AMERICAN HOMEOWNER PRESERVATION HELPS CHICAGO FAMILY AVOID FORECLOSURE

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

American Homeowner Preservation Celebrates Five Year Anniversary

American Homeowner Preservation (“AHP”) is celebrating five years’ of providing families at risk of foreclosure with viable long-term solutions to stay in their homes. Founded in 2008 as a 501c3 nonprofit in Cincinnati, AHP pioneered the short sale leaseback as a foreclosure remedy for struggling homeowners. Faced with resistance from many banks which insisted that families vacate their homes in order to have their short sales approved, AHP changed their strategy in early 2011: now a for-profit headquartered in Chicago, AHP purchases pools of nonperforming mortgages from banks and other lenders and then offers borrowers sustainable solutions to stay in their homes, including reduced payments and discounted principal balances. If homes are vacant or families want to move, AHP offers deficiency waivers and incentive payments to cooperate with short sales in order to put the homes back into productive service.

Originally modeled to be financed with municipal tax-exempt bonds, American Homeowner Preservation’s efforts are now primarily supported by accredited investors, both high net worth individuals and institutional investors. “Doing good for families and communities and doing well by achieving attractive returns for our investors do not have to be mutually-exclusive–achieving both is possible,” said Founder and Chief Executive Officer Jorge Newbery. Since inception, AHP has assisted hundreds of families, reducing payments by an average of over 40% and cutting principal balances by an average of more than 50%. “Solutions are prompt, easy-to-understand and simply require families to choose the option they want. We avoid the endless document requests and opaque, inefficient processing of the big banks,” explained Asset Manager Michael Nelson

Further, American Homeowner Preservation has helped return hundreds of abandoned, vacant homes to productive use. “Frequently, families are overwhelmed with the threat of foreclosure, do not understand their options and get frustrated with the never-ending maze laid out by their banks. Thus, they move out, the homes get vandalized, and the neighborhood is further blighted,” explained Newbery. “Many lenders apparently hesitate at foreclosing on vacant, vandalized homes due to municipal requirements to maintain and they sell these loans to AHP. We will try to contact the homeowners and offer them a modest cash incentive to sign a Deed in Lieu or cooperate with a short sale. We prefer paying struggling families than paying lawyers to foreclose,” Newbery added. “Returning these homes to productive use is essential to the stabilization of many communities devastated by the foreclosure crisis.”

American Homeowner Preservation’s evolution continues, but the mission of helping families stay in their homes remains the same. “Even with the recent improvements in some housing markets, there are still millions of homeowners at risk of foreclosure who are struggling to stay in their homes.” said Newbery. “AHP wants to help these families.”