Foreclosure Defense: What You Need To Know
The economy has gone haywire since the coronavirus pandemic. Businesses have shut down, prices are skyrocketing. The housing market has gone out of control, with homes selling for tens or even hundreds of thousands of dollars above asking price.
When the market crashes, many homeowners will undoubtedly be in dire financial straits. They may be unable to pay their mortgage. When they fall behind on payments, they can face challenging situations. The bank or lender may take various actions, such as foreclosure.
Just because the economy is in bad shape doesn’t mean that the rules have become lenient. In fact, more than 200,000 foreclosures were filed in 2020, when COVID-19 first started.
Homeowners do have options, though. They can take the steps to stall foreclosure proceedings or stop them altogether. The trick is to prove that the bank does not have the right to foreclose on the property. This often means hiring a real estate lawyer who knows the ins and outs of the mortgage industry and can prove that the bank or lender engaged in unethical or illegal behavior. The good news is that many large banks throughout the country have acknowledged that they have engaged in unorthodox and even illegal practices in mortgage and foreclosures.
Mortgage Loan Modifications
One common way to avoid foreclosure is to modify the mortgage. This option is not too complicated, making it an ideal option for homeowners who have fallen on tough times and want to save their home.
In a mortgage loan modification, the lender and homeowner work together to renegotiate the terms of the mortgage to make it more affordable. This may involve a change in the interest rate, elimination of late fees and penalties, a reduction in principal, or forbearance, which allows the homeowner to stop making payments for a temporary period.
If the homeowner is upside down on the loan—meaning that they owe more than what the property is worth—then they have a better chance of getting a loan modification. That’s because the bank would lose money by selling the home, so a loan modification would be the better option. But if the homeowner has a lot of equity in the home, then there would be more incentive for the bank to sell the home and possibly make a profit.
Foreclosure Defense Varies By State
Keep in mind that there are various defenses that a homeowner may be able to use, but they vary by state. For example, Florida gives homeowners the right to get current on their loan and stop a foreclosure.
It is important to know what is and what is not allowed in your state, so discuss your situation with a real estate lawyer. If the bank or lender does not follow state laws when bringing about a foreclosure on your home, you may have grounds to challenge it.
Seek Legal Help
Knowing that your home is in the process of a foreclosure is a scary situation. You may be concerned about your future. Where will you live?
Don’t handle a foreclosure on your own. Seek legal help from Fort Lauderdale foreclosure defense lawyer Edward J. Jennings, P.A. We can assess your situation and help you understand your options. Schedule a consultation with our office by filling out the online form or calling 954-764-4330.