What happens when life throws you a curveball that threatens your home, your finances, and your future? This week, join your host Corwyn J. Melette as he dives deep into the story of survival, perseverance, and success with this week’s guest, Mike Russell, founder of Hope 4 Hardship and Certified Distressed Property Expert. Mike shares his raw experience of corporate and personal bankruptcy, foreclosure, and family disputes, and reveals the critical steps to take before crisis hits.
Whether you’re navigating the aftermath of COVID-related payment struggles or just looking for a financial safety net, this two-part episode offers invaluable, tangible advice on controlling your reaction and securing your future.
Key Takeaways:
- 2:35 Mike Russell’s Background: Mike shares his 30-year journey in real estate, including his personal experience with foreclosure, divorce, and multiple bankruptcies, which led him to start his non-profit.
- 7:26 Control Your Reaction: The pivotal lesson: you have no control over how entities react, but you have control over how you react to their reaction. Mike admits his failure to do this led him to bury his head in the sand and ignore creditors.
- 9:45 You Are in Sales Mode with the Bank: Mike outlines the need to put together an “outstanding application for assistance” to convince the lender you are a “viable bet” to resume normal payments.
- 12:03 The Partial Claim Mortgage (FHA Loans): Mike details the “gold standard” retention option where HUD pays the arrearage and holds it as a 0% interest, silent second mortgage, allowing the consumer to keep their original, low-interest loan terms.
- 14:49 Hardship Must Be Proven Over: Mike emphasizes that to be considered for assistance, you must not only prove hardship but, more importantly, prove that the financial hardship is over and your income is sufficient.
- 17:58 The Frivolous Spending Warning: Mike stresses that if bank statements show frivolous spending (like trips while claiming hardship), the bank will not deem the applicant responsible, and the assistance application will likely be denied.
Tune in next week for Part 2 as Corwyn J. Melette and Mike Russell continue the conversation, diving deeper into specific strategies and how to effectively navigate the retention and non-retention options offered by lenders. Mike will walk you step-by-step through the legal timeline and pitfalls of foreclosure.
Connect with Mike:
- Contact Number: (508) 728-6465
- Website: Help4hardship.org
- Email Address: Mike@hope4hardship.org
- Linkedin: https://www.linkedin.com/in/mike-russell-3395baa/
Connect with Corwyn:
- Contact Number: 843-619-3005
- Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: Country Boy Homes
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MIKE:
Banks don’t have feelings. They don’t have to they’re not required to they don’t care about your I don’t say they don’t care You know what? I mean your story doesn’t fit into their algorithm of whether or not they are willing to assist you through this problem This is of your story, but it’s very hard for the consumer who’s going through this and carrying The struggle of whatever is going on in their life while they’re facing this It’s very hard for them to compartmentalize and focus on just the controllables And that’s what I do and the controllables are simple Can we convince the lending institution that you are a viable bet? To resume your normal payments and follow this through to term.
CORWYN:
Good morning, good morning. Great morning to you guys. Welcome to another fabulous episode of Exit Strategies Radio Show hey I am your host Corwyn J Melette, broker and owner of Exit Realty Low Country Group in beautiful North charleston, South Carolina. Hey, if this is your first time listening to this show you sir or ma’am are in for a treat because our mission here is so simple It is to empower our community through financial literacy And real estate education. Yeah, we’re trying to teach you something guys. We’re legacy building over here That is what we do gotta give a quick shout out to those who listen to us faithfully all the way from hollywood What you know, no good all the way up through monkey’s corner in the charleston region. You guys are amazing Y’all know my mama live out there in monkey’s corner, right? Look here gotta give a shout out to vanderbilt evans senior if I don’t put that senior on that thing that dude No matter what people say will jack me up. All right, so I gotta put the senior on that him and his beautiful wife elder evans Thank you guys so much for tuning in and listening. Love you I cannot say it enough and you know what that third time means I love you yet the more For my folks listening to muddy mullins. Hey the m&m mary county. Love you guys Thank you so much for tuning in guys. We got a fabulous show today. All right, we have with us a guy who has not only the story of hardship, but more importantly the story of perseverance of survival And success all that stuff goes together and he’s going to share that with you today So I want you guys to tune in. I want you guys to slow down in the kitchen Some of y’all in there making some chicken and waffles and look here if y’all are I need you to holler at your boy And let me know where you’re at so I can come on through some of y’all got some flapjack Some of y’all got some grits and eggs whatever it is I need y’all to slow it down a little bit and pay attention to what we got going on here today We have none other than Mr. Mike Russell and Mike is the founder of Hope For Hardship. There’s a story in that title and that company name and a non-profit name yet alone So guys, I want y’all to tune in Mike. How are you doing today?
