Mortgage Modification: Time is Not on Your Side

If you can no longer make your mortgage payments but you don’t want to give up your house, a loan modification may be a viable solution. Under the government’s Home Affordable Modification Program or HAMP, you can request your lender to restructure your loan so you’ll end up paying smaller monthly installments.

Before Foreclosure

Though foreclosure is something no one wants to face, it helps to understand the foreclosure process in Florida—especially since much can be done before foreclosure to better your outcome.

Missing One Payment

The road to foreclosure starts when you miss one payment. If you want to avoid foreclosure altogether, it is important to update payments as soon as possible. You will incur a late fee due to your missed payment, so be sure to take this into account.

America’s Seniors More at Risk of Foreclosure

Although the past U.S. housing crisis left plenty of people struggling to keep their homes, none were as affected as the American senior population. A 2011 survey identified homeowners over 75 as having the highest foreclosure rate for people over 50. According to a report from the Consumer Financial Protection Bureau, the percentage of seniors with mortgage debt increased from 22 percent in 2001 to 30 percent a decade later. In that same time period, the rate more than doubled among those aged 75 and older, from 8.4 percent to a staggering 21.2 percent.

Loan Modification: Best Done Sooner than Later

When it comes to saving a home from foreclosure, one of the best solutions you can use is to apply for a loan modification. Think of it as a backup plan that you can fall back on. It’s possible that you won’t get the verdict you want, which is to retain your home, out of your foreclosure case. Your foreclosure lawyers will likely advise you to start talking to your lender about loan modification while they defend your foreclosure case.

Mortgage Modification Pitfalls

If you’re having problems paying your mortgage bills, a load modification might sound like a really great idea. However, homeowners should be aware that mortgage modification is tricky business dotted with many potential pitfalls.

First, while laws have been changed to force lenders to respond to homeowners within 10 days after they put in a modification request and to provide them with an answer within 30 days, your lender may rule your application incomplete and stretch out the process. Thankfully, a law preventing dual-tracking—the act of processing a foreclosure while a loan modification request is pending—has been put in place to protect homeowners.

A Brief Outline of the Florida Foreclosure Process

Foreclosure is an all too familiar reality in the Sunshine State, with some 1.36 million properties facing repossession in 2013 alone. If you’re one of the many homeowners who may be facing foreclosure, you’re first reaction may be to panic. However, the best way to face this challenge is to arm yourself with knowledge. Below is a brief timeline of the foreclosure process in Florida:

Molon Labe: When Someone Comes to Take Your House

Molon labe—they may seem like two unassuming words, but they carry huge impact. These words are reportedly what the Spartan General-King Leonidas said in reply to Xerxes, the Persian Emperor, when the latter demanded Leonidas and his 300-strong army to lay down their arms and surrender. In English, molon labe means ‘come and get it’, a classical expression of defiance.

Molon labe has been used many times since, becoming the signature battle cry for people who wage war against oppression and refuse to be trampled by men who would deprive them of their God-given right to live free. For homeowners facing foreclosure, molon labe is not only a battle cry—it’s a state of mind.

Protecting Soldiers from Foreclosures

According to statistics, roughly five percent of military personnel on active duty reside in Florida. That's roughly 60,000 soldiers and officers stationed in different parts of the country, if not the world, away from their loved ones. Even if they're still in Florida, daily military life can get in the way of civvie life, which includes paying loans.

Finalize Your Modification before Bankruptcy

Foresight is an important skill that every borrower should learn. No matter what kind of loan you enter into, the chance of defaulting is always real, and the ability to foresee whether the possibility that that might happen is high can help you plan ahead and take concrete steps to mitigate your loses.

Facing Foreclosure, Can You Save Your Home?

Your home is in foreclosure, do you have the money to save it? This is a question that every homeowner facing foreclosure must answer HONESTLY. If you don’t, it may be too late to try any option to save your home, and do whatever is necessary.

