CASE STUDY NO . 7
Situation : A retired gentleman ( in his late 80s ) was experiencing financial problems . His wife recently passed . He was on a fixed income and only had limited savings . He had owned his home for several decades , and it had quite a bit of equity in it . However , $ 100,000 was still due on the first position mortgage loan . Adding to his money troubles were rising utility costs , annual property tax increases , the nationwide inflation rate for food and fuel was going up pretty fast as well . There were also other homerelated cost increases as well for things such as homeowner ’ s insurance , maintenance , etc .
Problems : The gentleman recently received a NOD ( Notice of Default / Preforeclosure ) in the mail from the mortgage company due to nonpayment . Further , he had used up almost all his savings trying to keep up with all his monthly expenses .
Solution ( s ): The homeowner needed immediate shortterm funds , to keep from losing his home at a looming foreclosure auction . A financially savvy friend of the homeowner brought in a STEF who fronted the shortterm funds needed to reinstate (“ cure ”) the first position mortgage by paying off all outstanding payments owed to the lender , including any accumulated interest , late fees , and foreclosure costs .
However , STEF funding is only short term . What was needed was a longterm solution that would allow the gentleman to stay in his home of 45 years , until his passing . The same financially savvy friend of the homeowner reached out to a private investor with whom they arranged a home equitysharing arrangement . The private investor agreed to : pay off the STEF investor , and then make all homerelated monthly payments on a goforward basis ( mortgage , taxes , insurance , maintenance , etc .) The homeowner agreed to pay for the cost of monthly utilities .
The homeowner and the private investor signed a contract which stipulated that , after the gentleman passed away , the investor would sell the house to the highest bidder . The contract ( arranged by a real estate attorney ), stated that the investor was to get back all the money he had fronted + 50 % of the net profit that remained after all costs had been accounted for ( Realtor ® sales commission , closing costs , etc .). The gentleman ’ s heirs received the remaining ( 50 % net ) profit from the sale of the property . ( FYI : For a list of private and public home equitysharing firms , see : https :// money . com / besthomeequitysharingcompanies ).
CASE STUDY NO . 8
Situation : An elderly widow found herself in a financial quagmire . Her husband had handled all things financial in the household during their long marriage . Now that he had passed , she was left with major financial fallout as a result . The good news is that she owned her home free and clear .
Problem : The bad news took several different forms : First , once he passed , HIS social security payments stopped flowing into their joint checking account . Second , she was shocked to learn that ( due to some oversight on the part of her deceased husband ), HIS pension check stopped arriving each month once he passed . In other words , the pension did not include any survivor benefits . Third , being totally unsophisticated when it came to financial matters , and in order to keep food on the table , etc ., she started using credit cards to fill the gap between her monthly expenses and the meager amount of income she was receiving from her social security and a small pension . Fourth , after a short while , she completely exhausted her remaining savings in an attempt to pay off the mounting credit card debt , not to mention covering normal monthly household costs for utilities , property taxes , maintenance and upkeep of the house , fuel and insurance for her paidfor car . Fifth , she was now the lone occupant of a house that was way too big for her to keep clean and maintain by herself What she needed was a way to both downsize AND substantially boost her monthly income .
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