Business Innovators Radio - Interview with Kevin Coffey & Christina Keller with A Brighter Future Discussing The Devastating Financial Consequences of Foreclosure

Episode Date: June 21, 2024

Kevin and Christina, a couple of Colorado folks who know what it’s like when things get tough. Kevin grew up in North Denver, and Christina in Thornton. Life can throw some real curveballs, especially when it comes to keeping a roof over your head.But they also know the pain of uncertainty and loss. Kevin’s family faced the heartbreaking reality of foreclosure when he was younger. He watched as their home, filled with love and laughter, slipped away. Looking back, he wishes his family had been thrown a lifeline that offered choices. They’re not just another option; we’re a lifeline, a bridge to a brighter future by offering you choices. Choices like:Learn More: http://www.abrighter-future.comInfluential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-kevin-coffey-christina-keller-with-a-brighter-future-discussing-the-devastating-financial-consequences-of-foreclosure

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to the influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us Kevin Coffey and Christina Keller with a brighter future and we'll be talking about the devastating financial consequences of foreclosure. Guys, welcome back to the program. Well, thank you, Mr. Saunders, for having us back again. Thank you, Mike.

Hey, you're welcome. And I know we've been talking about the process and, you know, like the nuts and bolts and what to expect. And then one time here in our series, we talked about the emotional aspects, which is really important because I think a lot of times people look only at the financial consequences because you lose your house, you lose money. But those emotional consequences are so important. But at the end of the day, when the dust settles, there is a financial consequence of foreclosure. What are some of those effects that people need to be aware of? Yeah, actually, there's quite a few, Mr. Saunders. We, you know, people don't realize it.

But when a bank or lender goes and sells their house, if they don't recover the money they lent to the homeowner after the foreclosure sell, the lender can report the loss, the deficiency to the IRS. And the homeowner ready for this picks up the taxes on the deficiency. As if it's income. Absolutely. And another thing could happen. Let's say they sell a house. They don't report the deficiency. They can come after the homeowner for the difference.

I don't think people realize that. So, I mean, there's a couple of consequences that can happen after a foreclosure cell that the borrower doesn't realize can happen. So I want to just pause here and just kind of clarify that because that's a big point. I think a lot of people just think I lost my house to foreclosure. I moved out. But that letter could come one day where it's talking about what you just said. Now, you are not and we are not legal advisors, tax advisors, things like that.

But just talking about the industry, if a house sold for less than what was owed, that homeowner, they're already out of the house into another rental home. or apartment, but they might owe more money even after the house sold because it sold for, you know, a smaller amount. And that's a really scary feature aspect. And then worse yet, here comes Uncle Sam that says, oh, and by the way, you know, you owe this much money as income and you're like, I didn't get any money. But yet it shows his money because it was a deficiency. You got that right. And that's what you're shocker. And you know, think about this. If, whether they send you a taxable bill or whether they come after you for the difference in the deficiency, you know, that's going to lead to other financial problems like bankruptcy,

taking money out of a retirement account, delay in retirement account. I mean, thinking about how devastating this is and possibly even moving into a rental because they're going to ask for a larger deposit, and we'll talk a little bit later in the podcast about that, but it can be devastating. know down the road as well. That is huge. Okay, so possible tax consequences. Now, guess what?

If you owe that money and you've already moved on, that can lead to things like bankruptcy, right? Absolutely. I mean, think about it, if they're coming out for money or taxes, you know, a lot of people might decide to file bankruptcy. And like you said, we're not attorneys. We're not giving any legal advice, but it's an option. And then, you know, I do financial planning.

I've done that for well over 30 years, as you know. You know, the deficiencies or people need money, their go-to might be their retirement account, unfortunately. And, you know, they're going to delay when they want to retire. I mean, can you imagine thinking you're going to retire at 59 a half and now you're looking at age 70? Yeah. It's probably a pill to swallow. And even if you had been working at a job and maybe had some money set aside in retirement accounts and you thought, let me just access that to whatever, maybe to help out with a foreclosure process, that could trigger another aspect of penalties and taxes and things like that. So there's a domino effect when you're talking about the financial consequences.

Yeah, that's a great point. You know, you brought up a super point. You know, you got the prepayment penalty, right, on qualified. account. So now you're dealing with the prepayment penalty from the IRS. And it's just, that snowball could just roll and rolling. So you don't know we're talking about some things financially out of pocket that could affect you. But, you know, let's talk about credit scores, right? You know, everything in our world is driven on credit scores. And it could take three years, Mike, or even more to restore people's credit score than where they were. And that's if, here's if,

they make the payments on time for three years or longer. So, you know, you now have a credit score to deal with. And then the foreclosure stays on your report for seven years. I mean, it just snowballs. And, you know, these things we just talked about, Mike, you know, the consequences of taxes or maybe deficiencies come after the difference in credit scores, you know, those problems. You know, they start snowballing some other issues like difficulty getting into a rental property. So, you know, think about it, they're going to want a larger deposit. They may require

