Hearing that your home or place of business is subject to foreclosure can leave you scrambling for answers. It's wise to go into the process with an understanding of what your options may be for responding to a notice. Here are 5 suggestions a foreclosure attorney might offer.
Citing Process Violations
The Real Estate Settlement Procedures Act (RESPA) is a federal law that imposes certain disclosure requirements upon lenders. They must inform the borrower of details like the costs related to the mortgage and particular information about it.
It's not uncommon for a foreclosure law attorney to put together a RESPA letter for a client. The qualified written request (QWR) is a letter that demands the lender produce the require information and/or correct errors. Failure to respond to a QWR may be grounds for demanding monetary damages from the lender or even having the mortgage canceled.
The Truth in Lending Act is another angle to consider. It has similar requirements for reporting costs and information to borrowers, and there are also statutory penalties and actual damages attached for violations.
Bankruptcy
Pursuing a bankruptcy filing may allow you some breathing room. Nearly all bankruptcy petitions, upon acceptance, include automatic court orders that suspend collection actions until the case has been heard. Restructuring your debts may even be possible, allowing you to get the situation under control.
A Deed in Lieu of Foreclosure
The idea here is to express to the lender that you're facing financial hardships and will struggle to pay off the mortgage. Sometimes, the lender may require the borrower to attempt to sell the property before considering a deed in lieu of foreclosure. If the attempt sale fails, the deed may be delivered to the lender, thus canceling the foreclosure. This is considered enough to satisfy the mortgage, thus preventing a default.
An Additional Mortgage
Sometimes, the simplest solution is to take on new debt to satisfy the old debt. The logic here is fairly straightforward. You accept a new mortgage, take the cash from that one, and use it to settle up with the lender of the first mortgage.
Modification
Especially if there's a lot of value still hanging out there on the loan or if the loan is underwater due to a major decline in property values, it may be better for the bank to modify the mortgage. It changes the terms of the mortgage, providing a lower balance to the borrower.
To learn more, contact a foreclosure attorney in your area such as Jeffery A Fournier Esquire.
Share18 March 2020
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