Case Study 1

Scenario Two of your long-time bank customers and investors have come to see you today to discuss how they can acquire enough cash within the next two weeks in order to assist their child's family from default on their home mortgage. The default is due to a recent, long-term medical disability. They need $20,000 to cover the mortgage payments that are past due and would like to pay off the remaining $80,000 mortgage. There will be medical bills of more than $50,000 to pay over the next year as well. Your team needs to come up with the best options to meet the needs of your customers. The customers have stellar credit, a large estate, a farm, and live debt free. Your customers live within their means and can pay back the debts in a relatively short time period.

Other Useful Information • Both customers each have $1,000,000 whole life insurance policies with a 5% loan rate. The current cash value of each policy is $89,000. • The bank can provide a second mortgage on their home up to $250,000 at 3.75% for 10 or 20 years. • Both customers have a 401k account with about $50,000 in each. The standard government deduction for taxes would be applied for early deductions. • The customers combined have $130,000 in cash on hand, $28,000 in certificate of deposits that mature at the end of the month, and a $50,000 home equity line of credit. • Their child’s family consists of the husband and wife and four children (customer’s grandchildren).