortgage. It’simportant to research all of youravailable options and then consultwith your legal and tax advisorsas to which option is best foryou. Coldwell Banker hascompiled a list of useful links togovernment and communitybased nonprofit organizationwebsites which includeinformation on foreclosureprevention, loan modification, nocost HUD approved counselingservices and other importantinformation.

U.S. Department of Housingand Urban Developmenthttp://www.hud.gov

U.S. Department of Housingand Urban DevelopmentGuide to Avoiding Foreclosurehttp://www.hud.gov/foreclosure/index.cfm*Talk to counselor

Federal HousingAdministrationhttp://www.fha.gov

Hope Nowhttp://www.hopenow.com

Internal Revenue Servicehttp://www.irs.govSearch for : Mortgage Debt

Relief BillClick on: Home Foreclosure

Debt Cancellation

MORTGAGE CHALLENGES?

Dear Homeowner: We know that this is a difficult time for you. You are facing uncertainty. You’ve heard horror stories from your friends. Fortunately, you now have someone in your corner to help you through these difficult times. We are Jack & Tracey Edwards. We will be your trusted advisors as we help you understand your options. Included in this packet of information is a description of the various options that you can consider as you move forward to decide what to do about your home. Foreclosure, Deed-in-lieu of Foreclosure, Short Sale, Bankruptcy, etc… What will be the best for you? We are not here to point fingers or to cast blame. The bottom line is that you are up to your neck in financial quicksand and need help to free yourself. We are here to advise you and then to help you get through this and put it all behind you. Please read through these documents. At our first meeting we will discuss your options and help you to decide how we can solve your problems. If the decision is to short sale your home, we will need you to give us the authority to intercede on your behalf with your lenders. That is why we are asking you to complete and sign the Authorization to Release form and the Do Not Phone form. In order to be approved for a short sale by your lender, you have to show them that you have a hardship that prevents you from paying your monthly mortgage payments. That is why you will have to handwrite your hardship letter and why you will have to complete the financial statement. Unfortunately, it is not enough to just say that you cannot pay your mortgage; you have to prove it. That is why you will need to bring the documents identified on the Required Short Sale Documentation worksheet to our next meeting. If we are convinced that you qualify for a short sale, we will get your home listed and we will make contact with your lender to request the short sale. We look forward to working with you. If you should have any questions or concerns, please do not hesitate to call us at the numbers listed below. Sincerely, Jack & Tracey Edwards, Realtors® Coldwell Banker Residential Brokerage 916-240-9302(Cell) 916-683-7048(Fax) Jack@TeamEdwardsRealEstate.com

www.TeamEdwardsRealEstate.com

9250 Laguna Springs Blvd., Suite 100, Elk Grove, CA 95758

Table of Contents

1. Alternatives to Foreclosure

2. What is a Short Sale?

3. Required Short Sale Documents

4. Authorization Release

5. Do No Contact By Phone Form

6. Sample Hardship Letter

7. No Copies Statements

8. Financial Statement

Alternatives to Foreclosure

Coldwell Banker Residential Brokerage 9250 Laguna Springs Drive, Elk Grove, CA 95758

Direct: (916) 240-9302 Fax: (916) 683-7048

You may be facing foreclosure… so what are your options?!? Try to look at the situation more from a financial standpoint rather than an emotional standpoint. This way you can more successfully analyze which option might best suit your needs and desires to move you towards resolving your financial difficulty. One very important thing to remember: Time is of the essence. Take time to think through your situation and make a decision. Then, take action right away so you have enough time to complete the solution you choose.

Nine options when facing Foreclosure 1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed upon. Credit reports also disclose this damaging information. Not the best option. 2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home. 3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees. 4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment. 5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements. 6. Partial Claim – A loan from the lender for a 2nd loan to include back payments, costs and fees. 7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing. Banks generally require the home to be well maintained, all mortgage payment and taxes must be current. Most loan applications ask if this has ever happened. 8. Bankruptcy – This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy attorney. --Chapter 7 (Liquidation) To completely settle personal debt. --Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years. --Chapter 11 (Business Reorganization) A business debt solution. 9. Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale. In this case, the homeowner will get cash from the sale. On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value. I have read this form and understand that I have several options available to me and that there may be more than those listed above. I have been advised that I should consult an Attorney and CPA. I have chosen to use Coldwell Banker to assist me in negotiating the short sale of my home. Borrower_______________________________ Co-Borrower_________________________________ Signature________________________________ Signature____________________________________ Date____________________________________Date________________________________________

What is a Short Sale?

Simply put, a home for sale that is worth less in today’s market than what is owed to the lender(s).

The Hard Truth About Short Sales?

Your goal is to get out from under the debt with the least amount of damage to your credit as possible.

