Dean's Live Interview on WGN News

Dean was recently featured on WGN's newscast. Since many of you probably didn't get a chance to see it, we've went ahead and put it online here for you! We've included the 4 step action plan article in here as both a Word document and directly in this post.

4 Essential Actions for Keeping Your Home Sweet Home
By Dean Graziosi

The housing crisis has been in full force since the summer of 2007, and nothing in recent times has wreaked as much havoc on the lives of homeowners. Creative, and in many cases, irresponsible loans by banks, a faltering economy and falling home values have caused record numbers of devastating foreclosurers. Millions of homeowners are still hanging on, but they are plagued with worry and are hypersensitive about their monetary struggles. At best, this kind of stress makes it particularly difficult to maintain a hopeful attitude, at worst, it can steal away all of your joy, energy and desire to keep keeping on.

This article will give you tactics to restore your hope. I have always been a big believer that “taking action, with the proper knowledge,” will get you through any challenge. So here are four specific actions you can take to protect your home, prevent your credit from being ruined or even bring in extra income in spite of the economy.

Housing Help From Your Uncle Sam

1. President Obama’s “Homeowner Affordability and Stability Plan (HASP)” is designed to help two groups of hapless homeowner. 1)Troubled borrowers behind on payments, or whose payments are more than 38% of their monthly income, and those in immediate danger of losing their home. And 2)Homeowners who are current on their mortgage but have high interest rates, little to no equity, and can't refinance under current banking rules. (Typically, homeowners that pay 31% or less of pre tax income in mortgage payments and whose loan is 105% or less of their home’s value). The plan has two basic components, providing refinancing for people whose home values do not meet the typical 80% loan to value ratio, and loan modification which decreases the amount of the monthly payment to prevent foreclosure. The guidelines and eligibility are straight forward and clear, such as the home must be your primary residence, not an investment. You can find out the full details of the program and options at http://www.treas.gov.

Loan Modification On Your Own

2. Receiving a loan modification is not limited to the president’s plan. If you can’t qualify for a refinance, but you could make your mortgage payment if your interest rate was reduced, you are an ideal candidate. Back in October of 2007, I detailed the steps homeowners could take to have their mortgage companies perform such a modification. In a nutshell you must contact your lender and ask to speak to their “ARM team” or the department that handles “loan modifications.” Many lenders now have a department devoted exclusively to this service. In most loan modifications, the terms of your loan stay the same, but your interest rate and payment are lowered. Typically you will be required to provide proof of income, list of expenses and the reason for your request. One of my friends completed this process on his own, after reading one of my course manuals back in March of 2008, and was able to get his rate dropped by 3%, fixed for the life of his loan, without paying a penny to have it done!

Discount Your Upside Down House

3. The options above aren’t a smart choice in EVERY situation. In some cases you would do better to opt for a discounted or a short sale. In a short sale, your lender agrees to selling the home for less than what is owed, i.e. at a discount or “short.” Lenders will agree to short sales if it makes sense to them financially. A foreclosure is costly to them and in many cases, selling short results in a smaller financial loss. Some examples of when a short sale makes sense for you are when you’re unable to avoid a foreclosure, or if your home is worth significantly less than value of your mortgage, or when you do not plan to live in the home long enough for a correction in the market to recoup your loss. Say your current home value is $400,000 and you have a mortgage of $800,000, you could be in for a losing battle…who knows how long it could take to increase 100%. Even if you’re only upsidedown by $10,000 to $100,000 - unless you plan to live in the home for at least 5-10 years, you may want to consider a short sale, and then start over with a different home. For example; if the value of your home is $55K less than what you owe, the lender MAY be willing to forgive the $55K debt. Before pursuing a short sale,make sure you find out and confirm the value of your property and what closing costs to you will be. Then contact your lender and find out their procedure for short sales.

Go Invest

4. While we’re all too familiar with the negative aspects of the market, the biggest “positive” is that right now is a great time to invest! I’m more of a go-getter and I look for positive solutions to problems. That is why I focus on the idea of making money and helping others, instead of the giving in to the gloom of this situation. If you create your own solutions, that are only dependent on you rather than the economy, you don't have to wait for things to change around you.

Even if you have lost a house, or a tremendous amount of equity, you can turn things around to your benefit. Here is an example of how you can do that with no money and very minimal risk. Let's say your area is down around 20%. Put out 50 offers on properties in your area at around 60% of the value. (i.e. if sale price is $200,000 you offer $120,000). I have found that you will receive about 1.6 of those 50 offers accepted. Now, you have a house where the FMV is $200,000 but you can purchase it for $120,000- you write the contract as an “and or assigns” and you can find either someone looking for a new home or an investor who would purchase that home for $145,000 because it is still $55,000 under value. You have just made $25,000 and didn't have to use credit, money or risk and you helped someone else find a great deal. Now, you can take that $25,000 and pay down your mortgage or use it for whatever other bills you may have.

This is the exact strategy that I discuss in my new book and we have hundreds of students all over the country doing this. Like I said in the beginning, it is much easier and safer to have control of your own future. Don't look at the negative elements of the economy as a disaster; look at them as an opportunity because this market has created incredible opportunities to make money.

Dean Graziosi came from humble beginnings to become an author, and has been an active real estate investor for over 20 years. His first two books “Totally Fulfilled” and “Be a Real Estate Millionaire” are NY Times Bestsellers, and his newest book “Profit From Real Estate Right Now” is already out selling his previous book, which was the fastest selling real estate book in America. Dean offers proven programs that teach people to succeed as investors, starting with little or no money, credit or experience. His free online investors website and free training calls reach thousands of people every week. For more information, please visit www.deangraziosi.com.