Remember: “The early bird gets the worm.” As foreclosure lawyers, we see many people who wait until it is too late to seek advice, or worse, act based upon incomplete or just plain bad advice. It is imperative to consult an experienced foreclosure attorney as early as possible to examine your situation and advise you of your rights. We advise individuals facing foreclosure to consult with an attorney early and before taking any action on their own, as you may wind up waiving defenses you did not even know you had.
Remember, time is of the essence. Regardless of what your lender says, you only have 20 days from the date you are served foreclosure paperwork to respond to the suit or your lender could win the suit by default.
For more information, call (904) 574-5499 or contact our Jacksonville bankruptcy lawyers online. We are happy to answer any questions and offer free consultations.
Scams to Be Aware Of
Remember: “If it sounds too good to be true, it probably is.” Everywhere we turn there seem to be self-professed “foreclosure defense” experts. Unsolicited flyers, print ads, little signs on the street corners and different stories from assumingly credible sources all guarantee remarkable results and promise you an end to your foreclosure for a nominal fee.
In this type of scam, a “buyer” approaches you, offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold. This “buyer” may suggest that you move out quickly and deed the property to him or her. The “buyer” then collects rent for a time, does not make any mortgage payments and allows your lender to foreclose.
Remember, signing over your deed to someone else does not relieve you of your obligation on your loan. Additionally, transferring property in this manner may limit your ability to defend your foreclosure or jeopardize your ability to obtain bankruptcy relief.
Phony Counseling Agencies
Some groups calling themselves “counseling agencies” may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself for free, such as negotiating a new payment plan with your lender or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services, call a HUD-approved housing counseling agency. Do this before you pay anyone or sign anything.
When you’re facing foreclosure, promises, speculation, and rumors are simply not enough. You need to speak with a licensed attorney who can evaluate your specific situation and use his or her experience in local courts in front of local judges to help you best achieve your goals. There are many kinds of defenses to foreclosures and multiple options that could help you achieve your goals. There is no substitute for speaking with a foreclosure defense attorney who can assess your situation and show you a road map to where you are trying to go.
Where Do You Go from Here?
The first question you have to answer is whether or not you wish to keep your home. Many people now have mortgages that far exceed their property values (aka being “upside down”). Even if your lender has offered reinstatement or a modification, the end result may be that you are grossly overpaying more for your home than it is worth, or what it can conceivably be worth in the future.
Deciding whether or not your home is an asset worth keeping or a liability you need to be rid of is not easy or a decision to be made lightly or strictly off emotion alone. You should contact a local experienced foreclosure attorney who can examine your financial circumstances and advise you properly.
Common Misconceptions Related to Mortgage Foreclosures
In order to protect yourself, it’s important to know the following:
- Applying for a loan modification, short sale, forbearance, or other relief with your lender will not stop a foreclosure sale.
- Almost all “trial period” loan modification programs are open-ended, and do not require your lender to actually give you a permanent modification.
- A deed in lieu or short sale, without proper stipulations or language, will not waive any deficiency, meaning your lender or anyone they assign your deficiency to may collect against you in the future.
Answering the Foreclosure Complaint
Homeowners in northeast Florida facing foreclosure have little or no idea of how to react to a mortgage foreclosure suit.
An answer to a foreclosure suit should have at least three major parts to it:
- A statement admitting or denying the allegations made in the complaint;
- A list of defenses to the foreclosure lawsuit; and
- A list of counter claims, if any.
The defenses section of the answer is the section where the homeowner states the reasons why the lawsuit should never have been filed. Each defense only needs to be a short and plain statement of the defense raised, unless fraud is one of the defenses, in which case the specific grounds of the fraud must be stated.
Some defenses include:
- Due process
- Lost notes
- Mortgage Electronic Registration Systems Inc.
- Force-placed insurance
- Lost payments
- Failure to accelerate the note
- FHA-insured loan
- Accepting payments after foreclosure
- Truth-in-lending and HOEPA violations
- Fraud, abuse, and/or collusion
- Fair Debt Collection Practices Act
- Failure to attach note and mortgage to complaint
- Incorrect notice or service
Defenses should never be carelessly raised. In addition to wasting the court’s time, unmeritorious defenses will only serve to weaken any actual defenses you may have. It takes an experienced local foreclosure attorney to evaluate the facts of your case and apply the appropriate defenses.
Defending Your Foreclosure
There are many considerations and solutions to loan arrearages, decreases in property value and the filing of a foreclosure suit. Below are explanations of some of the more common issues we address and consider when representing our clients in foreclosure.
Our advocacy often turns to helping homeowners who need more time to come to a resolution and get an approved workout with their lender. In many instances the lender will agree to postpone a set foreclosure. We communicate directly with the lender’s attorney to do this, as loan officers or other employees of the lender have no control over the legal proceedings.
The reinstatement amount is the total amount that is past due including late fees and your lender’s attorney costs. If paid, this amount will get your mortgage caught up immediately. Because of your financial circumstances in the past, you may be facing a sizable amount of past-due fees, including back payments, late fees, and legal expenses.
We understand that if your mortgage payments have become delinquent, it is likely that you are also behind on your obligations to other creditors. Your other creditors (car loans, credit cards, etc.) may frustrate your ability to obtain a resolution on your mortgage. In addition to providing legal representation in your foreclosure, we can also assist you in seeking relief from other debt that may jeopardize your ability to service your mortgage.
Second Mortgage Issues
You may not only have arrearages with your first mortgage, but outstanding issues with a second mortgage or home equity loan, too. We can help you with these financial difficulties as well.
