Since 2007, nearly 4.2 million people in the U.S. have lost their homes to foreclosure. Over the past few years, homeowners have begun to fight back, often with a smart attorney by their side. However, many homeowners still might not know that when they receive a foreclosure letter in the mail, they have options, many of which could save their home and give them the peace of mind they need. At Shiryak, Bowman, Anderson, Gill & Kadochnikov LLP, we will walk you through each step of the process and explore every possible option to save your home.
Foreclosure happens when a borrower fails to pay their mortgage payments and the lender or mortgage investor must repossess the home. Foreclosure can also happen when the homeowner fails to pay their property taxes or homeowners association fees. During foreclosure, the mortgage lender may seize the property and sell it to recoup the money it lost from the mortgage default. The lender is allowed to take back the home because a mortgage is a secured loan. That means the borrower guarantees repayment by providing collateral. If they can’t pay back the loan with money, they use the collateral instead. In the case of a mortgage, the home is used as collateral and, upon signing closing documents, the borrower recognizes that the lender has the right to foreclose on the home if they default on the loan. This is also known as putting a lien on the title of the home. Once the mortgage is paid off, this lien on the title of the home is removed.
What you need to know
If you are unable to make your mortgage payments and are facing foreclosure, the worst thing you can do is ignore the problem. Some people assume that they can delay the process by doing nothing. Ignoring the process does not delay the problem, but can make it worse when it comes to foreclosures. Start by trying to negotiate a solution with your lender or by calling a U.S. Consumer Finance Protection Bureau (CFPB) counselor. You may be able to negotiate a lower interest rate, a temporary reduction in payment, or an extension of the loan term. If there is little hope of resuming payments and reinstating the mortgage, consider negotiating for a short sale, in which the lender allows the sale of the property for less than the amount owed on the mortgage. A lender may also accept a deed-in-lieu-of-foreclosure, with which the owner transfers the house to the lender with no further liability.
How we can help
Foreclosure laws are very complex, and the lender may have made a mistake in the process. A mistake in giving notice or in the timing may be a defense if it is not a harmless error, such as a misspelling. More commonly, the mistake involves a federal or state statute. These statutes provide for a number of remedies, including, in some cases, to cancel or rescind the mortgage. The lender may also have made mistakes before initiating foreclosure. For example, mortgages are commonly sold, and the owner of the debt often uses a separate company to “service” the loan. The privately-owned Mortgage Electronic Registration System (MERS) tracks the servicing rights and ownership of mortgages and sometimes assigns rights without recording the change in local property records. With multiple companies involved, borrowers sometimes send payments to the wrong company and are sometimes charged fees and penalties that were not authorized by the documents they signed. The company servicing the loan may have credited payments incorrectly or may have incorrectly calculated the amount that is required to reinstate the mortgage. The company that initiated foreclosure may not be able to prove that it owns the loan. In rare cases, a mortgage may be “unconscionable” because it is so unfair that it is “shocking.” Such situations typically involve people who are unable to protect their own interests, such as people with limited English or limited ability to read, who were not represented by a lawyer, and who were pressured into signing a one-sided agreement that contained an unusual term.
It is absolutely crucial to speak with an attorney to look into possible errors in your mortgage, which can potentially save your home. In consulting SBAGK, you are choosing the brightest minds in Foreclosure Defense law who will work diligently to help you through the process and possibly save your home.