I do not give tax or legal advice. When we receive the letter from your lender, you should discuss its provisions with your real estate attorney and your tax professional to determine if you have obtained a release of lien as well as a release of liability from your lender.

The short sale is different from a regular sale in that your listing agent will be negotiating with all of your lenders as well as with the buyer and the buyer’s agent to get the house sold.

Additionally, as your Short Sale agent, I am not here to negotiate list price and real estate commissions with you. We want the highest price possible, but we will set the list price based upon the market analysis. If we do not see any activity from buyers, we will lower the price each week until we get an offer. We cannot get short sale approval from the bank until we have a written offer to present. You will have to pay for a pest inspection immediately (about $75). This is not negotiatable!!!

Your lender will not approve a short sale if you do not have a “Qualified Hardship”. Job loss, divorce, etc… The lender does not consider the loss of value in the home to be a hardship.

The hardship may or may not be your fault. You need to be able to put that behind you and move forward.

To get started, you need to provide several documents so that I can determine if you are likely to qualify for the Short Sale.

A short sale will not happen if all lenders are not willing to agree to the terms or if you have too many loans or liens on your property.

I need to know if you have not paid your house payment. I also need to know if you have already received a Notice Of Default from your lender(s).

While this process is going on, the home could be going through the foreclosure process.

Don’t be in a hurry; it can take from between a few weeks to several months to get an answer back from your Lender(s).

Jack and Tracey Edwards Realtors® ePro®

Coldwell Banker Residential Brokerage 9250 Laguna Springs Drive, Ste. 100

Elk Grove, CA 95758 Jack’s Phone: 916-240-9302 DRE # 01331087

Tracey’s Phone: 916-826-9325 DRE # 01413709

Required Short Sale Documentation:

In order to process you request for a short sale, most lenders require the buyer to provide documentation that shows why the buyer cannot continue to make the payments and why the lender should forgive the difference between the amount owed and the net proceeds from the sale of the home.

They must receive the requested documentation before they will consider a short sale.

Please provide:

Provide a Hardship letter detailing the events that have made it difficult for you to make your payments. The letter must include the reason for the short sale request and what events have brought you to this situation. Lender’s financial application detailing expected monthly expenses.

Provide a copy of the last two paycheck stubs dated no earlier than 30

days from this request. If self employed; please provide a current profit and loss starting from

last January through today detailing the business income and expenses. This does not need to be prepared by a tax professional, and can be estimated by the business owner. Provide W-2s for all persons on the title

Provide a copy of the last completed and signed federal tax returns

including all schedules. If the current year has not been filed, please provide a copy of the

extension, plus the prior year’s federal tax return. Provide a copy of the last two months Bank Statements for all accounts

including checking, savings and any retirement or investment accounts as stated on the financial application. All pages must be included for qualification. Otherwise any statements missing pages will not be considered acceptable.

Bank & Financial Institution Authorization & Release Form

I hereby authorize Jack A. Edwards, Coldwell Banker and Mari Hernandez, Cornerstone Title Company, to request, obtain and verify any and all mortgage loan information, including but not limited to, payoff, arrearage, and reinstatement amounts as well as financial history. The information obtained is to be used for the purpose of facilitating the resolution of my foreclosure. Property Address: _____________________________________________________ Loan Number: ________________________ Loan Number: ________________________ ____________________________________ Borrower Signature ____________________________________ _________________ Print Name Date Social Security Number: _________________________________ Date of Birth: _____________________ _____________________________________ Co-Borrower Signature _____________________________________ _________________ Print Name Date Social Security Number: _________________________________ Date of Birth: _____________________

Please Do Not Contact Me by Phone First Loan #: ______________________ Second Loan #:______________________ First Lender: ______________________ Second Lender: ______________________ Property Address: _______________________________________________________ According to the Fair Lending law, I have the right to request that you, my lender, not contact me by phone regarding my loan being in default. I do not wish to speak to any collection agents about this account. Please make any future communication with me in writing or if you must speak to someone regarding this account, please talk to my Real Estate Agent with Coldwell Banker, Jack A. Edwards, who is assisting me in selling my home. The information obtained by my agent is to be used for the purpose of facilitating the resolution of my foreclosure. _____________________________________ Borrower

_____________________________________ _________________ Printed Name Date

Social Security Number: _________________________________

Date of Birth: _____________________ _____________________________________ Co-Borrower

_____________________________________ _________________ Printed Name Date

Social Security Number: _________________________________

Date of Birth: _____________________

AGENT CONTACT INFO: Coldwell Banker Residential Brokerage

Jack A. Edwards, Realtor CA DRE #01331087

916-240-9302

Hardship Letter Guidelines Remember to state the following items in your HANDWRITTEN hardship letter:

1. Hardships – What are your hardships (current and past). For example – unemployed, car accident, medical problems (personal or family), etc. Go into a little detail about each hardship. The following are the most important messages to get across to the Lender:

a. Why we will not be able to be current again on our loan. b. We do not have enough income to make these payments. c. We are leaving the property.

