Foreclosure: Saving House Owners From The Foreclosure
The houseboat is drowning being lashed by the foreclosure typhoon. It must be saved. Counselors are throwing a lifeline in a desperate attempt to keep it afloat. Although more houses are going under, the positive sign is that at least some are being towed back to land.
It brings back a smile to the lips of counselor Melissa Hansen as some lenders have agreed either to slash loans or even lower interests from the original teaser rate! A branch of Twin Cities Habitat for Humanity is a non-profit organization that has shifted its focus from helping people to build houses to saving these from foreclosures. Counselors have never been happy in their dealings with loan servicers because the latter claimed that they only collected dues – they had no authority to change the original agreement. This argument does not hold good during these days of crisis. About 2.2 million Americans are about to succumb to foreclosures in 2008. Interests are rising making it impossible for them to continue with the payments. Consequently the mortgages have to be foreclosed. Fortunately due to pressure from all sides including the self-interest of the lenders, the servicers are beginning to soften and being more amenable to reason. Credit markets are running dry, Wall Street is edgy and Bush himself asked the servicers to modify terms. The carrot and stick policy is beginning to pay dividends with the Congress warning of new laws to rein in mortgage lending rules.
To add spice to the sauce an industrial trade group, American Securitization Forum having 350 members including investors, servicers and insurers, spoke openly about encouraging loan modifications to halt the march of foreclosures. As per their calculations two out of every three loans the servicers deal with have no restrictions imposed by the original lenders. Servicers are afraid of being sued by the lenders but the forum is allaying their fears.
The counselors are happy with the first signs of the weather clearing. About 20% of their clients have been benefited from loan modifications. It is a record of sorts. Their work has also increased. Last year they handled 152 cases but this year the number has already touched 206. Some of the most stubborn lenders are beginning to realize that it is better to bend rather than not break – given the magnitude of the foreclosure numbers.
Related Posts
- Despite Incentives Offered to Servicers Foreclosures Continue
- Foreclosure Prevention Measures Begin to Trickle Down
- Servicers Seem to be Repeating the Same Blunders That Led to the Foreclosure Crisis
- Treasury Bringing Back Hope to Foreclosure Victims with New Plans About Short Sales
- The Harsh Realities of Foreclosure Prevention Programmes
October 22nd, 2008 at 11:48 am
Most people do not realize that they can stop foreclosure even if they stopped paying their mortgage. Many recent cases have been filed improperly and an experienced attorney can assist with the identification and filing of substantive and procedural defenses with the court and vigorously defend your case. Due to the lender’s actions, omissions or other facts surrounding your case, you may be able to stop making mortgage payments and stay in your home while your attorney vigorously defends your property. This does not necessarily mean that you will not have to pay the loan back or completely Stop Foreclosure. It is possible to completely Stop Foreclosure if the bank or lender is in violation of the Florida Unfair Lending Act or other predatory lending practices. If the lender has committed such a violation, the entire principal and interest balance may be waived and the mortgage may be voided. This may not be relevant in your case. But, at the very least, a successful defense can do is buy you precious time to:
* Stay in your home
* Negotiate a work-out with the bank
* Sell your home for a fair price
* Refinance your home at a fair rate
* Continue to collect rent on the property
* Apply for a Court Ordered repayment plan
* File a Chapter 13 or 7 Bankruptcy
When home owners are faced with the reality of facing a potential foreclosure, many experience a state of paralysis. They don’t know what to do. Selling the home may not be an option since the equity appears to have vanished. To fight foreclosure or not? That is the question. Clouding the answer is perhaps the biggest misconception, “Hiring an attorney is not a cost-effective option.” If I can’t afford to pay my mortgage, then how in the world can I afford to hire a competent attorney? And why should I, if I am upside down in my home? First of all, EVERYONE can and should hire an attorney to represent them in their foreclosure case. There are many competent attorneys who specialize in this area. Due to the growing number of these cases, many attorneys have become “experts” in this area. Due to the fact that most of these cases are very similar, many excellent attorneys have experienced staff and can offer extremely affordable payment arrangements. Most people don’t know that once the foreclosure proceeding has started, the bank will not accept any future mortgage payments – doing so may adversely affect their ability to foreclose on your property. Furthermore, the bank pays any delinquent real estate taxes and the insurance on the property. In summation, once the bank files a foreclosure lawsuit, most of the homeowner’s expenses are being paid by the bank (mortgage, taxes and insurance). However, as the legal owner of the house with full possession, you have all the rights associated with same including residing in your home, collecting rents on the property, etc. Imagine the “EQUITY” you can save / build, if you fight the foreclosure case for a year or more. The cost of qualified legal representation is a drop in the bucket compared to your typical home ownership overhead. Time is money and the real estate and financial markets are likely to turn around. The hiring of the right attorney will save you thousands of actual dollars, in addition to thousands in time value of money. Its really a no-brainer.
Respectfully,
Frederick A Neustein