co-signer. And it's going to limit your rental choices. You know, a lot of these big rental, you know, these big reed companies that are booming Colorado right now and building 400 or 500, 600 units, you know, you've got to fit in their box. And if you don't fit in their box and they don't like your credit score or the fact you just had a foreclosure, they're not going to rent to you. So now you're looking for places that are going to rent to you and it really limits your choices. Yep. Well, another thing about the credit scores that I think people don't pick up on, it's kind of like, oh, yeah, I understand that. But then you didn't understand this piece, this piece, this piece. So yes, if your credit score drops because of this,

it's going to be a length of time before you can get into another house or maybe it's going to impact the next department you rent. But also, what if you needed to go, get other things that require a credit report pulled, like if you wanted to go rent a refrigerator or rent furniture, potentially, now we're not credit analyst, but potentially having that lower credit score and a foreclosure is going to make the cost of you getting that next car or furniture or cell phone. Even if you did get approved, it's going to cost more money. So it's not just your residence or where you're going to live that we're talking about. When your credit score drops, it's going to impact many things.

You know, it does. It's that snowball effect that we talked about about when pulling money out of your retirement account. You know, you have extra taxes. Well, think about this. You know, when your credit score drops, you know, when you need the money the most, they're going to charge you even more interest for it. So how is that rubbing salt in a wound, right?

You need money. You're in financial hardship. And they're like, well, we're going to be a predator. We're going to even charge your more interest on money that you need. need, or even some of the credit card companies can close your account. They can decrease your limits or, and like we mentioned, increase your rate. Now, do you feel or have you seen that credit card companies can do those things even if you're making those payments on time? So if for some reason they found out about the foreclosure and you're up to date on your payments,

you're saying that those negative things could happen even if you're up to date? Yeah, I mean, a lot of the credit cards in their disclosures that no one ever reads says that if you have a drop in credit score, you know, they're going to change the terms of your credit card, which they can do by law. And so many of the companies, and I'm not saying all the credit card companies will do this, but, you know, many of them have the right to increase your interest rate if your credit score drops. How about this one, ready, Mike? How about if your income drops? They can close your account. So you know how they go in and you update your annual income and, you know, they're pushing you for financials? Well, a lot of times if you answer it in a way that they don't like where they think they're at higher risk, they have the ability to close accounts.

I don't know if it's a law in Colorado or if, you know, some companies do what everybody does. But there's a lot of what is inside those disclosures. So there's a lot of things that can happen. people. Well, I guess, you think about it, when they granted you the credit back whenever you opened that up, you made whatever amount of money, your credit scores, whatever. And if your income dropped substantially and your credit score dropped substantially, that would be a different scenario. So I think it's kind of interesting, like the fine print that nobody ever, you know, you know, reads. These are some things that could potentially really impact in a negative way.

Absolutely. Wow. We haven't even discussed by another home. I mean, that's at least a five-year event before somebody's going to lend to you. Once again, you're probably going to get a higher interest rate. You know,

go back in time when I was younger, we lost our house to a foreclosure. It was devastating, not only emotional, but, you know, financial. We end up moving out of, out of the state of Colorado, one of the reasons just from the embarrassment. Another one is just a new start for our family.

But it took us 10 years, 10 years from my mom and dad to actually qualify and get into a home where they owned. So it was a long through devastation. And I think that's about what we do for people. You know, we're going to have, we throw them some options. And we're talking about that. Christina's going to talk about that at the end. But man, I wish we were around.

the Christina Kevin team, you know, years ago, because, wow, it would have been great for my family, not to go through a foreclosure with nothing. You know, that's a big piece. And the other aspect, too, and we keep talking about the domino effect of the things you don't really think about. Because I think a lot of times people like, oh, well, if I lose my house to foreclosure, then here's these negative things that happen financially. And they're all valid.

We're mentioning some of these other, you know, like another layer, another level that could that could happen. Like as an example, what if you had a whole bunch of equity in your house, you now lost the opportunity to capture that equity because you couldn't make the payments. You then couldn't sell the house because you had to move out. So the opportunity cost of there. Secondly, what you just said, which is if you had to wait five, six, seven years before you can get into another house given your foreclosure and the credit, guess how much that is costing? Well, we can't put a dollar figure on it. But if you don't have the mortgage tax deduction on your taxes, that affects you tax-wise

every single year. So now if you're renting, you've lost that. Secondly, you've lost the equity buildup. So there's those aspects like, okay, I could wait five or six years and then buy another house. Yeah, you can. And that's embarrassing. That's frustrating.

All of that. But there's those aspects that I think really, really people are not taking into consideration. I agree. You know, as you research for closure effects on credit scores, it could drop so many score 160 points. That's dramatic. I mean, if your credit score drops 160 points, you're going to have a hard time doing a lot of things.

And, you know, one of the things that just hit my mind that I wasn't thinking about is, you know, I'm in the financial service industry. And when you get a license, you know, they're going to look at your credit, you know. And there's broker-dealers and firms in our industry will not. get you appointed if you have bad credit. And I'm sure there's other industries that are the exact same way. Like as an example, way back in the day in the late 90s, I used to work in the banking industry and I know that that was a factor there.

