The recent economic downturn has resulted in record numbers of foreclosures in America. Most mortgages are held by large lending institutions and often their bureaucracies use one-size-fits-all legal strategies, and may often have internal paperwork issues that a homeowner may have legitimate defenses to allow them to stay in their homes and result in negotiations with the lender. Here are some strategies to help homeowners keep their homes.
Don’t Panic
A foreclosure can be a very emotionally-charged experience. The first few hours after a homeowner finds out he or she may be losing their house are critical in one aspect – it is important to NOT make a hurried decision until the emotions have settled down.
Get Organized
Collect all the paperwork for your mortgage and all communications with the lender, make copies, and keep everything organized and in the same place. If anything is missing, demand copies from the lender or see what is recorded at the courthouse. Request a detailed statement from the lender and obtain all copies of checks or payments to the lender.
Communicate with the Lender
Too often, notices and bills and legal warnings go unheeded by debtors. Sometimes a lender may be willing to negotiate terms. When it comes to a home, it is important to attempt to communicate with the lender. Record all communication when practical, make copies of all paperwork, and send all mail with a delivery certification that requires a signature by the recipient. Refuse any negotiations from the lender not in writing – if the lender will not sign a piece of paper regarding any deal, there is no deal and no protection in court for the homeowner.
Get legal help
Plenty of attorneys will probably have already contacted you offering their services. Find an attorney through a referral from a friend or coworker, if possible, rather than an attorney who has been sending you letters in the mail or calling. Legal protections abound for homeowners under foreclosure, and expert legal help is critical.
Know your rights
Foreclosure laws are different in every state. Online resources abound as to foreclosure regulations and consumer rights. Do not expect an attorney to do all the homework and have all the answers – be proactive in protecting your rights under the law. Many of the larger lenders may not have followed the proper procedures in recording or handling your mortgage, and some of their errors may buy you some time. Know and appear at all court dates, and always be ready to present your case. Always appear in court with a professional appearance and on time.
Figure out what is essential
The lender may have a genuine case for foreclosure, and you may have to move. Do not let time slip up on you where eviction is a surprise. Make sure that all of your possessions are stored, sold, or moved before the eviction comes.
Keep in mind that a mortgage is a contract, and unless fraud was involved, it is a binding contract with a promise of payment that the homeowner needs to keep. Lenders also need to realize their long-term interest may be best served by willingness to negotiate terms rather than legal measures of foreclosure, which often reduce home prices below their real values. All parties in a mortgage need to be aware of their responsibilities and consequences, and openly communicate with each other when circumstances take a negative turn.