12-16-08 Presentation E4BMJ Community Development, Inc a not - for - profit 5
December 4, 2008 ,er, Cam)
f
Emergency Loss Mitigation Intervention
Services For the City of South Miami
residents facing foreclosure of their
homes.
www.LetsGetHelpNow.com
520 NW 165" Street #112
Miami, F133169
Bernard WH Jennings, Executive Director
305 - 677 -2226 Phone Fax 1- 888 - 735 -8349
3006 Aviation Avenue Ste 4B
Coconut Grove, F1 33133
1313 NE 125" Street
Miami, Florida 33162
1320 NW 135`" St
Miami, F133167
I. SUMMARY .................................................................................................. ..............................3
II. INTRODUCTION ........................................................................................ ....:.......................... 4
III. NEEDS /PROBLEMS .................................................................................... ..............................5
IV. GOALS / OBJECTIVES ................................................................................. ..............................6
V. PROCEDURES /SCOPE OF WORK ........................................................... ..............................6
VI. TIMETABLE .................................................................................................. ..............................8
VII. BUDGET ...................................................................................................... ..............................8
VIII. KEY PERSONNEL ........................................................................................ ..............................9
IX. EVALUATION ......................................................:....................................... ..............................9
X. ENDORSEMENTS ........................................................................................ ..............................9
XI. NEXT STEPS ................................................................................................ .............................10
XII. APPENDIX .................................................................................................... ...............................
Page 2 of 11
I. Summary
Home foreclosure is a process by which a lender regains a property which they have
financed. Typically, this is because the borrower or homeowner is behind on house
payments and is unable to catch up, often due to circumstances outside of his or her
control. When the lender forecloses on the homeowner, the homeowner must move out of
the house, therefore, losing all possession of the property and jeopardizing any possible
equity that the homeowner may have in the home. There is a legal time frame, which varies
from state to state, which determines how long the foreclosure process can take. These
losses impact county and municipal governments financially as well. If the homeowner
cannot pay their mortgage, they usually do not pay their property taxes. Municipalities and
School Systems rely on these funds to operate.
BMJ Community Development is committed to providing Loss Mitigation Services to
assist families in maintaining their homes. We are a team of trained professionals that will
work one on one with homeowners. Our goal is to utilize advanced loss mitigation
techniques to work out an agreement between the homeowner and the lender that will stop
foreclosure proceedings permanently. This allows the homeowner to stay in their home and
protects their credit history.
We have several offices, and a mobile unit that is ready to be dispatched to the City of
South Miami if necessary. With present day technology i.e. internet, email, fax etc, we are
accessible to every homeowner who may need our services whom we can financially
accommodate. We are requesting that the City of South Miami provide Emergency
Funding to BMJ Community Development to help us extend our outreach to
accommodate homeowners save their properties in City of South Miami whereby we can
attempt to lower the foreclosure rate by 15% to 30 %. We are requesting a funded budget
of $100,650 dollars. This amount will accommodate 183 homeowners with Loss
Mitigation assistance, with no further cost from us to the homeowner directly.
The City of South Miami has a great need for our services.
Number of Foreclosures 1 543(+/-)
__ .............._ ..._......................_...._......,.,................ ...................... .... ..__....................... ............................... .................................... .........................._.._.
Median Price Value $303,000
Unemployment Rate 5.5%
Owner Occupied Properties % 72,6%
Current Vacancy Rate % 6.2%
Median Income $48,745
Average Property Tax $4,459.89
Values Down by -36.9%
*Estimate by RealtyTrac, Yahoo Real Estate, Trulia.com
Page 3 of 11
II. Introduction
BMJ Community Development, Inc. A not - for - profit 5010 3.
Founded over ten (10) years ago, BMJ Community Development, Inc. has been engaged in
creating new opportunities -- primarily related to affordable housing, small businesses, and
jobs - -that specifically benefit lower- income neighborhoods and populations. Such efforts
are typically conducted through community development corporations (CDCs) and other
organizations whose primary purpose is to help meet the credit, housing, and economic
development needs of low- and moderate - income communities. Because CDCs are
mission - driven organizations created to promote community revitalization, they are often
well positioned to engage in development activities in the absence of private investment.
