Seven Sure-fire Ways to Delay Foreclosure
Often homeowners need more time and seek to delay the foreclosure process – to get more time to settle on a Workout Plan that suits them. These are the Top 7 ways to buy more time.
Constant communications with lender – That’s right, good faith communications about your plans and actions to resolve your situation and reach a resolution to the foreclosure will go a long way toward getting more time. Simply ask for more time. Most struggling homeowners do the exact opposite and avoid contact.
“Produce the Note”
– During the lending boom, most mortgages were flipped and sold to another lender or bundled and sold to investors as securities on Wall Street. In the hurry to turn these over as fast as possible to make the most money, many of the new owners did not get the proper paperwork to show they own the note. Producing the note can take up to several months…buying more time for the homeowner. In several instances in 2009, the lender has not been able to produce it at all!
This strategy of delay has been highly publicized but has not been widely successful in CA because, in non-judicial foreclosure states a homeowner must initiate a lawsuit claiming the foreclosing party (lender) may not have the right to foreclose and requesting that the court order the party to “produce the note”.
Bankruptcy – for some people in some circumstances this may be a good option. Some couples “Double-Down” and file consecutively to extend the delay even further. Bankruptcy is powerful medicine, though, so be sure you have a big ailment…bigger than just foreclosure delay.
Contesting the foreclosure in court will produce significant delays. You will need the services of an attorney and a strong case against the foreclosing party…such as violation of CA foreclosure procedures, violation of the Real Estate Settlement Procedures Act RESPA or Truth in Lending Act (TILA), or other. These violations are common – up to 75% of loans made in the go-go years (2003-2007) have violations.
In order to find the violations, you may need to order a Forensic Loan Audit. In order to effectively use the outcome you MAY need to hire an attorney. Oftentimes, though, simply citing the results of the audit can persuade your lender to accept the workout option that YOU prefer.
Short Sale – Your lender will likely postpone the scheduling of the Trustee Sale if you are proactively pursuing the sale of the home. You/your agent will need to be in routine contact with the lender to keep them apprised of the prospects for sale. Remember, if foreclosure proceeds and the lender takes ownership, they must try to sell the home several months later with even steeper losses. So, they are usually willing to postpone to enable you to sell it.
Selling the home short is WAY better for your FICO health than BK or foreclosure. Plus, short sales are painless and free (the lender pays all the costs).
Deed-in-lieu applications, Reapyment Programs, Forbearance, Deferments… and other legitimate workout options show the lender that you are being proactive. These can get you additional time to craft your best foreclosure outcome.
To learn more about managing your foreclosure – to get the outcome that YOU want – go to www.RockysMLS.com/NOD.
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