Foreclosure Information
This information has been compiled to present a checklist of several key issues that may need to be addressed, or considered, when faced with a foreclosure. The objective is to minimize damages and eliminate unnecessary costs at a time when it is easy for a creditor to take advantage of the borrower's vulnerability due to the unfortunate circumstances at hand. This information may be especially useful if it is necessary to challenge, fight, stall, or prevent excessive damages or costs in the foreclosure proceeding. Nothing herein is intended as legal, or other professional advice, and should not be construed as such. It is merely a checklist which has been gleaned from years of applicable experience. Use it to “get pointed in the right direction” and then, perhaps, consult an attorney to take appropriate action on your part. By doing your homework ahead of time, you will be in a much better position to help your attorney help you (or otherwise help yourself); and save a lot of time and money in the process. Please don't hesitate to contact Ed Smith directly (no cost for a brief conversation) regarding anything on the checklist - or regarding your individual circumstances whether you are weeks, days, or even hours from a scheduled foreclosure.
The thoughts and suggestions below are presented as questions followed by some relevant comments. They are in no particular order and may or may not be an issue in your individual foreclosure. Therefore, simply check off the items that seem to be applicable to your circumstances and you want to follow up on (perhaps through more research or a meeting with an attorney, etc).
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Does the party foreclosing on you have the statutory authority to do so?
Sometimes, mortgage documents are sold/assigned to one or more third parties and, in the process, compromise the current mortgage holder's ability or right to foreclose.
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Do you understand that being foreclosed on may not constitute being evicted without further proceedings?
Many times homeowners that are foreclosed on inadvertently agree to vacate, or do vacate, their homes much faster than they have to by operation of law.
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Do you have complete copies of your mortgage documents which define the foreclosure rights with respect to your mortgage?
Your attorney will want to check these for a host of reasons which could include anything from checking disclosure and notice requirements to checking existing default remedies to checking many other terms and conditions.
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Do you understand that the foreclosure process is intended to be very intimidating and coercive in nature - and is often designed to hurt you even more than losing your property?
One tactic that often rears its ugly head is the use of a "forbearance" agreement which is often used to put the borrower at a horrible disadvantage by forcing the pledging of additional assets, or creating additional financial burdens, in order to "buy some time". Be careful about trying to "work it out" without getting some legal input and advice.
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Do you understand that extraordinary legal and other costs can be added in a foreclosure proceeding?
Many times homeowners are so overwhelmed that they just "throw in the towel" and don’t even realize that the party foreclosing must properly account for foreclosure expenses. Keep in mind that the foreclosure on your home generates income for attorneys, auctioneers, newspapers, appraisers, property inspectors, and more.
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Have you taken the time to read and review the foreclosure statutes in your particular state?
In most states, if not all states, these are readily available online.
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Do you understand that it may be to your advantage to file bankruptcy in order to "buy time" and/or keep your home?
Don’t be the least bit shy about discussing all your options with an attorney.
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Do you understand that time is of the essence?
Your attorney can tell you about the various time deadlines that need to be met in order to take certain actions to protect your rights.
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Do you have an accurate assessment and accounting regarding (a) the current value of the property, (b) all of the liens and encumbrances on the property, and (c) the resulting positive (or negative) equity in the property?
This will contribute substantially to the way you might chose to deal with the foreclosure.
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Do you have copies of all recent correspondence and records of all communications with your lender that have occurred?
Many times a lender is so large that the lender’s "right hand doesn’t know what the lender’s left hand has been doing". This may be crucial in defending against a foreclosure.
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Have you explored the possibility of a "short sale" or "deed in lieu of foreclosure"?
In the current economic climate, a lender may want to accept a discounted payoff or, alternatively, accept the deed to the property in lieu of going through the foreclosure process.
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Can you make an arrangements to remain in the property (on a temporary or long-term basis) after foreclosure by renting or leasing?
This might be organized in advanced of a foreclosure; either with the lender to whom you give up possession or with a buyer who purchases the property at foreclosure (who would like an amicable transition in ownership as opposed to a difficult eviction process in court).
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