If you have, if something happens negatively on your credit, that could affect your job. And you're going, I, I, how? And you're just befuddled. So there's these aspects of, of the ramifications, negative ramifications, financially that really I don't think people know about until they experience it. And that's what you're trying to help prevent them. Absolutely. You know, we're helping people create a brighter future.

That's what Christine and I are about. And, you know, we have a special program that we came up with. We were sitting down and talking a little bit ago. And we were talking about our background. And we're talking about the economy because I am in the industry of financial planning. We were talking about how people are going to, with interest, rates going up and other factors in the world. You know, people,

people unfortunately are going to fall behind in payments and unfortunately face foreclosure. Well, how could we go out there? Make a difference in people's lives in a positive way. Create a better world, a brighter future. And so we came up with this program. And I think it really does help a lot of people out. I know I wish our family had had the means and options as Christina's going to talk you about.

Yeah, Mike. So we have, you know, just the typical option is just purchasing a home as is and selling it. But another option that we've come up with is to partner with a homeowner. That's where we'll renovate the home, sell it, and then we'll share a portion of the net profits with them. That's just putting more money into their pockets so they can have a brighter future. we have an example of where recently we were at an auction and we saw a house in North Glen that was being sold for $285,000. After the repairs, that home increased a $487,000, which could have gave the homeowner an option of splitting $202,000.

But unfortunately, those people walked away with nothing. Wow. It was sad. It's hard to believe it. It's out there, Mike. I'm telling you, people, it's like deer in the headlights. You know, they don't think it's going to happen to them. They're in denial.

Or when, you know, they've been given all these exceptions because of COVID. You know, they're not going to foreclosure. They gave me an exception. They're now a deer in the headlights. And they don't think it's going to happen. That's what their mindset is. Then all of a sudden, it's too late. You know, now it's happened.

And now they literally walk. with very little or nothing. You know, I think that's an really interesting point you bring up that we could probably talk on the social aspect of that point there. Like, oh, everyone gets a participation award. You know, there's no losers or COVID allows us to really let people slip on by. But those are long, those days are long gone. That's been years ago.

But yet, I think that people still in the back of the mind are like, oh, you know, I think I'll be fine. so I can get nine months behind them. I'm more. I don't think people are realizing now that with inflation and the economy and all of the things that are happening, the banks themselves are feeling the pinch. So they don't have the ability to just let things slide. And they put their head in the sand and they just try to ignore it. And about the time they sit up and take notice and go, let's just get this fixed, it is too late. And then here's the, here's the big thing. And you guys can comment on this. At some point, even if they kind of ignored it for, or let's just say two months as an example.

And then they kind of, you know, wake up and go, okay, we need to fix this. It might be too late as far as the time to get something good and profitable handled. There might not be time before the foreclosure sale in some cases. It might just be like, oh, well, you know that thing where we can split the profit? I wish you'd talk to me two months ago because we could have helped you then. So talk a little bit about the time ahead of the foreclosure sale that it would take. for you guys to come in and do your best service for the client. So ready for this, Mr. Saunders, we can help a homeowner stop the foreclosure the day before

it goes to sell. There's ways to leave to pull it off. And so we have a financial foreclosure rescue kit that has all of our programs in it and different ways that a homeowner can stop a foreclosure. But, you know, that's a way that people can use this technique and stop that foreclosure the day before it goes foreclosure. It may not be the right thing for the homeowner, but it's an option. And so, Christina, how can somebody come out and maybe get at the foreclosure kit? What's the best way for them to do it? Yeah. If they're looking for more information, they can call us at 720-779-5-4-4-5-4-1-4-1-4-4-1. or they can email us at your options 89 at gmail.com or if they just want to learn a little bit more about us,

they can go to our website at www.w.a brighter hyphen future.com. Well, guys, it's just so refreshing to hear that people are noticing where homeowners can get really taking advantage of and you're stepping in with some viable solutions that are really, really helpful and honest and ethical and where everyone can like literally, I'll bet you that if you had some foreclosure, you know, kind of consultant out there that, you know, gave someone kind of a raw deal, they wouldn't be willing to sit down and have a meal with them afterwards, but I'll bet you guys would because you're doing the right thing for people and that is so unheard of these days. You know, good point. We're both and we've forgot the mansion. We're

both natives of Colorado, which means we're going to see these people. We plan on staying here. So we're going to be seeing these people. Maybe in the future, we want to make sure they're inviting us to dinner instead of, you know, flattening our tires. Yeah, exactly. And I think that that's a huge thing to keep in mind because, you know, like if someone is getting a letter from call us at 1-800, whatever, you know, there's nothing inherently wrong with that. But wouldn't you feel more comfortable with someone that's a native Coloradoan and who can come by the house and here's a local phone number and I'm going to come by and treat you the right way? That's what you. you guys are bringing it to the table. So kudos to you. Thank you so much for how you're serving

your clients. And I really appreciate you coming back on today. Hey, thanks for having us back on. Thanks for having us, Mike. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www.com.