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Prompt action is vital by foreclosure and pre-foreclosure homeowners. Homeowners want to avoid losing their most valuable asset. Below is an outline of various foreclosure defense options that can save homes from a total, permanent loss. Let us help!
Two Different Typical Foreclosure Defense Strategies
Mortgage contract provisions are sometimes grossly unjust and can justify court modification or nullification. An example is a borrower who doesn't speak English being misled or not understanding concepts such as monthly payments or an adjustable interest rate.
Active-Duty U.S. Armed Forces Members
Pursuant to Civil Relief Act federal statutory provisions, foreclosure of mortgages originated before enlistment date require court supervision, even if applicable state law allows non-judicial processes.
Lender Rule Violations
Real estate law is very complex, and just one technical violation can stop foreclosure dead in its tracks via permanent court injunction. A lender's attorney who drafts and files legal documents in public records but does not serve a homeowner with copies can create valid grounds for foreclosure dismissal.
Wrong Mortgage Holder
Lenders cannot foreclose without satisfactory proof of legal right to receive payment, as only rightful payee(s) can collect any alleged debt. This often occurs by multiple resales of most mortgages over a 30-year loan repayment.
Mortgage Loan Service Mishaps
Valid foreclosure defenses can arise from erroneous loan servicer calculations like uncredited payments, double billing, excessive or unauthorized fees and substantially overstated mortgage reinstatement.
Predatory Lending Practices
This might include lenders that engage in illegal risk adverse litigation of various state and federal consumer protective legislation violations. For example, Regulation Z requires full disclosure of specific financial terms with explicit language in mortgage loan contracts.
Indirect Foreclosure Exit Strategies
Working directly with lenders can make foreclosure prevention faster, less costly and stressful and more successful than resorting to formal court intervention. However, not all lenders are willing to negotiate with the borrower and may feel as though they can strongarm the homeowner into simply accepting foreclosure.
Negotiation – Using a Foreclosure Defense Attorney
This may be the best way to bring foreclosure to a permanent end. Litigation can bring to light any improper practices the lender may have engaged in. Specific loan provisions can also be revised. For instance, rather than settle an entire loan to require losing homeownership benefits, a foreclosure defense lawyer in Illinois might negotiate a lower interest rate that can make payments manageable.
Liquidation / Reorganization
Depending on the stage of foreclosure proceedings, Bankruptcy Court proceedings may be a legitimate mechanism to stop foreclosure. Consumers may choose Chapter 13 debt reorganization to repay mortgage loan arrearage up to five years, or petition for a Chapter 7 debt liquidation to settle debts from nonexempt assets. The latter option may avoid large deficiency because all debt is discharged via court order once proceedings conclude.