Common Questions about Foreclosures in Florida

Receiving the foreclosure notice for your home will stir up a lot of emotions: fear, anxiety, and confusion. Along with these feelings, you’ll also have a lot of questions about Florida’s foreclosure laws and processes.

Of course, knowing the answers to these queries can help you make better decisions on how to proceed. If you find yourself in the middle of a foreclosure case, here are the three things you should definitely know:

Tips when Hiring a Foreclosure Attorney

The foreclosure process often feels like an uphill battle. However, you don’t have to face this ordeal alone, thanks to experienced foreclosure attorneys who can delay the case or have it dismissed completely.

Of course, the lawyer you hire becomes your partner in fighting repossession, so be sure to choose the best candidate for this task. Below are three important tips to keep in mind before you hire one:

Knowledge of State Laws

Each state handles foreclosures differently, with some having non-judicial or judicial processes. Florida belongs to the latter category, and its foreclosure laws have nuances not present even in other judicial states (e.g. expedited hearings, final and non-revocable judgments). As such, hire a local attorney who is well versed in the state’s laws.

The Hidden Peril of Mortgage Modification

When you’re strapped for cash to pay off monthly mortgage payments, a loan modification usually sounds like a great idea. However, especially if you are currently at risk of foreclosure, applying for a mortgage modification might expose you to a hidden peril that could put your ability to keep the home in jeopardy.

Called dual tracking, the problem occurs when your lender is in the process of pursuing a foreclosure case against you while your mortgage modification is pending. This caused a lot of problems following the mortgage crisis when homeowners facing foreclosure were offered loan modifications—only to have their homes taken away from them when the foreclosure process finished first.

Fortunately for homeowners, the Consumer Financial Protection Bureau issued new mortgage servicing rules that came into effect on January 10, 2014, effectively banning dual tracking.

The issue, however, that makes dual tracking an ongoing problem is that bankers, lenders, and mortgage servicers currently advise borrowers not to contact an attorney before applying for a mortgage modification. While the banks’ explanation that this allows borrowers to save money is justified, this can put borrowers at risk of losing their homes if their mortgage servicer violates the law by dual tracking.

Florida’s Foreclosure Process

Foreclosure is a process best avoided at all costs. However, knowledge of Florida’s foreclosure process can help you understand what you need to do if you find yourself sucked into it in the future. The process takes place as follows:

1. You fall behind on several mortgage payments. The mortgage servicer starts calling to remind you of your delinquency and tries to collect payments. The servicer may try to work out a deal to help you stay current on your loan, such as a loan modification, forbearance, or payment plan.
2. You are sent a breach letter informing you that your loan is in default. The letter will demand you to cure the default and will recommend an action to do so.
3. You become delinquent on your loan for 120 days and the mortgage servicer gains the authority to file a case against you in state court to start the foreclosure. You are served a summons, which gives you 20 days to file an answer. If you don’t file an answer, the lender gets a default judgment from the court, otherwise…
4. You provide a reasonable defense and the case goes to trial.

The Negative Impact of Foreclosures

Economic forecasts typically include foreclosure rates and their impact on the housing market. After all, foreclosures affect not only the homeowner but also the entire neighborhood and, consequently, the local government and the economy as a whole.

Foreclosures hurt housing values

Several studies reveal that foreclosures have an adverse effect on local property values, especially during a recession. With every abandoned home, the risks of vandalism, crime, and blight increase. The Center for Responsible Lending estimates that each foreclosure reduces home values in a neighborhood by about $70,000.

Foreclosures hurt local governments

Likewise, foreclosures exert negative impact on local governments due to a decline in tax revenues. Property tax comprises at least two-thirds of the revenues collected by most local governments, which is directly impacted by increase in foreclosures and declines in home prices. Additionally, sales taxes—another major source of revenue for local governments—suffer as a result of the reduction in consumer spending brought about by foreclosures.

