A foreclosure is generally commenced once your mortgage is about four months late. As soon as you are served foreclosure papers you have twenty (20) days in which to reply. This reply cannot be a phone call or a letter to just your Lender. This reply must be written, and it must be filed at the Courthouse. Replying past your due date can often make defending your foreclosure more difficult, so it should be taken care of as quickly as possible.
Often the lender did not file the foreclosure properly, or did not complete prior steps that they were required to do, before filing the foreclosure. There are multiple different defenses that are available that can help you in defending your foreclosure. Sometimes, lenders have even violated certain laws that are in place to protect consumers.
At Brown, Van Horn, our first question when a client walks in with foreclosure papers is, “What do you want to happen?” Whether or not you want to keep your home is our focus. Whichever you choose, there are many different possibilities when facing foreclosure.
All these possibilities involve a close analysis of all the documents related to your loan. This includes the Mortgage Contract, the Promissory Note, and any other paperwork that your lender has sent you. All of these items help us to find defenses in your foreclosure.
Below are brief descriptions of different options you have. Every situation is different, and everyone’s needs are different. We help you make a decision based on your individual needs. Often, more than one option is utilized in order to get you the best result possible, and all of the options are services we currently provide our clients.
Loan Modification: In the loan modification process, we work closely with your lender in attempts to negotiate a monthly payment that you can afford. When hiring someone to modify your loan, you need to be very careful. First, only Mortgage brokers and Attorneys are permitted to do this service for another person. Second, while you are modifying your loan, your lender will continue to foreclose on your home. That is why, at Brown, Van Horn, while the Loan Modification team works closely with your lender in negotiating a lower monthly payment, our Foreclosure Defense team continues to defend your home, and prevent a foreclosure sale before the loan modification is complete.
Bankruptcy: While many people are hesitant to file Bankruptcy it can be a way to save your home. We will not recommend this service if we do not feel it necessary. However, should it become so, we can provide this service as well. Bankruptcy can help save your home by allowing you to make past payments in smaller increments to your lender. When this is done through the Bankruptcy Court, the lender cannot foreclose on your home. In fact, the day you file, the lender has to stop the foreclosure proceedings immediately. Should the Bankruptcy proceed as normal, and pending the chapter in which you file, the lender cannot resume the foreclosure proceedings.
If you choose to surrender your home, we help to find the best way to do this, at the smallest cost.
Foreclosure Sale: A foreclosure sale will happen if either nothing is done in response to the lender suing you for foreclosure, or if the lender is successful in court. However, if a sale happens as a result of non action it will occur much earlier than had it been properly defended. In this case, the bank takes your home, sells it at a public auction, and any money that you still owe after the bank sells the property can turn into a deficiency judgment, thereby potentially costing you more money. A negotiation can sometimes be worked out with the lender in which they forgive the deficiency judgment or agree to settle at a lower price. If your case ends with a foreclosure sale, we would partake in the negotiations, as well as help you with tax consequences that could create another potential issue. Bankruptcy can also be another helpful solution for some clients after a foreclosure sale.
Deed in lieu: A deed in lieu of foreclosure is basically an agreement between yourself and your lender that you will give the lender your deed in return for the lender forgiving your mortgage. The advantages to this choice compared to a foreclosure sale, is it will not hurt your credit like a foreclosure can, and it will not be public knowledge that you were foreclosed upon. The disadvantages are, that it is difficult to qualify for this choice, and there potential tax issues to deal with, and potentially a deficiency judgment. Should you decide a deed in lieu of foreclosure is the best choice for you, we would help to prepare the transaction, attempt to prevent a deficiency judgment, and aid in handling any tax consequences of the transaction.
Please Contact Us for more information or to schedule an appointment for you FREE consultation. See also Foreclosure FAQs.