Foreclosures

Foreclosure is the means in which a Lending institution can repossess
your home when payments are not made. The mortgage company legally can
begin foreclosure proceedings once you have missed your payment by one
day. In certain jurisdictions, the foreclosure process takes as little
as 21 days. The foreclosure process varies from state to state, and
depends primarily on whether the state uses mortgages or deeds of trust
for the purchase of real property. Generally, states that use mortgages
conduct judicial foreclosures whereby creditor uses the judicial
system, through a process of filing a civil complaint in the county
where the property is located, to execute the foreclosure. The states
that use deeds of trust conduct non-judicial (out-of court)
foreclosures pursuant to state law.

Generally, in order to foreclose on a property, the lender must
establish in court that the mortgagor is in default. First, the lender
will attempt to resolve the default with the homeowner. However, this
usually means that the homeowner must have the funds to bring the
mortgage current, or have a definitive plan and ability to bring the
mortgage current. If the lender and homeowner do not come to an
agreement on payments, the loan become in default and the foreclosure
process begins. The attorney hired by the lender will normally contact
the mortgagor (homeowner) and again attempt to resolve the default. If
the mortgagor is unable to bring the mortgage current or make
arrangements that satisfy the lender and their attorney, a civil
lawsuit will be filed against the mortgagor. In this civil law suit for
foreclosure, the lender, after establishing that you are in default,
will ask for the court’s approval to initiate foreclosure. In
connection with the lawsuit, a lis pendens (lawsuit pending notice) is
filed to give the public notice that a pending action has been filed
against the borrower who is in default, and to collect the defaulted
debt, including causing the collateralized property (home) sold.

New Foreclosure Law Protects Tenants

Congress has passed a new law which provides protections for tenants whose landlords fall into foreclosure. Under the Helping Families Save Their Homes Act,
tenants have the right to stay in their homes after foreclosure for 90
days or through the term of their lease. The bill also provides similar
protections to housing voucher holders. The protections go into effect
immediately and expire at the end of 2012. Under most current state
laws, the tenants were protected for only 60 days. The new law mandates
a minimum of 90 days for the tenants, although individual states can
extend the time even longer.

There are several methods attorneys utilize to stop or suspend
foreclosures actions. If you are in default of your mortgage and want
to save your home, your options are limited. The time you have to
answer the default or mortgage complaint is also very limited. Your
choices are either pay the default amount and bring the mortgage
currant, or speak with an attorney who handles mortgages and
foreclosure law. Time is not on your side. Our network of independent
foreclosure prevention lawyers know how to fight to defend their
clients’ rights, and may be able to save your home. Time is not on your
side.

What is Loan Modification and can it help during a foreclosure?

Loan modification allows homeowners and lenders to change the terms of
their mortgage loan in order to help the borrower stay in the home and
avoid foreclosure. It is important to note that a loan modification is
not a new mortgage. A loan modification is the renegotiation of any of
the terms of the existing loan.

With a loan modification, it’s possible that a homeowner’s:

  • The interest rate may be decreased, either for a specified period of time or for the life of the loan
  • The interest rate may be changed from an adjustable rate mortgage (ARM) to a fixed rate mortgage
  • The time the borrower has to pay the loan back can be lengthened, therefore lowering the payments
  • The loan principal may be decreased, also lowering the payments
  • The late fees and other assessments may be waived
  • If a second mortgage exists on the property, it could be waived, cancelled, settled or decreased.
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