Foreclosures hurt the larger economy

Declining home values affect both investment in new construction and consumer spending. The bad news is that these two factors are major drivers of unemployment. In turn, this increase in unemployment leads to a vicious cycle that precipitates subsequent foreclosures as well as further declines in investment and spending.

Representing Yourself in Foreclosure Hearings?

There are many reasons why people face foreclosure: loss of employment, a grave illness, the death of a spouse. Yet they all boil down to the same cause: the inability to make timely mortgage payments.

Even in such a tight financial situation, many homeowners forgo hiring a foreclosure attorney to represent them in hearings. After all, hiring a lawyer entails additional costs that may otherwise be used to service the loan. If you’re thinking about representing yourself in court, however, know that there are crucial drawbacks to doing so:

You’re Overmatched

In all foreclosure cases, the homeowner is up against the lender, an entity that has the resources to hire a highly skilled legal team. While a David-versus-Goliath outcome isn’t entirely impossible, it is very nearly so. To stand any chance of winning, you truly need professional legal representation.

You’ll Miss Loopholes

Foreclosure attorneys scrutinize your mortgage documents for any irregularities—loopholes that might discredit your lender and cause the judge to throw out the case. This may include improper compliance with the foreclosure filing procedure or any other documentary discrepancies. Of course, only experienced lawyers can spot these anomalies and use them to mount your defense.

You Might Miss Deadlines

What happens if you don’t respond to the foreclosure notice? You lose the case automatically. That’s because the foreclosure process has very strict timelines that are easy to miss. Lawyers are aware of all these and ensure that you’ll never miss a response or hearing date.

When Mortgage Modification Just Won’t Cut It

Lenders that accept mortgage modifications often tout it as fantastic way to find relief from debt. However, diving straight into mortgage modification isn’t always the best option, as the scenario below illustrates:

Suppose a debtor has two mortgages, totaling $300,000, on a house worth $187,500. On the first, he owes the lender $200,000, and on the second, $100,000.

If the debtor agrees to a mortgage modification outright, and the lender writes down the balance on the first loan to $166,000, this puts the first loan on solid ground, but the debtor himself remains $121,500 underwater. Additionally, the second loan can no longer be stripped in a bankruptcy case because the value of the house, if it was sold, would cover a portion of the second loan.

On the other hand, if the debtor files for bankruptcy, instead, this wipes out the second $100,000 loan. The debtor still remains underwater, but only to the tune of $34,000. While both scenarios will put the debtor at risk of drowning financially, the second is still far more favorable.

A third option might see the debtor filing for Chapter 13 bankruptcy. This wipes out the second loan and puts the first on a repayment plan. The debtor can then work with the lender to modify the loan, which then pulls him completely clear of any risk of drowning.

Before entering a tricky maze of mortgage modifications, consulting a bankruptcy lawyer first is always best. Otherwise, you put getting the best deal at risk.

New Law’s Effect on the Foreclosure Process

Florida has the highest rate of foreclosure among all 50 states. Given how many cases are being heard at any given time, it’s not surprising that the state also has the highest backlog of foreclosure cases. To remedy this, Governor Rick Scott signed a law in June 7, 2013 that seeks to expedite the foreclosure process.

While the law does have homeowner-friendly stipulations—lenders now face stricter documentary requirements before they can file a case—it also contains provisos that hurt people who face foreclosure. Below are the two main changes that should concern homeowners:

Show Cause Hearing

When a lender files a complaint, they may also file a request for a “show cause hearing,” wherein the homeowner must convince the courts why the foreclosure should be halted. If the request is approved, the show cause hearing can happen in as little as 20 days, limiting the amount of time a borrower can mount a defense, request forbearance, or get a loan modification.

Finality

Moving forward, all judgments on foreclosure hearings are final. Even if your home was foreclosed on fraudulent grounds, you will no longer be able to take back your property. The only recourse you have is monetary damages.

Given these new rulings, homeowners facing foreclosure must contact foreclosure attorneys immediately to increase their chances of delaying or rescinding property repossession.