MIKE:
I’m doing fantastic, man I’m, really grateful that you had me on and I’m honored to share anything you and your listeners want to know Well, look here.
CORWYN:
I appreciate it So Mike look I kind of dangled a carrot, but I ain’t telling I like for people to tell their own story I like for people to be their own author And carry their own narrative and we want to definitely tell and share your story today But Mike if you don’t mind give our listeners that high level 30, 40, 50 foot view. An introduction of who you are and what it is that you do
MIKE:
Sure, man So I’ve owned a real estate brokerage since I was 19 years old. It’s really the only real job I ever had and so I’ve been doing this about 30 years now And I experienced Most of it self-created just about every kind of struggle involved as it relates to real estate I was foreclosed on which not coincidentally led to a divorce I filed corporate bankruptcy personal bankruptcy Lost some loved ones that owned some property and had some family disputes over what was going to happen to it I made a lot of bad decisions throughout the course of my life and my career as it related finances and real estate And really created Such a wide swath of collateral damage Among my circle and the people that I care most about and it took me the better part of 10 years to remedy That collateral damage and so I started this non-profit because I turned my life around I keep doing it because I like to play a small role in helping other people turn theirs around And experience a softer landing than I did Because mine was anything but soft After 30 years of running a real estate company. Sometimes the day-to-day gets monotonous I think in anything that you do for 30 years And so I step back a little bit from that day to day and put some folks in place that I really trust to run that So I can spend the vast majority of my time if I could explain it effectively It would be helping people get out of their own way because that’s typically what we are When we face financial crisis And I really enjoy how it makes me feel to help someone feel a little more certainty in a very uncertain Filled space and that is for most average consumers in america Fighting back against a bank is a very challenging thing to do when you are at threat of foreclosure Or making a sound emotionless decision while facing divorce That’s an anomaly very challenging to do that kind of thing And so that’s what I spend the vast majority of my time now is talking to people who are at threat of losing their home by some semblance of poor decision-making paradigm
CORWYN:
So Mike, I’m gonna jump in here and so I want to set the stage for our listeners on about two to three things Then we’re going to kind of recycle this So first of all listeners guys, this is what I want you to understand and know number one I want you to think back to what the recession was and what was happening. We are not there now, but This conversation today is what happens if or what you can do if now what I also want to kind of put in here Guys doing covet many of us and you know, we talked about it here on this show Mike a lot of people are out here just misinforming people telling people don’t have to pay their mortgage during covet We know that not to be the case and we’re starting to see some residual impacts and effects of that now As people who didn’t pay then who haven’t been able to reposition either on a modification Forbearance or other workout with the lenders some of them have now faced challenges and trying to Either figure out how they’re going to come up with the arrears or what have you? And they’re starting to get pressure from the lenders now So we are starting to see that as a whole in the market But to note we’re not in that space of recession. Some people think we’ll have it Who knows I don’t know I don’t have a crystal ball if I did I’ll be hitting the lottery every day and i’ll be being matter of fact i’ll be in bali right now I wouldn’t be in tahiti I’ll be in the maldives somewhere now then one of them little huts on the water drinking up something and just enjoying myself, but Mike Your story is and what you do now is That whole preemptive What do you do if this happens? So let’s frame this from if you don’t mind Let’s kind of dig into your direct experience and then What would you and then how do you advise people who may be getting to a place of similarity? So that they can avoid if you will the same outcome that you did you learned a lesson Now you want to help people by teaching them before they have to experience it.
AD:
Yeah, let’s take a short break.
Do you remember your grandma’s front porch? You know that spot where stories were told, kisses were stolen, and sweet tea was always being sipped. Now imagine giving your family a place to make those same memories, but in a brand new, energy-efficient, and home that was built just for you. At Country Boy Homes, we help folks just like you find that forever feeling.
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Country Boy Homes, Built to Last, Priced for You.