Great diversity exists in CDC ownership affiliations, ranging from banks to faith -based
entities.
BMJ Community Development, Inc. has helped many families save their homes from
foreclosure. With the right help, virtually any foreclosure situation can be successfully
resolved. When facing foreclosure Time is of the Essence. Homeowners MUST act fast to
protect their rights and stop foreclosure. Many people who need foreclosure assistance
simply do nothing and hope for a miracle. This is why we need to be proactive by reaching
out to these homeowners before it is too late. Due to advanced technology, BMJ
Community Development is not limited to a single geographic location to provide
foreclosure assistance.
We are able to provide several alternatives to foreclosure. These alternatives are explained
in detail to each homeowner during an in- person or telephone consultation. Not all
alternatives are available to all mortgage scenarios. We are trained to make sure we
concentrate only on those alternatives for which the homeowner qualifies. In order to
identify the best alternative available to the homeowner, we must communicate both openly
and honestly.
To be eligible to exercise any of the alternatives to foreclosure, other than reinstatement,
the homeowner must demonstrate compliance with all requirements as determined by the
investor /lender, at their sole discretion. If the property is already in foreclosure we can
help stop this action by communicating with the lender, creating a payment plan and using
available programs to assist the homeowner in bringing their mortgage current.
To maintain property ownership the borrower has to be eligible. The borrower proves
eligibility to the satisfaction of the investor /lender, in their sole discretion. The borrower
justifies that a hardship exists, that their budget will permit them to maintain future
monthly payments, and that they will meet any other requirements of the investor /lender.
Page 4 of 11
III. Needs /Problems
Home foreclosure is a process by which a lender regains a property which they have
financed. Typically, this is because the borrower or homeowner is behind on house
payments and is unable to catch up, often due to circumstances outside of his or her
control. When the lender forecloses on the homeowner, the homeowner must move out of
the house, therefore, losing all possession of the property and jeopardizing any possible
equity that the homeowner may have in the home. There is a legal time frame, which varies
from state to state, which determines how long the foreclosure process can take.
Bank foreclosing on a home is one of the biggest nightmares for any homeowner and
Miami seems be reeling under a long spell of foreclosure nightmare. Foreclosures in the
state of Florida started to rise since 2005 and since then it has been taking huge leaps every
year and here are some comparison statistics for Miami -Dade:
Foreclosure Auctions: Miami contributed to the national average recording some of the
highest rate of foreclosures by state in 2008. The county that recorded an increase in
foreclosures is Miami -Dade County where the number of foreclosure auctions in April
2008 was 882, which is a jump of 8.75% from March 2008. In March 2008, 811 foreclosed
houses in Miami -Dade County were auctioned and this is a jump of almost 160% since
April 2007 when number of foreclosures auctioned was 339. Foreclosure filings in Miami -
Dade are currently averaging at almost 800 per day. Nationally, nearly 7.3 million
Americans are expected to default on their loans between 2008 and 2010, 1.2 million of
them in Florida, according to Moody's Economy.com. In short, that means one (1) out of
five (5) homes in Miami -Dade County will be facing foreclosure.
The total number of foreclosure auctions in Miami -Dade County in the first quarter of 2008
was 2231 as compared to 8877 in Los Angeles, 918 in New York City, while Seattle
recorded a low of 385.
In Miami -Dade the foreclosure auctions scheduled in the first quarter of 2008 increased by
a whopping 126% as compared to the first quarter of 2007. The foreclosures in Miami per
household in 2008 were very high and were almost 5 times higher as compared to Seattle
and 9 times higher than New York City. As a result on one hand investors are having a
great time buying great homes at a low price while homeowners are paying a heavy price
for taking out Adjustable Rate Mortgages to buy their dream homes. Rising unemployment
is now contributing to a new wave of homeowners experiencing mortgage difficulties, in
addition to borrowers whose adjustable -rate loans are resetting to unaffordable levels.
