If you have defaulted on your mortgage, there are other options than going through foreclosure.
Defending a Foreclosure Complaint
The first thing that borrowers must be aware of is that once a foreclosure complaint is served on a borrower, the borrower must answer the complaint within 20 days or the lender will be able to obtain a default judgment. An answer is a pleading which responds to the lender’s allegations that the mortgage is in default. Although you may be in default, there are several defenses that an attorney can raise on your behalf to dismiss a foreclosure complaint.
Without filing an answer personally or by an attorney, the lender will receive a default judgment which accelerates the foreclosure process. After a judgment is entered, the home will be listed for sale at a sheriff’s sale typically within three months. By filing an answer, you can prevent a sheriff’s sale and demand a court hearing regarding the foreclosure action.
When we file an answer on behalf of borrowers, the defenses that we raise can include improper notification under the law, a fatal defect in the service of process, failure to include all assignments in the complaint, and incorrect property descriptions. Further, it’s critical to raise other defenses to this action at this time such as bad faith on the part of the bank, failure by the bank to mitigate their damages, defending against excessive damages being sought by the bank, or banks engaging in predatory lending schemes.
During the foreclosure defense process, we may be able to dismiss the foreclosure action or litigate it while trying to resolve your loan through a loan modification, short sale, or forbearance agreement. The key to using a foreclosure defense attorney is that it will help you stay in your home longer while your case is resolved with the bank through potential workout options.
In some situations, a bank will allow you to sell your home for much less than market value and for less than the amount that you owe on the loan. This is known as a short sale. The lender allows the borrower to sell their home for less than the amount of the mortgage and may forgive any remaining debt on the home.
In order for a bank to approve a short sale, you need the right people to speak with the bank and negotiate a short sale on your behalf. An attorney familiar with the short sale process is critical and that is what we are able to offer. Your chances of getting a short sale approved when you are represented by an attorney substantially increase.
A loan modification is another option that allows a borrower to receive a completely new loan. The borrower is essentially given a “fresh start.” Any amount that is in arrears will be wiped out and added to the remaining balance of the loan.
If your monthly loan payment exceeds 31% of your gross monthly income and you’ve experienced a qualified financial hardship, you may qualify if the terms of the loan can be altered to make your monthly mortgage payment affordable.
The lender will be able to reduce the interest rate on your loan, extend the length of the term of the loan, or reduce principal so you can qualify.
To see if you qualify for a loan modification, call or Zachary Zawarski at (610) 417-6345.