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Foreclosure Defense

Many of our clients these days are facing foreclosure of existing property. If your lender is seeking to foreclosure your home, do not despair. We have helped hundreds of our clients save their homes, unload underwater investment properties, or fight unfair lending practices.

Know your foreclosure options before you decide.

Foreclosure defense empowers you to fight back against a mortgage lender when you have been served notice of legal action to foreclose on your home. In days past, local bankers created the original note and held a homeowner’s mortgage. If you had a problem, you could drive over to the bank and sit down with him or her to discuss the issues face-to-face and come to a resolution.

The mortgage lending system has changed dramatically in the last decade. Notes and mortgages now are traded as securities, and bought and sold all over the world, usually by international banking institutions. To make this even more confusing, most of these transactions are conducted electronically by a “middleman” organization.

The lenders are free to buy and sell your note and mortgage without even informing you because, most of the times, you must agree to this arrangement to even obtain a mortgage and buy a home (it is written into the contract you signed). Most of the time, by the time your home is in foreclosure, you may not even know who actually owns your note and mortgage and who has the right to sue you.

Not knowing exactly who your lender is and where they operate makes it hard for homeowners to even get a live person on the phone, much less meet with anyone in person to discuss options for saving your home from foreclosure.

Difficult, however, does not mean “impossible.” The longer the real estate foreclosure crisis has dragged on, the more the lenders realize they need to get better at working with homeowners to find resolutions. Otherwise, they are going to become the world’s largest landlords.

 Three alternatives to foreclosure: Reinstatement, Refinancing or Short Sale.

There are many options for homeowners in default and facing foreclosure by the courts. Possible resolutions could be reinstating your mortgage after default. This means that you would pay the lender the total amount you are past due, plus any fees and accrued interest you may owe, any taxes and insurance payments the lender may have made on your behalf, and any other costs the lender has incurred on your behalf. Once you pay that amount in full, the lender would reinstate your loan under the terms you had before you defaulted (stopped making timely mortgage payments).

Another option, and one most homeowners prefer, is refinancing your mortgage. This is commonly known as “loan modification,” and it means that the lender tries to work with you by adjusting the terms of your note and mortgage to get you to a payment you can afford. This could mean extending the term of your loan (for example, from a 30-year mortgage to a 40-year mortgage) or adjusting the interest rate to a lower rate.

You also have the option of putting your house on the market to sell. In many cases, because of the downturn in the real estate marketing, owners who sell their homes must do so for less than what they owe the lender. Selling your home for less than what you owe the lender is called a “short sale” (because you are “short” the full amount of what you owe on your loan.)

If you want to short sell your house, you will have to get the lender to sign off on the deal. The lender either will accept the offer “as is,” taking what they can get, or they will deny the offer outright and tell you to go back to the drawing board (i.e., try to find a buyer who will pay more).

Alternatively, the lender may accept the offer but require the seller (you) to pay the difference between what you received from the buyer and the total amount you owe on your note. You may not have to pay this right when you sell the house, but the lender may be able to collect it from you at a later time. The amount you owe the lender after you have sold the house for less than what you owe on it is called the “deficiency.” Often when lenders get a judgment of foreclosure against you, they will retain the right to sue you later to collect this money, to seek a “deficiency judgment” against you. It is important for you to know and understand exactly what the lender is accepting.

Whichever of these options will work best for you, it is critical for you to have an attorney to advocate on your behalf. Foreclosure defense attorneys understand all the tricks the lenders will use to keep you on the hook, and we understand the very confusing legalese lenders and their lawyers toss around.

Sultana Law has helped hundreds of homeowners resolve their foreclosure issues. We are knowledgeable and experienced in dealing with lenders and their attorneys. Not only can we help you negotiate with your lender for a better deal, but we can help you prepare and assemble the voluminous amount of paperwork lenders require to work with you on resolving your foreclosure issues. Unlike other attorneys who may hire “cover” attorneys to attend mediations, hearings and other court proceedings, Ms. Haque-Bolet personally attends each of these with her clients.

Foreclosure may be stopped with bankruptcy.

Some people choose to stop the foreclosure process by filing Chapter 7 bankruptcy. As soon as you file bankruptcy in the federal courts, all legal actions pending with creditors over your debt are placed on hold until your case in the bankruptcy court is resolved. In Chapter 7 bankruptcy you may decide to give up your house and thus, your responsibility for paying your mortgage (if the court discharges it), or you may decide you want to fight for your house.

In Florida, your homestead may be protected from bankruptcy. This does not mean, however, that you get to keep the house free and clear. It just means that, since the court may discharge your unsecured debt (like credit card debt), you may now have enough money to pay your mortgage and keep your house. If you decide you cannot afford the house and want the court to discharge your debt to the bank, the bank then will seek to get the house back from you.

Some people choose to stop the foreclosure process by filing Chapter 13 bankruptcy. This approach enables you to create a new payment plan designed to help you catch up on back payments. During this period, it is essential that you continue making timely mortgage payments. There are other things that a Chapter 13 bankruptcy may enable you to do such as removing a second mortgage that is completely unsecured, and reducing high interest rates on material goods you may be financing, like a vehicle.

Litigation may be your best option.

Due to the complexities and questionable lender practices related to recent sub-prime mortgages, many homeowners have legitimate defenses and counterclaims against mortgage companies which could prevent foreclosure. In some cases, findings of incomplete record keeping and violations of the Truth In Lending Act have resulted in lenders being required to pay homeowner damages.

During the litigation process, your normal monthly mortgage payments may be suspended. That can provide valuable time for you to reinstate your mortgage, sell your home, move out or file bankruptcy. Lenders also may be directed to rewrite the terms of your note and mortgage, making it easier for you to keep your home.

Since mortgage lender errors have been found more common in recent years, it is wise to look into your legal rights before accepting the word of a lender’s representative that they can foreclose on your home. It is likely your mortgage company is not the one that originally made the loan, which brings up many questions, such as: Has the mortgage company suing you been properly assigned your note and mortgage? Do they actually have copies of the note, mortgage and purported assignment attached?

Chances are your mortgage company does not actually have these vital documents and may be attempting to substitute your original note and/or mortgage with a copy. If challenged, they may not be able to meet the strict legal requirements regarding lost notes or mortgages. Courts also have found some mortgage companies guilty of inflating mortgage balances by charging homeowners for unnecessary “property preservation expenses” such as property inspections, Broker Price Opinions (BPO) and other junk fees.

Regardless of your decision, urgent action is required!

If your lender has filed a foreclosure lawsuit against you, your time to respond is limited. Once you receive the foreclosure complaint, you usually have just 20 days to respond. So, if you want to defend against the foreclosure, you must contact an attorney immediately. If the 20-day period has passed, your attorney can advise you about some other viable options that may be available to you.

To schedule your free initial consultation, call Sultana Law today at (407) 545-2099.