Did you know that Pennsylvania has the 20th highest foreclosure rate
in the United States? In addition, Philadelphia county has the third-highest foreclosure rate in the state.
Are you facing a foreclosure on your home? While this can cause stress, you could save your home with the proper foreclosure defense.
If you’re ready to learn more about how to save your home, keep reading for six foreclosure defense strategies.
1. Consult a Mortage Foreclosure Lawyer
Every state differs when it comes to foreclosure laws. For example, the most significant difference is that while some states have judicial foreclosures, others have non-judicial foreclosures.
The laws in your state can play a role in your foreclosure defense. A foreclosure defense lawyer can walk you through the process and better understand your options.
In states with non-judicial foreclosures, you sign a deed of trust. Non-judicial foreclosures are a foreclosure that does not go through a court of law.
The bank or lender makes the decision. The advantage of a non-judicial foreclosure is that it’s much faster.
The disadvantage of a non-judicial foreclosure is that a homeowner may have fewer rights during the foreclosure process.
In a state where you sign a mortgage, you will face a judicial foreclosure. With a judicial foreclosure, the lender has to sue you in court to start the process of foreclosure.
This means you will have a chance to respond in court and prove to the judge that the foreclosure should not proceed.
The advantage of judicial foreclosure is that you have more rights and protections during the foreclosure process. The disadvantage is that it may take longer to have a foreclosure sale.
2. Negotiate With the Lender
There may be an option to negotiate with the lender. However, you may need to be open to solutions such as a short sale or a Deed instead of a Foreclosure. A short sale or a Deed in place of Foreclosure means that the lender accepts a certain sum from the homeowner.
The lender accepts this money to release the homeowner from the mortgage. It’s important to note that the lender is not legally obligated to get these options.
You may want to explore other options as well. You may wish to speak to a lawyer when negotiating a foreclosure defense. Many lenders and banks are willing to deal with foreclosure lawyers or attorneys.
Negotiate a Short Sale
A short sale is when you sell your home for less than what you owe and give the lender the proceeds. You may negotiate a short sale with the lender if you demonstrate that your home will sell for less than what you owe.
You will also need to sign a waiver of deficiency. If a lender forecloses, they can take up to $500,000 on a consumer loan. If you sign a waiver, you will not be responsible for that debt.
The advantage of a short sale is that it gets wiped off your credit report. The disadvantage is that it will hurt your credit for seven years.
Propose a Loan Modification
If you have a loan modification option, you may want to see if you can negotiate a modification. A modification is when your lender agrees to change the terms of your loan to save your home.
A modification may include a lower interest rate or a lower monthly payment.
may not be available, especially if your lender is trying to collect on the foreclosure. If your lender is trying to collect on the loan and you stop paying, then a modification may not be a solution.
3. Require the Lender to Substantiate Clear Chains of Title
You can also require the lender to substantiate transparent chains of title on the mortgage. In a judicial state, when you go to court, the lender can get required to provide proof and perfection of the claim.
If you live in a non-judicial state, you must file a civil action against the lender to require them to provide proof of a claim. You also sign a promissory note when you sign your mortgage or deed.
This promissory note stays with the lender. You must record it in a county or town office. If your promissory note gets sold to another party, the note needs to get endorsed with the name of the new owner.
Every time your mortgage gets assigned to another entity, that needs to get recorded in the county or town records office. If the lender can’t substantiate a clear chain of title for the promissory note and mortgage, it can nullify their ability to make a valid claim on your property.
4. Declaring Bankruptcy
If you are facing a foreclosure, you may be wondering if declaring bankruptcy can help you. This is a common question, and many wonder if bankruptcy will stop a foreclosure. There are a couple of ways bankruptcy could help.
If you can’t find any other solution and are running out of time, consider bankruptcy. You can file a Chapter 7 or Chapter 13 bankruptcy to stop a foreclosure. After you file, an “automatic stay” gets put into place, stopping foreclosure.
However, keep in mind that the lender can ask the court to lift the stay. They’ll have to file a motion, which could delay your foreclosure for one to two months.
Suppose you want to keep your home long-term, file a Chapter 13 bankruptcy. With this type, you will establish a payment plan, and you can pay back missed payments over a set period.
If you file a Chapter 7, you won’t have the chance to catch up on your payments or keep your home long-term. Filing Chapter 7 can delay things, but it’s not a long-term solution.
It’s important to talk to a bankruptcy lawyer
to help figure out the appropriate steps if this is the route you decide to take.
5. Prove the Lender Made a Mistake
If the lender made a mistake on your loan or documents, you could challenge your foreclosure. There are a few mistakes that can help you in challenging a foreclosure.
The Lender Didn’t Follow State Procedures.
If the lender didn’t follow state procedures or laws, you might have a defense against foreclosure. This applies to laws on recording documents, requirements on how the lender can handle your mortgage, or laws that require the lender to keep certain documents.
If there is a mistake, you can challenge the foreclosure. The lender would then have to restart the process, which would give you time to continue trying to find a solution.
The Lender Can’t Prove Standing.
The lender must prove that they have legal standing to file the foreclosure. If you prove that the lender doesn’t have standing, you can get the foreclosure thrown out.
Significant Mistake in the Servicing of the Loan
If the lender made a mistake that affected your loan servicing, it could be used as a defense. If the servicing is significantly flawed, it can be considered a defense against foreclosure.
Statute of Limitations Passed
Each state has a statute of limitations that applies to foreclosures. If the statute of limitations has passed, the lender can’t foreclose your home.
6. Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act (SCRA)
protects military service members against foreclosures, repossessions, and evictions.
It applies to the following service members:
- Active duty members of the Air Force, Marine Corps, Army, Navy, and Coast Guard
- Members of the Reserve, when serving active duty
- National Guard mobilized under federal orders for more than 30 consecutive days
- Active duty commissioned officers of the National Oceanic and Atmospheric Administration or the Public Health Service
If you took out a mortgage before you entered active duty, you can’t get foreclosed on without a court order. However, if you waive your rights, this protection won’t apply.
SCRA protection can get used while you’re on active duty and for a year after you leave active duty. SCRA also protects members of the service against default judgments.
Finally, it allows the court on its own or by request of the service member to stay or pause a foreclosure and make adjustments to the loan if the service member’s ability to pay is affected by their active duty service.
Consult With a Mortgage Foreclosure Defense Lawyer Today at 215-545-0008
You must talk with a mortgage foreclosure lawyer today if you are dealing with a foreclosure. They can help you discover if there’s a strategy that will help with your foreclosure defense.
Are you ready to find the best foreclosure defense lawyer? Sadek Bankruptcy Law Offices are prepared to help you save your home. Contact us today
for a free consultation.