Foreclosure Hearings: What to Expect

In a foreclosure case, the lender’s main goal is to satisfy the mortgage owner’s outstanding balance. If the balance isn’t paid, the lender will start legal processes to claim the property from the owner and enact measures to recoup its expenses. Before the home can be sold though, the lender will have to schedule hearings to demand the borrower to pay the total balance of the unpaid loan. If you received a foreclosure notice, here’s what to expect from your hearings:

Preliminary hearing

At this hearing, you will be given the chance to present your case to the judge. If you present an acceptable reason for not being able to make payments on your mortgage, the judge may require the lender to give you enough time to work your issues out. If not, the judge will rule in favor of the lender and the foreclosure case will move toward summary judgment.

Summary judgment hearing

In general, a summary judgment hearing is held 20 days after the lender moves for summary judgment. At this hearing, it is the lender’s turn to present a case against you. You may give testimony and provide evidence if you are present, but if you aren’t able to dispute the lender’s claims, the judge will likely rule against you and grand the lender the right to foreclose and sell your property.

To increase your chance at success at these hearings, it is imperative that you work with an experienced foreclosure attorney.

Introduction to the Foreclosure Process

When a homeowner consistently fails to make payments on his mortgage, the lender that holds the mortgage note may pursue foreclosure on the property. The lender initiates the foreclosure process by filing records with the court. Foreclosure transfers the legal ownership of a property to the lender so it can take measures to recoup its investment.

How will you know when you’re actually ‘in foreclosure’?

In legal terms, foreclosure means that a foreclosure lawsuit has been filed against you by your lender. Although your lender may send you a lot of paperwork when you fail to make payments, you aren’t ‘in foreclosure’ yet unless a process server knocks on your door and serves you or an adult member of your household a summons and complaint telling you that foreclosure proceedings have been filed against you in the appropriate court.

How many days do you have to respond to the foreclosure lawsuit?

In Florida, those who have been served a foreclosure summons and complaint have 20 days to respond. In this case, responding means preparing a written legal defense and filing it with the Clerk of the Court in the county where the suit has been filed. If you fail to file a response within 20 days, the bank can obtain a default against you.

For more information on these topics, get in touch with a foreclosure attorney.

Vital Things to Know About Mortgage Modification

A house is a great investment, but the economic downturn of the last decade saw many homeowners drowning in mortgage debt. That’s why in 2009, the government created the Home Affordable Modification Program (HAMP), which aims to make home payments more affordable for people who are struggling financially. 

How does this program work? Who can qualify for it? Below are the vital details you need to know:

Understanding the Foreclosure Process

If you have worries about meeting your mortgage payments or have been served foreclosure papers, knowing how the foreclosure process works should be top priority. The foreclosure process is usually initiated by mortgage companies within 3 to 6 months after you first miss a mortgage payment. The whole process may move more quickly if you are already in default, so make sure that you obtain appropriate legal advice. 

Once a foreclosure lawsuit has been filed, you have 20 days to respond to the Summons and Complaint. The lender may move for a default if you don’t provide a response within the allocated period. A hearing will be held for summary final judgment based on the lender’s motion.

Handling and Challenging Judicial Foreclosures

The housing bubble that burst not too long ago reminded everyone that foreclosures are for real, and they can happen in the blink of an eye. During the economic slump, many families and households were left homeless due to their inability to pay their suddenly oh-so-steep mortgage payments. A foreclosure is not something that anyone ever wants to have to go through, but if the threat of it happening already looms over you, it’s best to equip yourself with the knowledge on how to go about things the right way.  

Fighting Foreclosure: Why You Need Lawyers

The ease of owning a home is tied directly to the state of the economy, which in stable times is a good thing. However, should the market crash, mortgage payments can shoot up to astronomical levels. It’s not unusual to hear of numerous homeowners losing their properties to foreclosure due to an unfortunate and untimely economic hiccup.