You Have Options
Every foreclosure case is different, and we have multiple tools that we use to help families save their homes. In many cases today, banks and servicers wrongfully foreclose. The underlying reasons are many, but in all these cases we can file suit against the foreclosing party and obtain a temporary restraining order that stops the foreclosure. In other cases, the homeowner simply has fallen behind in payments, or an ARM has reset to an unaffordable payment amount. Even in these cases, saving the home is possible through tough negotiations and legal actions.
As each case is unique, the only way to assess your options is through an individual consultation. We are happy to advise you, anytime, free of charge.
For more information about the various ways we can help YOU, please read below:
Forbearance
An Agreement to Stop Foreclosure
In a mortgage forbearance, your bank agrees to refrain from foreclosure in exchange for your promise to bring your mortgage current. This is done by entering into a forbearance agreement, a written contract between you and your mortgage company that outlines your plan to catch up on your arrearages (overdue payments, interest, and penalties).
Under the forbearance agreement, your mortgage payments are either reduced or suspended for a period of time agreed upon by your lender and/or servicer. At the end of that period, you will resume your old payments, plus make additional partial payments to cover your arrearages, and eventually bring the loan current. Alternatively, some mortgage companies will request that you make a single, lump-sum payment by a given date to cover your arrearages.
Lenders are generally more likely to enter into a forbearance agreement with you if your income has been reduced temporarily due to a hardship such as job loss, unpaid mandatory leave, illness, or other emergency. In order to qualify for a forbearance, you should be ready to demonstrate good-faith efforts to pay your mortgage and other bills, and to reduce other expenses. Many times this demonstration of good-faith involves payment of a portion of your arrearages before foreclosure will be stopped.
Beware Of Forbearance Scams
The housing collapse has spawned numerous fraudulent businesses looking to take advantage of your misfortune. Warning signs of a scam include promises that are impossible to keep, such as “guarantees” to save your home, reduce your mortgage, or repair your credit. Some will claim to have an inside contact at your mortgage company, when in fact they do not. Also, it is ILLEGAL for a non-attorney to charge up-front fees for forbearance negotiation services; this is a sure sign of a scam. Even though we are a law firm and are not subject to this restriction, we charge no up-front fee for forbearance representation.
Mortgage Modification
A Lower Monthly Payment
A mortgage modification is a written contract between you and your mortgage company that changes the original terms of your mortgage, to make it more affordable for you. These changes may be either temporary or permanent.
In order to lower your payment, one or more specific terms of your mortgage may be changed. Your interest rate may be reduced, either temporarily or permanently. Your amortization term may be extended, for example, from 30 years to 40 years. Your interest term may be changed from an adjustable-rate to a fixed-rate. Your arrearages (overdue payments, interest, and penalties) may be added to your principal balance, which is then reamortized over the new term. Your principal amount may even be reduced, although in practice this is relatively rare.
We have several possible avenues to securing a mortgage modification depending on your situation and your lender's willingness to cooperate. We can negotiate a conventional modification where it places both you and your lender in a better position than foreclosure. We can pursue a modification under HAMP (the Home Affordable Mortgage Program) if you meet the federal requirements. We can also review your closing, servicing, and foreclosure documents to determine if your lender has
acted illegally. If so, we can use legal defenses to pressure your lender into negotiating a modification that is much more beneficial to you.
Beware Of Modification Scams
The housing collapse has spawned numerous fraudulent businesses looking to take advantage of your misfortune. Warning signs of a scam include promises that are impossible to keep, such as “guarantees” to save your home, reduce your mortgage, or repair your credit. Some will claim to have an inside contact at your mortgage company, when in fact they do not. Also, it is ILLEGAL for a non-attorney to charge up-front fees for mortgage modification services; this is a sure sign of a scam.
The Sad Truth About HAMP
Due to the widespread nature of mortgage problems today, banks are inundated with individuals seeking forbearances and modifications on their own, without representation. Sadly, those individuals often don't know how to navigate the laws or the process, they fail to intimidate where it's necessary, or they simply get lost among the masses.
Compounding the problem is the inherent weakness of the HAMP legislation. While HAMP was instituted to help people avoid foreclosure and stay in their homes, the unfortunate truth is that lenders' adherence to the program provisions is largely voluntary. There is no “law” that requires banks to actually grant modifications, and worse, no penalty for those who refuse to do so, even when homeowners qualify under federal guidelines.
For these reasons, homeowners are best served by going through an attorney to seek mortgage modification.
Chapter 13 Bankruptcy
Stops Foreclosure Dead In Its Tracks
Bankruptcy is a last-resort tool for most homeowners facing foreclosure, but it is a very powerful one. As soon as bankruptcy is filed, ALL collection and repossession actions – including foreclosures – are required to stop IMMEDIATELY. This is called the “bankruptcy stay” and any creditor who violates it is subject to strong penalties, including possible money damages paid to you.
Chapter 13 bankruptcy is a reorganization of all your debts. Under the reorganization plan, you pay a single, fixed amount per month that usually covers all debts you have. As long as you continue to make your monthly plan payment, the bankruptcy stay remains in effect, and none of your creditors may engage in collections, harassment, repossessions, or foreclosures. At the end of your successful plan period (either 3 or 5 years), all arrearages (overdue payments, interest, and penalties) are either paid in full or written off, all remaining unsecured debt is wiped out, and you get a fresh start.
The way Chapter 13 differs most from other methods of foreclosure avoidance is that it fixes your entire financial picture, not just your home mortgage. Sometimes we can wipe out your second mortgages and HELOCs. Often we can lower your car payments. In most cases you will pay little or nothing to unsecured creditors such as credit cards and medical bills, unless you can afford to.
Beware Of Bankruptcy Petition Preparers and “Self Help”
Filing is only the first step in bankruptcy. Many filings, negotiations, and case events will follow, such as motions, objections, proofs of claim, and hearings. Non-attorney petition preparers are not only incapable of representing you in these matters, it is illegal for them to give you any advice regarding them. The result is that persons who have gone this route often find themselves looking for a qualified attorney later on anyway, sometimes after damage has already been done. If you choose to file bankruptcy, hire a qualified attorney to protect your interests.