To stem the flow, the Treasury Department has announced a new plan to restructure loans
for what it expects to be hundreds of thousands of borrowers in a streamlined modification
process through Fannie Mae and Freddy Mac. (Foreclosure Connections Blog, November
2008)
Obviously, local government must be involved and assist as well.
Page 5 of 11
IV. Goals /Objectives
The goal of loss mitigation is to work out an agreement between the homeowner and the
lender that will stop foreclosure proceedings permanently. This allows the homeowner to
stay in their home and protects -their credit history.
BMJ Community Development, Inc. specializes in resolutions of mortgage delinquencies
or home foreclosure claims on behalf of the homeowner. We perform a detailed financial
analysis and work with them to determine their best alternatives. We review the lenders
loss mitigation policies and state's foreclosure law to make sure that we give homeowners
the best service within the context of their situation. By working with homeowners and
their lender we can tailor a resolution to meet the homeowners specific criteria and
financial circumstance. We do all of this quickly and effectively because we have
combined experience of over 30 years in the Real Estate and Mortgage industry. Our
Executive Director has received direct training from the Department of Housing & Urban
Development (HUD).
In January of 2001 The U.S. Department of Housing and Urban Development (HUD)
issued guidelines mandating that all borrowers with FHA loans that fall under HUD
regulations be informed of their rights to mortgage loan work out programs: See HUD
ML2002 -12. The Veteran's Administration (VA) also has a great many entitlements
that can keep a Veteran out of foreclosure. Some home - owners may be entitled to federally
mandated FHA/HUD or VA loss mitigation assistance from their lender to stop
foreclosure by:
• Reducing borrower interest rate
• Extending the time to pay back mortgage loan
• Putting past due payments into the balance of the mortgage loan
• Putting the past due payments on to the end of mortgage loan
• Arranging for existing lender to provide a Partial Claim (2nd loan covering the
arrearage)
• Extended time to Sell their house for less than they owe the bank
• Giving the house to the bank or the government in exchange for what they owe
• Federal Protection to immediately stop the foreclosure by filing 3 sheets of
paper(last resort)
V. Procedures /Scope of Work
Each homeowner will be consulted and one of two (2) objectives will be determined.
1) Is the homeowner interested in maintaining homeownership? Or .
2) Is the homeowner not willing or unable to maintain ownership?
Page 6 of 11
If they are unable or unwilling to maintain ownership of their home, the following are
alternatives to foreclosure to consider.
• Deed -In -Lieu of Foreclosure
• Pre - Foreclosure /Short Sale or Sale
In order to pursue these options, they will need to prove to the satisfaction of the investor,
in their sole discretion, that a hardship exists. In addition, a contribution toward any loss to
the investor may be required, as well as compliance with and additional requirements of the
investor. In some instances, lenders will offer homeowners "Cash for keys ". We will
provide a referral to homeowners who deem to list their properties for sale in the market
and work with their lenders to provide them an additional period of time to do so. We are
not realtors or real estate agents or brokers and will not participate in these sales
transactions.
When the desire is to maintain homeownership, we will gather from the
homeowner /borrower the appropriate financial information as required by their lender. The
Standard Financial Package contains the following:
1. Hardship Letter- a letter and supporting documentation outlining
the events which have caused the difficulty in maintaining monthly
housing payments.
2. Income Tax Returns- the most recent two years
3. Income- the most recent months, pay- stubs, child support awards
letters, social security, disability, etc.
4. Bank Statements- the most recent two month's bank statements,
including checking and savings accounts.
5. Financial Analysis- completed Financial Analysis Form. The form
is provided to all homeowner clients at time of consultation.
The Financial Analysis Form will be reviewed with the homeowner and the appropriate
adjustments will be recommended to balance the homeowners personal budget. This aspect
is critical to the acceptance of an appropriate workout plan by the lender. Once the lender
agrees to a Loss Mitigation Plan the homeowner will be notified. Any Modifications will
be notarized by our staff and appropriately returned to the lender based upon their
guidelines.
