Foreclosure Trends

Keith Junor asked:


Have you been served with a foreclosure?

Here are your options:

 

1) Your mortgage servicer’s loss mitigation department may provide you with a “reinstatement figure.” If you pay it, the servicer will reinstate the mortgage and dismiss the foreclosure. This option typically has a couple of problems associated with it. First of all, the servicer will not be very cooperative, even if it promises you that the reinstatement figure is on the way. Even if you successfully obtain a reinstatement figure, you still must come up with the cash to pay the amount due to stop the foreclosure.

(By the way, reinstatement figures often will include hundreds, if not thousands of dollars, in junk fees, such as a Broker Price Opinion, property inspections and other “property preservation expenses”. These fees are often charged to the borrower whether or not the cost was actually incurred or the service actually performed.)

2) You can seek a complete refinance of the existing mortgage in foreclosure. This option is limited to a very small group of people. There must be sufficient equity to entice another lender to pay off the defaulted mortgage. This becomes even more difficult if there is a second mortgage because that must also be paid off. Given the much publicized “credit crunch” on Wall Street, only those borrowers with substantial and verifiable income will most likely qualify.

3) You can place your home on the market and attempt to sell it. This may not be a realistic option because home values are still dropping each day, and you may now have no equity or negative equity. I have previously discussed the possibility of a short sale, but if you are in a foreclosure, you are under the additional pressure of time. There is only a small window of opportunity until closing on the sale of your home will become impossible before a foreclosure sale date, and your mortgage servicer will be in no hurry to cooperate. See option #1 above.

4) You can file a Chapter 13 reorganization bankruptcy. There are a bunch of excellent blogs on the subject of filing a Chapter 13 on Bankruptcy Law Network, but you can only save your home in a Chapter 13 bankruptcy if you can make the monthly Chapter 13 Plan payment. Chapter 13 can buy you time, but if your case is dismissed for nonpayment, the mortgage servicing company will resume the foreclosure. If you have regular income, this is the way to go.

5) You can give up and move out. This is an option that many people are choosing in this current economic climate. Maybe the reason you fell behind in your mortgage is a long term loss of income. You cannot meet the requirements of one of the four previous options, and you are ready to move on. There are two major problems with this option. The first problem is that you will definitely have a foreclosure on your credit report. Secondly, there is a possibility that the mortgage company will still be owed a balance after the foreclosure sale. This leads to a deficiency balance owed by you to the mortgage company.

6) You can fight against your foreclosure. It is not a given that your mortgage servicer will succeed easily in a foreclosure . . . unless you do nothing. This may sound too good to be true, but your mortgage company may have filed an improper foreclosure lawsuit. Across the country, judges are punishing mortgage companies for incomplete record keeping and for violations of law. You may have valuable defenses and counterclaims against your mortgage company that could actually prevent foreclosure and even require your mortgage servicing company to pay you damages. You may even be able to force your lender to completely rewrite the terms of your note and mortgage, enabling you to keep your home.

Here’s how you can fight your foreclosure!

How do I fight my Florida foreclosure?

http://www.mortgagelawnetwork.com

By Chip Parker, Jacksonville Consumer Attorney on Mar 28, 2008 in Attorneys In Our Network, barney frank, mortgage reform

greywolf.critter.netAs I stated in my previous article, you have a limited number of options when you are served with a foreclosure on your home. For many, the best option may be to fight the foreclosure. “How is this possible?,” you may ask. “How can I fight my huge mortgage company with all of its tall building lawyers?”

The truth of the matter is that, despite the millions of dollars spent by the mortgage servicing industry on sophisticated software to process loans, record keeping tends to be sloppy and full of errors. Moreover, the largest mortgage companies hire law firms that do nothing but file foreclosures, and the work goes to the firm that bids the cheapest price per case. It’s not that these lawyers are stupid. More accurately, their volume case load prevents them from effectively litigating contested cases, and their client, the mortgage servicer, does little to assist in the prosecution of the foreclosure case.

Are you aware that your mortgage company is probably not the same company that actually loaned you the money to buy or refinance your home? How do you know if this mortgage company has been properly assigned your note and mortgage? The alleged assignment may be legally insufficient. Does your foreclosure complaint even have copies of the note, mortgage and assignment attached? Most likely, these documents are not attached, and may not even be in the possession of your mortgage company. On October 31, 2007, a federal district judge in Ohio dismissed fourteen (14) foreclosure cases filed by Deutsche Bank for this very reason.

Your mortgage company may be attempting to substitute your original note and/or mortgage with a copy. This is called a “Count to Establish Lost Documents.” There are strict legal requirements to establish a lost note or mortgage, and your mortgage company may be unable to meet the requirements if challenged.

Your mortgage company may have inflated the balance due by charging junk fees, such as a Broker Price Opinion (BPO), property inspections, force placed insurance and other “property preservation expenses.” Additionally, your mortgage company may have placed your payments into a “suspense account” and charged you late fees as if payments were never made.

The bottom line is that your mortgage company may have filed an improper foreclosure lawsuit. You may have valuable defenses and counterclaims against your mortgage company that could actually prevent foreclosure and even require your mortgage servicing company to pay you damages. You may even be able to force your lender to completely rewrite the terms of your note and mortgage, enabling you to keep your home.