MIKE:
So Listen, two of the worst things that can happen to anyone in america are a foreclosure and a bankruptcy, both is like the coup de grace And I was I was successful enough to do a corporate bankruptcy a personal bankruptcy and get foreclosed on so my credit was in The tank for the better part of seven years It made me unbankable in the real additional lending world. I was untouchable and would lend me five dollars So look the human condition comes at play of this right and I say this every day in my life and I try to teach it to people is We have absolutely no control how other people or entities react to things What we have control of is how we react to their reaction And that’s where I really struggle. I really struggle when the bank began to threaten me when creditors began to threaten me. My reaction, my defense mechanism was bury my head in the sand and ignore it. It was one of those F around and find out situations. The reality is look the human conditions at play. We don’t want to face the reality of struggle when we’re in the middle of it We don’t want to and not just don’t want to we don’t know how to stand up Be proactive and work towards a resolution to the problem And so even though I had been in real estate about 10 years I was still really wet behind the ears a naive kind of entitled kid And I didn’t really know what to do But that human condition stuff was also at play. I didn’t really Something I didn’t really want to lift myself up by the bootstraps and do something about this real problem And so that’s the work that I do all these years later 20 years removed from those kinds of struggles I know exactly what to do And the reality is that when we are being chased pursued by a large entity like a bank The last thing we believe is that entity is actually the only one that can help us and instead most folks that I experienced they avoid those calls or they don’t have an ability to Communicate effectively with this bank this entity without emotion frustration anger blame All of those things that come up. This is banks don’t have feelings They don’t have to they’re not required to they don’t care about your I don’t know they don’t care, you know what I mean Your story doesn’t fit into their algorithm of whether or not they are willing to assist you through this problem This is the seat of your story But it’s very hard for the consumer who’s going through this and carrying The struggle of whatever is going on in their life while they’re facing this It’s very hard for them to compartmentalize and focus on just the controllables And that’s what I can do and the controllables are simple Can we convince the lending institution that you are a viable bet? To resume your normal payments and follow this through to term the deal That’s what you need to do. You are in somewhat of sales mode with the bank You have to put together an outstanding application for assistance Requesting the bank to review your assistance application To therefore determine whether or not they will be willing to handle the arrearage And allow you to resume normal payments. So just as a perfect example We submit an assistance application with some light supporting documentation. It’s not a financial audit I mean, it’s not a forensic audit It’s a couple months bank statements some pay stubs Maybe a pnl if you have large deposits in your account some letters of explanation to explain various things You put together a package the most valuable thing we do is we help them put the package together But then we follow up with the bank every three business days So just give a status update. I just want to confirm you got that bank statement that I sent on monday Because as anyone knows out there who’s been through this you can send something to a bank 12 times and they don’t get it And adds to the frustration of the consumer they feel like they’re doing everything that’s said that follow-up is crucial So we submit the application and once it is deemed complete By the servicer or the lending institution the investors they will pause foreclosure proceedings while it is under review It’s sort of a reverse underwriting situation So instead of when you buy a house you go to underwriting when you’re trying to modify or remedy A past due loan situation it effectively goes to underwriting again You send them your point they all tell you it’s a 30-day review period and that’s pretty accurate sometime in three to four weeks They will issue what’s called a results letter in that result letter They will determine here are your retention options Meaning you can retain the home or they offer some non-retention options Which are never particularly attractive to most folks But the idea what we try to do is get them some retention options So they cannot have a housing transition that is tremendously disruptive and abrupt And they buy themselves enough time stay out of foreclosure And enter into one of the programs that they allow people to stay in their home and see the term through an example Best one available out there today Is available on from what I can gather every single fha loan out there and it’s called a partial claim mortgage and what that means HUD housing and urban development will come in Let’s say you will the biggest one i’ve seen yet is 189 thousand dollars in a rearage Paid that entire 189 thousand dollars on behalf of the consumer money paid the servicer that 189 thousand dollars And the only fair in that that the servicer asked for in return is we need you to resume your normal payments The great thing is you keep your original loan terms intact meaning. It’s not a modification And so i’m looking at one right now. I have a statement right here It’s a 2.25 30 year fixed mortgage now this you’ve got to keep those terms Which as that’s like the gold standard of mortgages Right and so he gets to keep that Stay in his property