Hardest Hit Funds – The Most Under Utilized Non-Performing Loan Exit Strategy

In 2016 Hardest Hit Funds offer note investors an incredible tool for profitable exits. Here’s how to use them…

Craig Everett is back to share the secrets of a government subsidy that offers $21k net, and how he recouped $50k on a second lien note that had already been discharged in bankruptcy.

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Get a download of the Hardest Hit Fund strategies and transcript of this podcast

If you haven’t yet; check out part one of this series with Craig and learn about the two loan programs that are giving note investors hot exits on seriously delinquent paper.

Pink Unicorns – The Fed’s Hardest Hit Fund

There 18 States offering cash to mortgage note investors for helping distressed property owners. Being severely underutilized, these programs have earned themselves the nickname ‘Pink Unicorns’. Craig Everett and his team report helping thousands of note investors cash in, and bank more for their distressed paper assets.

The big problem Hardest Hit Funds faced was that the government went to the consumer. They advertised and tried reaching out directly by mail after ‘approving’ a borrower. This essentially made the government loan officer. Then they got busy trying to sell the deal to loan servicers. But FHA, Fannie Mae and Freddie Mac refused to take a ‘haircut’ on any principal balance write-downs. And we’ve discovered the majority of loans in America don’t qualify.

Still Cairn Advisors engineered a work around solution they’ve been using since 2010.

5 Hardest Hit Fund Programs to Put More Money in Your Pocket

Craig has specifically been leveraging Hardest Hit Funds via four key programs. These are available in 18 states, typically those with high unemployment rates and negative equity rates in foreclosure. This includes; Alabama, California, Florida, and Nevada.

Originally these programs were set to expire on December 31st 2017, but have now seen added $2B in funding added, and have been extended through 2020. This makes them excellent to use on existing portfolios of NPNs, and for strategizing new acquisitions.

Each state has their own programs and guidelines, but they generally fit into these five boxes:

  1. Reinstatement for non-performing mortgage loans with up to $54k to bring loans current
  2. Principal reductions – a dollar for dollar subsidy from the state up to $100k
  3. Lien elimination program for second mortgage liens – usable even if the debt was washed in BK
  4. Short sale assistance
  5. Unemployment program – states have given away most money for this program giving asset owners 6-24 months of payments paid by the state for borrowers on unemployment

Some of the beautiful highlights of using this tactic include:

  • No credit score requirement, and can be in foreclosure
  • Can use multiple programs to double up on government subsidies
  • Can be tag teamed with NPL refinances to get up to 98% of FMV on notes

Find Out if Your Notes Qualify for Hardest Hit Fund Cash, for FREE

For clients Craig, and Cairn Advisors handle the outreach to borrowers, educates them, qualify them, prepare net sheets for asset owners, and even evaluate the tape for new acquisitions.

The costs for this is only based on a Success Fee. That means if you don’t get the cash, you don’t pay out a penny! The firm even offers referral fees if you know other note investors and holders which may have deals.

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