Don’t sit on your rights! You have or will be served a copy of the foreclosure complaint by a process server. You typically have only 20 days to respond to the mortgage company’s complaint, so you need to see an attorney immediately if you wish to defend against the foreclosure!



ADOLFO

Attorney William asked:


Foreclosures are up nationwide, and will continue to rise as prices continue to go flat in many markets. For some, the problem is painful. Ask New Century Financial Corporation, the nation’s second largest subprime lender, who recently filed for bankruptcy. Ask the guy down the block from you whose house is in foreclosure.

Foreclosures are up nationwide, and will continue to rise as prices continue to go flat in many markets. For some, the problem is painful. Ask New Century Financial Corporation, the nation’s second largest subprime lender, who recently filed for bankruptcy. Ask the guy down the block from you whose house is in foreclosure.

Some pundits think the rising foreclosures will bankrupt our economy, causing pain for people who lose their business or job as a ripple effect of all these foreclosures. Others think that the rise in foreclosures is a healthy adjustment to the end of a long real estate boom, and is nature’s way of taking care of a free-market economic cycle.

Who’s right? Time will tell, but it’s alarming to see politicians trying to fix this problem. Here are some of their solutions.

Give People Money

Tax the rich, give to the poor. The federal government now wants to fund programs to help people stay in their homes.

Second foreclosure-prevention bill introduced in Senate

A new bill in the Senate proposes giving money to people who can’t pay their loans. We taxpayers are confused. If these people are in trouble because they never should have been given such a loan, why should taxpayer money be used to keep them in their homes that they could not otherwise afford?

Maybe someone in Washington has the answer to that question?

Regulate Foreclosure Investors

I have written extensively about the assault on foreclosure investors that have been initiated by consumer advocate groups, resulting in a tsunami of new “Foreclosure Protection” laws across the country.

A Review of the NCLC’s “Dreams Foreclosed” Report

While protecting innocent homeowners from unethical investors is a good idea, new legislation is not always the answer. Enforcement of existing consumer protection laws and prosecution under existing criminal laws is certainly a better option than creating new laws that limit the options of a seller in foreclosure. The best solution to a foreclosure epidemic is a free market that allows investors to gobble up inventory. By hamstringing investors with complicated, punitive regulations, it will only discourage transactions and result in more properties in lender inventory. More lender inventory forces them to sell at lower prices, which hurts the entire real estate market.

Stop the Foreclosure Process

The Government of the State of Massachusetts just handed the State Banking Division the authority to put up to a two month delay on any lender foreclosure. All a homeowner has to do is file a complaint with that office.

State Orders Foreclosure Delays

It is not year clear on how many lenders this will affect, but certainly this move is troubling. If the government’s action is based on a consumer complaint, what kind of complaint deserves the kind of government involvement that stops a lender from collecting on its debt?

Certainly, any homeowner whose legal rights have been violated under state or federal law can stop or delay a foreclosure with a court order.

Opponents, of course, will argue that since these people in foreclosure can’t afford lawyers, they won’t have the means to seek this remedy. Such is life, that people who are in debt can’t afford lawyers to protect their legal rights. Do people in $1,000,000 homes deserve the same protection as people in $100,000 homes? Do lenders and their shareholders have the right to foreclose and get their collateral back?

And, think about the next logical step… will the government stop allowing landlords to evict if the problem gets bad enough?

Stop the Lenders from Lending

Nobody can seriously deny that lenders got sloppy in how they lent mortgage money over the last 10 years. As a result, many people got into loans they couldn’t pay back, and we now see the consequences.

Conversely, with the exception of gross overreaching by mortgage brokers, it’s hard to deny that most people didn’t understand the risk involved in borrowing money they couldn’t pay back. If you buy a house with no money down and a negative amortizing loan, you are gambling that you will make more money in the future and/or the price of your home will increase. If you are wrong, you lose your home. That’s the gamble. It’s like Vegas, except for one thing – the house doesn’t win when the customer loses. Everybody loses, except the attorneys who get paid to foreclose.

Should the government stop lenders from offering “risky” loans? The answer, I believe, is emphatically “NO”. If lenders go too far, they suffer financially. Thus, the market will take care of itself, in that lenders who lose profits will tighten up loan regulations, and Wall Street will downgrade or reject portfolios of risky loans.

Before you get too excited by this last paragraph, I do believe that some regulation is appropriate to protect the consumers and shareholders from getting duped in the process. Additional disclosures to both homeowners and Wall Street investors are appropriate considering the large number of defaulting subprime loans. However, if people want to borrow money under risky terms and lenders want to lend under a high risk of loss, why should the government stop them? Pawn shops, check-cashing stores and used car lots all operate on a high-level of risk.

Step Up Enforcement of Existing Laws

Instead of stopping the business, I believe the government should throw money at enforcement. Prosecute the bad people and leave the options open for people who want to do business under their own terms. There are enough existing laws that give the state and federal prosecutors plenty of room to go after bad operators, and many of them already have.

The government can put bandaids on it, but only the market can solve it the foreclosure problem. When demand exceeds supply in a given market, prices will go back up, and people will have enough equity to sell their homes. Somehow, I don’t imagine people will learn their lesson and, thus will continue the same cycle in the future. But, most Americans believe it is not the government’s job to stop people from willingly doing stupid things.

When it comes to your financial decisions, be responsible, read the fine print, and remember… “buyer beware”.

Click Here for more info for Foreclosure Problem

Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.



ISSAC