2. Your Assets – Explain that you have no assets with which to continue paying.

3. Any signed exemptions of documents – If you do not have bank statements, pay

stubs or tax returns, you will need to explain the reason in more detail in your letter as to “why” you cannot provide those documents. (i.e. I’ve been unemployed for 6 months and have not been able to find work) Note- realize that if you don’t have tax returns, then the bank will ask for Extension-Fillings. So, if you don’t have Extension-Fillings either, explain why in this letter. (i.e. “I haven’t worked in over 2 years and so I haven’t filed taxes nor extensions”, or “I haven’t filed my tax returns for the past 2 years and I failed to file extensions as well).

4. Bankruptcy – You could also mention “I don’t want to have to file bankruptcy”.

Sample Hardship Letter

[*Remember, YOU must handwrite your own Hardship Letter to the Lender(s)] To Whom It May Concern: I have been unable to make my payments on my house, and I am now facing foreclosure. My inability to keep up with the monthly payments is the result of (loss of job, illness, accident, death or disability of a wage earner – describe in detail what your hardship is). In spite of my current financial difficulties, I expect that it will only get (better / worse). I am not in a position to continue making my mortgage payments. This was not at all what I intended, but I have come to the conclusion that this is my only option. Your help and consideration in this matter are very much appreciated. {Signature} {Date} {Printed Name}

Copies of last 2 Pay Stubs (I am / We are) unemployed and have no Pay-Stubs to provide. ______________________________ Borrower: ______________________________ Co-Borrower:

Copies of last 2 months Bank Statements

(I / We) no longer have a checking account, so (I am / we are) unable to provide any Bank Statements. ______________________________ Borrower: ______________________________ Co-Borrower:

Copies of last 2 Year Tax Returns

(I / We) have not done (my / our) taxes for the past 2 years, and (I / we) failed to file any extensions. ______________________________ Borrower: ______________________________ Co-Borrower:

g

FINANCIAL STATEMENTDate: Your Loan Number:

Property Address:

Is your home listed for sale? Yes____ No____

Agent's Name: Agent's Phone Number:

Borrower Name: Social Security Number:

Mailing Address (#, Street, Apt.):

Mailing Address (City, State, Zip):

Employer's Name: Length of employment:

Monthly Net/take home pay: Work Phone:

Total Number of persons living at this address: Home Phone:

Number of children at this address:

Co-Borrower's Name: Social Security Number:

Mailing Address (#, Street, Apt.):

Mailing Address (City, State, Zip):

Employer's Name: Length of employment:

Monthly Net/take home pay: Work Phone:

Home Phone:

Have you ever contacted a credit counseling service? Reason:Yes____ No____Additional Income (not wa $ /mo Please Explain:

AssetsTYPE Estimated Value TYPE Estimated ValueHome Checking Account(s)

Other Real Estate Savings/Money Market

Other Real Estate IRA/Keogh

Other Investments Stocks/Bonds/CD's

Automobile (#_____) Other

Monthly ExpensesCATEGORY DESCRIPTION MONTHLY BALANCE ESTIMATED Past If yes, # of

PAYMENT DUE VALUE Due monthsY/N

Subject First Mortgage $ $ $Property Second Mortgage

Other Properties Other MortgageRent Paid

Dues HOA

Automobile AUTO 1 / LeaseAUTO 2 / LeaseGasolineMaintenanceInsurance

Other Loans Student Loan(s)Finance CompanyInstallement

Credit Cards VISAMASTERCARDDISCOVEROther:Other:

Utilities Electrical/HeatingWater/Sewer/TrashTelephoneCable

Insurance Health/DentalLife

Medical Doctor/Dentist(Not Covered MedicationBy Insurance) HospitalEntertainmentFood Family

Support AlimonyChild

Child Care Day Care

OTHER:SPECIFY

TOTAL MONTHLY EXPENSES:

I (We) understand that the financial information provided is an accurate statement of my (our) loan financialstatus. I (We) understand and acknowledge any action taken by the lender of my (our) mortgage loan onmy (our) behalf will be made in strict reliance on the financial information provided. My (Our) signature(s)below grants the holder of my (our) mortgage the authority to confirm the information I (we) have disclosed inthis financial statement to verify that it is accurate by ordering a credit report and to contact my (our) Real Estate Agent and/or credit counseling service representative if applicable.

Submitted this _______________ day of _______________, of the year _____________________

By: _____________________________________________________ Date: _________________

Signature of Borrower

By: _____________________________________________________ Date: _________________

Signature of Co-Borrower

BORROWER'S COMMENTS: