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Foreclosure Prevention Financing Patent Awarded to Attorney with Tucson Law Firm Weeks & Laird PLLC
Thursday, April 17, 2008
Tucson, AZ -- On March 18, 2008, the U.S. Patent Office approved a new financing method which can provide relief to homeowners on the brink of foreclosure – without requiring government bailout assistance.
Stephen M. Weeks, a Tucson attorney, developed the system while representing homeowners harmed by predatory subprime loans. Mr. Weeks’ goals were simple: create a system to 1) make house payments affordable without needing a down payment, 2) provide the owner with the ability to gain equity and tax breaks, 3) avoid predatory terms such as negative amortization and adjustable rates, and 4) make it profitable for financial institutions to implement. Term Ownership succeeds in all of these goals.
Though originally designed with the idea of making first-time home ownership affordable, the system can also be used as a refinancing tool to save thousands, if not millions, of homeowners facing foreclosure – again, without any sort of government bailout assistance.
How does it work? A Foreclosure Example:
Assume someone bought a $220,000 house and put down 10% (financing $198,000). They financed with an ARM that has jumped up to 9% from an original 7%. The original P&I payment was $1,317.30 (+$110.00 mortgage insurance for a total of $1,427.30). After two years of payments, the balance on the note is $193,831.97. The new payment is $1,593.15 + $110.00 ($1,703.15).
Since purchasing, the owner's property has dropped in value to $200,000. The newly adjusted payment is too much for the owner: They don't have the equity to sell the property, nor can they refinance traditionally for a lower payment. They are a foreclosure waiting to happen. Or they can refinance into Term Ownership, remain an owner and be secure.
When refinancing, the Owner pays 30% of the $200,000 Fair Market Value – $60,000 – fully amortized over 5 years, with an investor/financial institution paying 70% plus closing costs. Subtracting out the existing equity in the property - $6,170.00, provides the amount this Owner would finance for 5 years. Here, the amount financed is $53,830.00. At 7.25%, the new P&I payment is $1,072.26 - a $630.89 monthly savings over their ARM’s new payment. It is a life saver, a home saver. The Owner continues to have the tax advantages of ownership, and, given the home's price rebounds, can again obtain equity.
For the financial institution, instead of facing an average $60,000 foreclose loss, it turns an unprofitable situation into a profitable one AND gains CRA credit AND public goodwill.
For additional information on his new financing system, contact Stephen M. Weeks of Weeks & Laird PLLC at (520) 318-1209, or email his office at weeks.laird@gmail.com.
About Weeks & Laird PLLC
Stephen M. Weeks is a Founding Partner of Weeks & Laird PLLC, a Tucson, AZ law firm. The law firm deals primarily with Real Estate, Predatory Lending, Financial Fraud and Contract Litigation.
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