When you are past due on your mortgage and your lender is threatening foreclosure, it can be overwhelming. You may be wondering what you can do to try to save your home. While no two cases are identical, most homeowners have several options available to them. Below are a few actions you may want to consider, but it is important that you confer with an experienced attorney to discuss which option is best for you.
Defend the foreclosure action
Many individuals do not realize that they can fight a foreclosure action. There are numerous defenses that may be available to you, including the lender having improper documentation to support the lawsuit. You may also be able to challenge unconscionable mortgage terms or unfair lending practices. There are numerous other possible defenses and we can help you explore all of them. If you are an active military member, you have special defenses available to you. In many cases, we can help you obtain a waiver of the deficiency balance, extend the sale date and even cash in exchange for your keys. If a settlement cannot be reached, we will take your case to trial.
Modifying your mortgage can provide significant financial assistance by providing you with more beneficial terms. Each lender has their own way of handling mortgage modifications and the process can be difficult, so it is important to seek assistance from an attorney experienced in handling modifications. One of the most significant factors is whether you have equity in your property because your mortgage lender is more likely to agree to a modification if the lender stands to lose money in a foreclosure. If you have equity in your home, the lender is more likely to make a profit or at least break even in a foreclosure. Mortgage modification can be obtained directly with the lender, however, success rates are exponentially higher in the context of a Chapter 13 bankruptcy.
If you are willing to sell your house, a short sale may be a good option. The short sale process involves the homeowner obtaining permission from the lender to sell the property for less than what is owed on the mortgage loan. There are several obstacles that must be overcome to successfully close a short sale, so having a knowledgeable attorney on your side can be extremely helpful. If the bank has not agreed to waive the deficiency, a short sale may not be in the borrower’s best interests. Once the property has been sold, the borrower has no leverage to obtain a waiver of deficiency. If you are attempting a short sale without the advice of an attorney, particularly if you are relying on a real estate agent, remember that there may be a conflict of interest. The borrower obtains no benefit from a short sale with no waiver of deficiency. When the bank, usually at the last minute, refuses to waive the deficiency in writing, the real estate agent will often pressure the borrower to move forward anyway, claiming that the bank will be more likely to waive the deficiency after the short sale. Once the short sale has gone through there is no incentive for the bank to waive the deficiency. If the short sale does not close, however, the real estate agent gets no commission. This is not said to be critical of real estate agents, commissions are how they get paid for what they do. However, a real estate agent’s job is to put a buyer and seller together, not to solve a defaulting borrower’s financial problems.
If you have questions regarding how to handle a foreclosure, Contact us for a free consultation.