Foreclosure is a slow process, and banks can take anywhere from a few months to a year or more to auction off your home. In Florida (specifically Miami-Dade, Broward, & West Palm Beach), depending on the court schedule, it usually takes approximately 180-200 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. It will also depend a great deal on the mortgagor and how aggressively they pursue your case. Most creditors do not begin foreclosing until the homeowner is two to three months behind on their mortgage payments. Once you receive formal notice of an auction date, however, the time you have to save your home is drawing to a close. Fortunately, foreclosure doesn’t have to be inevitable. You still have options to prevent the foreclosure even if the auction date is mere weeks away. A lawyer who knows his way around the foreclosure defense laws can help you through the process.
Even after the lender gives notice of foreclosure, the homeowner has some time to consider alternatives. The most important thing you should do when a foreclosure sale date has been set is to seek legal help from an experienced foreclosure defense attorney. A competent, and experienced lawyer can help you postpone or even reverse a foreclosure using a variety of tools including:
1. Loan Modification
2. Deed-in-Lieu of Foreclosure
3. Filing for Bankruptcy
Modifying your loan is one option you have to stop a foreclosure. Your attorney can negotiate on your behalf with the bank to modify your loan and thus help you save your home. In most cases, your loan modification is likely to be accepted if you show that you are willing and able to pay back the money you owe.
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is a deed given by a property owner to the mortgage holder. It’s given instead of going through the foreclosure process and helps avoid going through litigation. It is usually an agreement by which a title is transferred to the mortgage holder and typically the borrower/property owner is relieved of any payment obligation under the note.
Filing for Bankruptcy
Should all of the aforementioned alternatives fail, bankruptcy may help in several different ways. Once you file bankruptcy, either Chapter 13 or Chapter 7, (please have a look at our blog post on the distinctions between Chapter 13 and Chapter 7 bankruptcy) the court automatically issues an Order for Relief. This order grants you an “automatic stay”, that directs your creditors to immediately cease their collection attempts. So, if a foreclosure sale has been scheduled for your home, it will be postponed, by law, until the bankruptcy is finalized. This usually takes about three to four months.
A looming auction date is always stressful, but your attorney will help you negotiate with your lender. The aforementioned foreclosure alternatives should be explained carefully and executed deftly with your attorney.
The Pitfalls Of Obtaining a Loan Modification and The Benefits of Getting a Qualified Attorney to Help You in The Process
Loan modifications can be very difficult to obtain, and lenders are under no obligation to accept your modification terms or modify your loan agreement at all. Loan Modification furthermore is a process that requires meticulous attention. Your application can fall through the cracks if you don’t have an experienced advocate monitoring your lender and holding them accountable. An attorney in loan modification law, who has experience with the courts and the modification process in Miami-Dade, Broward and the Palm Beaches can help you and advocate on your behalf.
The rules for loan modifications are unclear, and the results can be unpredictable. Modification programs have specific guidelines that need to be met and if you don’t know them you might not be successful. For example, The Making Homes Affordable Program allows homeowners to apply to their mortgage lender to renegotiate the terms of their loan under the program. Monthly payments can be decreased by lowering interest and extending the loan term; mortgage lenders can but are not required to reduce the principal of the loan. Loan modifications are strictly voluntary and a mortgage lender can reject, deny or fail to respond to a borrower completely. Lenders may claim they did not receive your paperwork, and it is not uncommon for a borrower to find himself/herself constantly resending everything to the lender. Clients who have attempted to talk to their lenders prior to seeking representation from an expert in loan modification law, have stated that sometimes the bank is even unclear in communicating to the borrower which entity actually controls their loan. This can amount to frustration and financial loss to a borrower who has not sought help from an experienced attorney.
Applications are complex and need to be completed in their entirety and furthermore, they must be 100% correct before the bank will even consider your application. However, mortgage servicing rules, mandate that a lender cannot start a foreclosure until 120 days after the borrower defaults on the loan. This time requirement is intended to provide a borrower with enough time to seek a mortgage modification, before the foreclosure. An experienced attorney working for you will know that the lender can’t start the foreclosure process while the application is pending. A lender who starts the foreclosure process prior to 120 days is in violation of the rules and is subject to the protective measures they provide for the borrower. Under these circumstances an experienced attorney is essential in helping an embattled borrower to stop or slow a foreclosure. This is a fraction of the information that a borrower needs to know before attempting to navigate this very complicated space.
An attorney can help you fill out paperwork and make sure you present your situation in the best light possible to the lender. This will help you avoid the pitfalls, saving you money and time.