Fighting to Keep your Property During a Foreclosure
Here’s what we can tell you if you find yourself staring down a foreclosure – do nothing and you’re almost sure to lose your home to foreclosure. But put up a strong fight? You might be surprised by just how good of an outcome you can achieve.
At Jacobs Legal, we’ve been fighting – and defeating – Goliath banking institutions since the housing crisis of 2008, and we know the best defenses available in any given situation. Let’s talk through a few foreclosure defense strategies that may apply to your case if you find yourself facing the possibility of a foreclosure.
What to Do If You Want to Keep your Property
Staying in your home is often the preferred path for many homeowners, and if you want to, you have options, including:
- Fight the Foreclosure – Arm yourself with a strong legal team and go to battle. The Courts are overwhelmed with foreclosures, and many bank lawyers are underpaid and overworked. Additionally, during the process, you can continue to live in or rent the property without making payments to the bank.
- Seek a loan modification – Banks that fear a difficult foreclosure may agree to changes to rewrite your loan, including reducing the principal amount owed on the loan, converting an ARM to a Fixed-rate mortgage, offering steep reductions in the interest rate, extending the payments schedules or reducing monthly payments.
- Refinance the loan – For every need, there is a market. Aggressive lenders and foreclosure relief laws could jump-start funding to rescue people in foreclosure.
- Seek forbearance – Many lenders will agree to delay foreclosure proceedings, and some will agree to cancel sale dates, which will allow you more time to decide on the best exit strategy.
What to Do If You Don’t Want to Keep your Property
Failure to pay your mortgage can result in the bank issuing negative credit reports, taking back the home, and collecting a deficiency judgment. Even if you don’t want to keep your property, putting up a strong foreclosure defense can help you negotiate from a position of strength and avoid the full economic hardship of a foreclosure.
Here are some effective defense strategies if you don’t want to keep your property:
- Short sale the property – A bank can agree to accept less than the total amount owed on the loan to release the mortgage, but the borrower needs to find an investor or buyer willing to make a reasonable offer to the bank. Depending on the lender some borrowers could have their debt forgiven if the short sale closes. However, beware of banks that demand a new promissory note or a deficiency judgment and keep in mind that you do not have to close the short sale if the bank refuses to waive the deficiency.
- Consider a Deed-In-Lieu – In a deed-in-lieu scenario, the bank avoids litigation and the borrower agrees to sign over title to the property. In this instance, some lenders will waive their right to a deficiency judgment.
- Evaluate eligibility under the Mortgage Forgiveness Debt Relief Act of 2007 – Debt relief may be available under certain circumstances. Consult your accountant or tax advisor for details.
Foreclosures can be lengthy processes, which means you have time to set up a strong defense – and for that, we’re here to help. If you have any questions about the foreclosure process, please don’t hesitate to get in touch [https://www.jakelegal.com/contact-us/] with us a Jacobs Legal to discuss your options.