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Should I Hire a Foreclosure Attorney?

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Foreclosure Attorney

If you are facing foreclosure, talking to a foreclosure attorney right away can preserve your options. There are many ways in which an experienced foreclosure attorney can help you keep your home, but there are deadlines. As time passes, options go away, and if you wait too long it could be too late to stop the process. Receiving a foreclosure notice does not mean that losing your home is inevitable.

Negotiating with Your Lender

A foreclosure attorney can help you keep your home by negotiating with your lender for loan modification which lowers your payments or by lowering the interest rate or the term of your loan. Your attorney may also be able to help you work out another agreement that satisfies the lender and avoids foreclosure for you.

Your lender may not tell you about all of the possible options for avoiding foreclosure, but your attorney can make sure that you know what all of your options are and that you pursue them properly.

Fighting Foreclosure

Lenders can make mistakes that lead to foreclosure, even when you are making your payments. Lenders sometimes fail to follow the proper procedures. Some lenders break the rules and initiate foreclosure when they simply aren’t allowed to. Once you’re caught up in the process it can be very difficult to prove that the problem is with the lender not with you. Examples of defenses a foreclosure attorney can raise in fighting foreclosure include:

  • Lender did not accept your payment
  • Lender did not properly credit your payment
  • Lender made other mistakes that qualify as breach of contract
  • Lender cannot prove it owns the debt
  • Lender did not follow foreclosure procedures as outline by state law
  • You qualify for protection under the Servicemembers Civil Relief Act (SCRA)

To learn more about getting help, if you are facing foreclosure, please talk to an experienced foreclosure attorney right away.

Do I Still Have to Pay Off My Mortgage After Foreclosure?

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Mortgage

It’s a disturbing, but very serious question. Depending on the state and other factors, after foreclosure the lender may be able to sue you for the difference between what you owed on the mortgage and what they sold your home for. An awful prospect if you couldn’t make the payments to begin with and now you have lost your home. Some states have “anti-deficiency” laws that offer protection from these lawsuits under certain circumstances.

Deficiency

If the lender forecloses on your house and sells it for less than what you owe, the difference is called a deficiency. Unless prohibited by your state’s laws, the lender can sue you for the deficiency and go after your personal assets. This is called a deficiency judgment. If your home sells for what you owe or more, you have no deficiency and the lender cannot sue. You are in the clear.

Will I Really Be Sued?

If your state allows it, there is a chance that the lender will sue you for the deficiency, but it’s not guaranteed. Many lenders choose to write off the loss rather than spending money on a lawsuit to try and get money out of someone who probably doesn’t have any way to pay them since they couldn’t make their mortgage payments in the first place.

What Should I Do?

Talk to an experienced attorney in your state to find out what the possibilities are based on your state laws and your circumstances. Anti-deficiency states typically have conditions on the protection they offer. For instance, protection may only apply if it’s the home you live in, not one you own but rent out. Most do not protect you on second or third mortgages.

If you are facing foreclosure, please contact an experienced foreclosure attorney in your state right away.

Judicial or Nonjudicial Foreclosure?

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Judge

If you get behind on your mortgage payments, you may face foreclosure. There are two types, and they are quite different. In judicial foreclosure the lender must go through the court system to take and sell your home. In nonjudicial foreclosure, the lender does not have to go through the courts but must follow the foreclosure steps outlined by state law. All states allow judicial foreclosure. More than half also allow nonjudicial foreclosure. The type of foreclosure you are facing makes a big difference in what you can expect and the options you may have. It is not uncommon for judicial foreclosure to take much longer than nonjudicial foreclosure.

Judicial Foreclosure

In a judicial foreclosure, the lender must file a lawsuit asking for court approval to sell your home to repay or partially repay what you owe on your mortgage. You will be served papers and will have a limited amount of time to respond. The type of response you should file will depend on the circumstances in your case. It may be appropriate to file and answer, but in some cases, you should file a motion to dismiss instead or you give up certain legal rights. Your response must be drafted properly.

An experienced foreclosure attorney can determine the type of response you should file and make sure it is drafted and filed properly.