for an eleven hundred dollar a month mortgage payment instead of being forced out to go rent At 1850 or 2250 He gets to retain that property HUD When they pay that service to that 189 thousand or whatever 30 40 50 whatever your rearage is They hold that as a silent second zero percent Storing that at zero percent you still owe the money But it does not have to be settled until either loan matures you refi or you sell your home and pay off So it is a fantastic program for people And the reality is no bank advertises it they won’t even tell you it’s an option You must apply for assistance Get your application deemed complete go under the review process and have it kicked back As a retention option and that’s always the one to choose there are others You can modify the terms if that’s not available or it’s a true modification of the original terms of the note Really not very attractive today because the vast majority of the people that we’re doing this work with Are in a two three or sub four percent mortgage fixed mortgage product to do a full loan Modification that’s actually a modification of terms It’s going to term out at today’s interest rates seven plus percent and they already couldn’t afford Their eleven hundred dollar payment if you modify seven percent, it’s going to be a you know, a nineteen hundred dollar payment And so they have a litany of different retention options that they will offer
CORWYN:
But that is by far and away the one we like to see the most So one of the things in what you just talked about Mike and for our listeners guys Understand that there has to be hardship. Like you can’t just say oh i’ma stop paying my mortgage Whatever that cursory look if you will at your bank statements to see where your money is One how much money you bringing in so from employment? Verifiable documentable sources and number two where your money’s going So if they see you spending money frivolously giving money away or what have you and now you’re claiming a hardship I distinctly remember this because Mike we’ve been in this space for a while We’ve been around long enough to have dealt with and worked through and assisted people over the years And I distinctly remember a situation where someone literally just came from disneyland Have been to disney for we took the family Spent the mortgage payments there And then couldn’t pay the mortgage payment apply for modification. So Someone who does that in that situation? What do you advise them? How do you help them in that situation?
MIKE:
Yeah, so i’ll add more to what you’re saying, right? So the stuff you’re talking about is absolutely fantastic advice, right? It’s look make poor financial decisions Experience poor consequences period stop like that’s right. Like that’s just that’s the way it works Proving the hardship is not very challenging to a bank But here’s the caveat You must actually prove that the hardship is over in order to get considered For any type of assistance because don’t forget Any program that’s going to allow you to stay in your property is going to be based on the fact that the bank believes You can resume or make your new modified payments And so the reality of this situation is everybody we work with in order for them to save their property We have to be able to prove that their hardship has since been remedy And so example of hardships right there are health okay out of your control by the grace of god There are health problems Someone who faced health problems and can no longer work the death of a contributing spouse or contributing household member those types of things are very challenging to prove that the hardship is over unless The income has sustained back to the baseline level that the bank is going to require loss of income Reduction in wages was huge during covid reduction in earnings And so all those things what we have to do is by putting together this financial package We need to prove that the income is sufficient the monthly income Or the non-borrower contributors that are contributing to the household We need to be able to prove that that number maths out for the bank and so more important I guess I would say than being able to prove a hardship because Honestly not paying your mortgage for 3 6 9 12 18 months Is all the proof a bank needs that there was a hardship when it comes down to it Right what we have to prove is that the hardship is over And you are able to do it and so back to what you were talking about if you’re going to disneyland every other month And you’re spending your money foolishly You’re not going to be able to prove that your hardship is over Deal with people that they deem to be responsible in some way And that they hold up to their end of the bargain
SPEAKER 3:
That was powerful advice from Mike Russell We learned the critical financial truths about the fha partial claim mortgage and the importance of never ignoring your bank But the story isn’t over next week in part two. Mike will give you the foreclosure playbook You’ll learn the precise legal timeline and the moment you must act to avoid auction We discussed the bankruptcy trap and why filing chapter 13 can be a huge mistake You’ll hear a powerful story of a family who lost their home, but later became homeowners again Be sure to join us for part two next week Thank you Mike for being with us
CORWYN:
Guys, that was a great show today and we thank you so much for taking the time to listen to Exit Strategies Radio Show. My name is Corwyn J Melette. Yes, that is me And I thank you from the bottom of my heart for tuning in for today’s episode exit strategies is my baby, it is how I give back to our community. It is how I foster goodwill, spread good news and trustfully help you get great results. Guys, as I always say to you as I always say to you I love you. I love you. I love you, but we’re gonna see you guys out there in the streets