Due to the varying types of sub -prime mortgage loans, some lenders are prohibited from
providing Loan Modifications. This will only allow payment plans that make the payments
even more expensive. As necessary, we will refer these homeowners for Federal Court
assistance by them filing a Chapter 13. These recommendations will be made by our in-
house corporate attorney.
Page 7 of 1 1
VI. Timetable
Once a perspective homeowner; is consulted with, under regular circumstances, it can take
30 to 45 days for acceptance into a lenders workout plan.
Phase One — encompasses the initial consultation where a Loss Mitigation Application,.
Acknowledgement and Authorization Form is completed including the completion of the
Financial Analysis Form.
Phase Two- the borrower has the responsibility to provide copies of all documents
requested to complete the Financial Package for submission to the lender. This. Phase may
take additional staff follow -up due to the homeowners/borrowers reluctance /procrastination
or frustration or stresses over their present dilemma. These documents are needed to'
complete the Financial Analysis.
Phase Three- the Financial Analysis is utilized to access debt to income ratios and make
recommendations to the homeowner /borrower about their personal expenditures. . This
recommendation may be made in an in- person meeting or over the telephone. Once the
homeowner/borrower has a clear understanding and agrees to the formula and process, the
Financial Package will be completed.
VII. Budget
Funds received will be utilized to support staff and manage work load of Loss Mitigation
Staff. Marketing efforts will be stepped up to include; mailings, automated phone calls to
homeowners /borrowers.
l
Page 8 of 11
VIII. Key Personnel
The key personnel who will be responsible for completion of the Loss Mitigation
efforts as well as other.personnel involved in the project are as follows:
Certified Loss
Mitigation Specialist
CLMS Assistant CLMS Assistants CLMS Processors
Specialists
IX. Evaluation
BMJ Community Development, Inc. will monitor homeowneriborrower clients
from the established municipal area and document their progress in their loss
mitigation efforts. Carefully abiding by laws established to protect the privacy of
the homeowner/borrower, we will prepare a report that categorizes the efforts to
successfully assist homeowners. We will quantitatively report in the following
categories:
LOSS MITIGATION OPTIONS
1. Special Forbearance (Type I & II)
2. Loan Modification
3. Delinquent Refinance
4. Partial Claim
5. Pre - foreclosure Sale
6. Dee -in -Lieu
7. Bankruptcy
X. Endorsements
The individuals below have not read this proposal, however they are professionally familiar
with the works of our Executive Director and can provide a character reference.
The Honorable James Bush, State Representative
The Honorable Oscar Braynon, State Representative
The Honorable Kendrick Meek, Congressman
The Honorable Judge Mills Francis
The Honorable Gary Siplin, State Senator
The Honorable Charles Dusseau, Commissioner
The Honorable Carrie Meek, Retired Congresswoman
The Honorable Larcenia Bullard, State Senator
Barbara Howard, Consultant
Barbara Howard & Associates
Willie Brown, Realtor
Brown Realty
Ann McNeil, President
MCO Construction
Joel Jacobi, Attorney -at -Law
Dr. Courtney Williams
Page 9 of 11
Andrew Demos, Attorney -at -Law
Tony Robinson, Former City Manager
City of Opa Locka - Opa Locka Flight Line
Charles Spane, Realtor
Elite International Realty
Ron Book, Attorney -at -Law
Blanca Cobo, Vice President
Banco Popular
Opal Jones, Director
Miami -Dade Housing Foundation
Frank Wollen, Clerk
City of North Miami
XL. Next Steps
Charles George, Chairman of
the Board
Florida Memorial University
James Robinson, President
JP Aviation Investments, Inc.
Sandy Walker, Publisher
The Gospel Truth
Patrick Jean, Banker
Wachovia Bank, NA
Lisa Stewart, Specialist
Title Consultants
Harvey Ruvin, Clerk
Miami -Dade County
Your first step is to fully fund this request for Emergency Loss Mitigation Intervention
Services.
• Appoint a municipal representative to assist in promoting this program from
within the City your citizens.
Coordinate Press Releases to encourage homeowners to contact us directly
Page 10 of 1 1
XII. Appendix
US Department Of Housing & Urban Development Certification
Page 11 of 11
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