Nonjudicial Foreclosure

Nonjudicial foreclosures do not go through the courts. Instead the lender is required to follow the steps set out in state law. However, you have the option to file a lawsuit and fight the foreclosure in court as you would a judicial foreclosure.

Depending on the state, nonjudicial foreclosure can happen very quickly and with very little notice. You are not served papers, and some states only require that the lender publish the notice in the newspaper or post the notice on the property or in a public place.

To learn more about judicial vs nonjudicial foreclosure, and your legal options, please talk to an experienced foreclosure attorney today.

Options and Alternatives When Facing Foreclosure

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Foreclosure

If you are behind on your mortgage, or know you cannot make your payments, you need to start looking at your options right away. There are several ways that you may be able to avoid losing your home.

Negotiate with Your Lender

As horrible as foreclosure is for you, it’s not ideal for lenders either. Try talking to your lender about options. You’ll need to explain why you fell behind on your payments and how you will be able to make your payments in the future. Your lender may be open to one of the following options to avoid foreclosure:

  • Forbearance – the lender agrees to hold off on foreclosure for a certain amount of time, and to suspend or lower your payments during that time period. You agree to get current and resume full payments at the end of the forbearance period. This is good if you are behind due to a short-term financial crisis which will improve soon.
  • Repayment plan – if you have fallen behind due to short-term financial problems, but are now back on your feet, a repayment plan may work for you. You’ll have to make larger payments for an agreed-upon length of time to bring the mortgage payments current.
  • Loan modification – loan modification changes your loan terms so that your monthly payments are smaller. It is a long-term solution. In most cases, the term of the loan is lengthened, and/or the interest rate lowered. You will need to prove financial hardship and you may be required to pass a trial period in which you make the new, smaller payments on time before the changes are permanent.

Refinancing

Refinancing is another long-term solution. Like loan modification, the goal is lower monthly payments. You’ll get a new mortgage to pay off and replace your old mortgage. You’re looking for a lower interest rate and possibly longer repayment period.

Reinstatement

Reinstatement is an expensive way to go, but if your financial crisis is over, it may be right for you. You must pay off your entire default amount and the expenses incurred by your lender as a result of the default, in one payment. Some states have laws that provide this option, some mortgages have wording that allow it, and if neither applies to you, your lender may be willing to do it anyway.

To learn more about alternative to foreclosure and how you can keep your home, please contact an experienced foreclosure attorney right away.

Foreclosure When You are Current on Your Mortgage Payments

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experienced foreclosure attorney

Don’t make the mistake of believing that simply making your mortgage payments on time is enough to keep the bank from foreclosing on your home. There are other reasons the bank may initiate foreclosure. Any violation of the terms of your mortgage agreement can put you in default, meaning the bank can initiate foreclosure and, ultimately, take your home even if you have never missed a payment.

Reasons for Foreclosure, Even When You Pay on Time

It’s easy for homeowners to think they have nothing to worry about as long as they make their mortgage payments on time. And, for many, that alone is a huge struggle. But the bank can foreclose for many reasons. Depending on the terms of your mortgage agreement, these can include:

  • Getting behind on your property taxes
  • Getting dropped by your homeowner’s insurance
  • Failure to pay homeowners’ association (HOA) dues on time
  • Failure to keep the property in a condition that meets the bank’s satisfaction
  • Transferring the property to someone else without a “due on sale” clause

The Homeowner’s Insurance Trap

You can lose your homeowner’s insurance by failing to pay or if the insurance company decides not to renew your policy for any number of reasons including claims that you have made or a recent natural disaster in your area. Lenders take insurance very seriously because it protects their investment. Simply losing your insurance will put you in default, but a lot of lenders will purchase “force-placed” insurance to make sure that the property does not go uninsured.

The problem is, this type of insurance is very expensive, often three times as high as the insurance your purchase on your own. The bank pays the premiums and then charges you, adding the cost to your monthly payment. This can quickly lead to you getting behind on your mortgage payments if you are not aware of the charge or if you cannot afford it, putting you in default and leading to foreclosure.

If you are facing foreclosure, you need the help of an experienced foreclosure attorney, even if you have never missed a mortgage payment. Please, contact an experienced foreclosure attorney right away to learn more about your rights and how you can save your home.