If you are facing foreclosure you have more foreclosure defenses than you may realize. The most often used foreclosure defense is to file for bankruptcy which will buy you some time with an immediate stay of any foreclosure proceeding, but at the end of the day when your bankruptcy is discharged, the bank is going to be waiting with a motion to lift the stay on your foreclosure and push forward to foreclosure on your property. It may very well be that bankruptcy is your best alternative in the event that you have a large amount of medical bills or credit card bills or other unsecured debt to have discharged. If you are considering bankruptcy ONLY because you are facing foreclosure there are alternatives. There are several other bankruptcy alternatives. If you find that your lender or mortgage broker violated RESPA or TILA or HOEPA when your mortgage was underwritten you can have an attorney stop your foreclosure by filing a TRO or temporary restraining order on your trustee. The courts are granting these fairly liberally. This will buy you time and force your lender to the negotiating table as they will see a potentially damaging and costly suit coming and will want to mitigate their losses.
This process can stop the foreclosure and give you the time you need to negotiate a loan modification and place your lender in a bad negotiating position. This is doubly true if we find that the bank has committed a significant mortgage violation that could result in a rescission of the mortgage. We find these mortgage violations in almost ALL variable rate mortgages. Rescission, for those of you who have not read it’s description in other articles on this site results in the bank being forced to give you back all of the interest payments you’ve made from the origination of the mortgage AND all of the fees your were charged on your final settlement sheet or HUD-1. Rescission DOES NOT GET YOU YOUR HOME FOR FREE! But it does put you back into the position you were just before your loan funded and really places the bank in a painful position. The deed of trust, which is the lenders security interest in your property is REMOVED. Which means you still owe the bank what you borrowed (less the moneys you have paid to the bank over the life of the loan and the fee reimbursements) Now you still own the property and the bank is NO longer secured. They no longer have a security interest in your property so the debt becomes non-secured. This means you have taken away the banks ability to foreclose. No security interest, no right to foreclose. Rescission, which is your right if certain violations are found, is a very powerful tool to force the banks hand in modifying your loan and getting a principal reduction.
It is a wonderful and powerful foreclosure defense. You need to obtain a forensic loan audit to effect a rescission. We will be glad to look at your documents for free to determine if mortgage violations exist. If they exist, then you can choose to have the complete forensic loan audit. Now there is yet another foreclosure defense. It works whether or not you have obtained a forensic loan audit. There are distressed property Realtors’ who are experts at short sales. We happen to work with one of the best in Northern Virginia. If you are so buried in a property with hundreds of thousands of negative equity and just want out. Or, you are just thinking “screw it, I’ll let the bank have my property and good riddance! I owe way more than its worth and I’m just tired of the stress!” You might want to think again. We have a wonderful Realtor who will list the short sale AND get a buyer quick by pricing the property correctly or using one of our real estate investors and then stop the foreclosure by obtaining a quick offer and running the offer to the lender. This will stop the foreclosure while the bank considers the offer. The reason you would prefer short sale as a foreclosure defense over Foreclosure is simple. You can borrow again in only 2 years if you short sale. If you allow the Foreclosure, you will no be able to borrow for another 5-7 years. It is the worst stain on a credit report because it shows that you didn’t even try. Short sale is a good foreclosure defense… Further, if you have found violations in your mortgage documents, your lender is likely to leave you alone regarding the deficiency judgment or waive it altogether at settlement if you waive your rights to sue the bank. If you have questions feel free to contact us.