The most common question I get asked is "how can I avoid Foreclosure?" Foreclosure is the process in which your mortgage or other lien holder obtains a court ordered termination of a mortgagor's equitable right of redemption. This usually occurs only after a default by the borrower who has failed to make payments per the terms of the mortgage or deed of trust and the process starts when you receive a "Notice of Default" or N.O.D. . When the foreclosure process is complete, the lender can take your property and put if up for sale and keep the proceeds to pay off the mortgage costs and any legal costs associated with the foreclosure, and this will negatively impact your credit score by several hundred points and disqualify you for a new mortgage for at least 3 years.
So how can you avoid this? The first most obvious answer is to stick with the terms of your mortgage agreement and make timely payments. If you are experiencing financial hardship and can document that fact, but still have a solid income and the desire to keep your home, A Consumer Debt Advocate can represent your legal interests to your lender and renegotiate your existing loan. Experienced Case Managers, paralegals and Attorney's will build a case and notify your lender you are represented by legal counsel. This process will force the lender to deal directly with your attorney, and they can no longer contact you directly.
What are some examples of hardship?
-Inability to work due to health issues
-Business failure
-New lower paying job / Laid off / Loss of income
-Death of a spouse or family member
-Mounting bills
-Divorce or separation
-Cannot afford new adjusted mortgage payment
-Unable to refinance due to current lending restrictions(income doc. / LTV / Low Credit)
A loss mitigation attorney will get you more favorable loan terms IE a lower payment and interest rate. In some cases, if you owe more that the home is now worth, we may be able to get the lender to forgive some of the principal on your loan, or even let you add missed payments to the principal balance or provide you with a structured repayment plan for past due balances.
Loss mitigation services will help you save your home by preparing a financial plan to your lender that you can afford. They will analyze your financial situation as well as the terms and income you made when you were approved to determine if there is a case for predatory lending. All of the facts surrounding your case will be presented by your attorney to force the lender to renegotiate your terms so you can save your home. Loss mitigation departments are understaffed and trained to put off the consumer and not address your issues. Having an attorney on your side fighting for you will force them to address the merits of your case. In some cases, your financial situation may not merit a loss mitigation process, and they will recommend alternatives such as a short sale or bankruptcy protection. In these cases your file will not be submittted for renegotiation plan after you are consulted about the remaining options available to you.