Mediation is your opportunity to come face to face with a decision-maker for your lender and attempt to resolve your foreclosure. We assist in preparing for and attend mediations with our clients in order to work out foreclosure issues as an alternative to in-court litigation. Mediation is non-binding unless you and your lender come to an agreement, and generally nothing discussed, admitted, or offered in mediation is admissible in court if no agreement is reached.
The most common modification programs provide a temporary reduction in your interest rate and adds your past missed payments to the principal of the loan while granting an extension on your maturity date. Behind all the modification hype, the simple fact remains that your lender is not required to grant any permanent modification, only accept and review your request for a modification.
In requesting a modification, your lender will request you send them certain personal and financial information. You do not want to submit all of your personal information to your lender without it being reviewed by an attorney who can evaluate your case. Prior to contacting your lender, your attorney will review and revise a modification agreement to ensure that you are receiving the proper treatment and a long-term financial solution.
A short sale is an agreement between you and your lender to sell the mortgaged property for less than your remaining loan amount, leaving what’s referred to as a “deficiency” (the difference between the sales price of the property and the total owed to your lender). The purchaser of the mortgaged property takes ownership free from your lender’s interest in the property.
Short sales are attractive to many homeowners who are looking to surrender a piece of property which is more of a liability than an asset, and they are attractive to many lenders as they keep the lender from actually taking ownership of the property. For both lenders and homeowners, short sales are a less expensive alternative to a fully litigated foreclosure action.
The main question in a short sale is: What happens to the deficiency? Without more, a short sale alone does not prevent your lender from getting a judgement against you on the deficiency and seeking to garnish your wages, levy your bank accounts or collect your assets to satisfy their deficiency.
This is why it is important to consult a local foreclosure attorney with experience in negotiating short sales. As part of your short sale, we will seek for your lender to waive any right they have to proceed against you for the deficiency.
Can You Stop a Short Sale?
Oftentimes, a short sale may be a struggling homeowner's best option to prevent foreclosure. However, there are times where a short sale may need to be halted. If you are looking to stop a short sale contract, keep in mind the following possible requirements:
- The seller and selling agent must agree to cancel the listing
- The accepts a higher offer, cancelling the original agreement
- A foreclosure takes place, replacing the short sale
Deed in Lieu
A deed in lieu of foreclosure is similar to a voluntary repossession. You agree to sign over the deed to the property to your lender and the lender agrees to cancel the mortgage. Normally, the property is required to be listed on the open market for sale for at least three months before your lender will entertain a died in lieu.
For the homeowner, the result of a deed in lieu is similar to the result of the short sale, the property is legally transferred out of your name without the time and costs associated with a fully litigated foreclosure action. Many times, your lender may agree to a deed in lieu without ever filing a foreclosure complaint.
However, just as with short sales, you as the homeowner must be aware of any deficiency created by a deed in lieu. Without more, a deed in lieu alone does not prevent your lender from getting a judgement against you on the deficiency and seeking to garnish your wages, levy your bank accounts, or collect your assets to satisfy their deficiency.
This is why it is important to consult a local foreclosure attorney with experience in negotiating with your lender on a possible deed in lieu. As part of our representation, we will see for your lender to waive any right they have to proceed against you for the deficiency.
Your Bankruptcy Rights
Bankruptcy allows individuals who owe their lender and other creditors more money than they’re able to pay to either work out a plan to repay the money over time or completely eliminate most of their debt. Bankruptcy is a powerful tool at your disposal.
How Does Bankruptcy Stop Home Foreclosure?
If your home is currently in foreclosure, or headed there, filing bankruptcy will halt any foreclosure proceeding and stop any pending foreclosure sale. A Chapter 13 bankruptcy will allow you to pay your normal monthly mortgage payment and catch up on your missed payments over the life of your Chapter 13 plan.
Depending on your situation, in addition to catching up on your mortgage you may be able to eliminate all or most of your unsecured debt through a Chapter 13. Additionally, depending on the specific facts of your case, a Chapter 13 bankruptcy may allow you to remove or “strip off” a second mortgage from your home.
All bankruptcies will vary depending on your particular financial circumstances. In addition to representing you in your foreclosure, we will also advise you on your rights under the Bankruptcy Code and what results and relief a bankruptcy discharge could mean for you.
Will I Lose All Equity in Foreclosure?
Equity is earned by the ownership you gain as you pay into your mortgage. If you are unable to prevent foreclosure, any equity left over after the foreclosure process does belong to you; however, the more payments missed before foreclosure, the lower your equity amount. Additionally, foreclosures often come with fees that will come out of your equity, which also lowers your end amount.
How Long Can I Stay in My Home After Foreclosure?
From the time that you are informed that the foreclosure is officially happening to the moment your home sells, you have the right to remain on your property. Because foreclosures vary in the amount of time that they take to settle, your home could take two months to a year or longer to sell, giving you a place to stay during that time.
The foreclosure process varies from mortgage company to mortgage company. Each lender has different criteria and guidelines for dealing with a margin of loss. While many foreclosure cases are currently backed up in overcrowded courts, you could have as little as 90 days from the date you are served foreclosure paperwork to the sale date of your home.
Related Readings from our Blogs:
- Facing Foreclosure? How to Avoid Foreclosure Relief Scams
- Can Bankruptcy Help You Fend Off Foreclosure?
We strongly advise you to contact our experienced foreclosure defense attorneys in Jacksonville by calling (904) 574-5499 as soon as possible to discuss your rights and options, and represent your interests in this trying time.
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Florida To speak to a Jacksonville bankruptcy and foreclosure defense attorney from our law firm, call us at (904) 574-5499 or email us for a FREE consultation. We may be able to help you get your financial life back on track.