I'm just completing several mortgage foreclosure defense cases, and I'm pondering the lessons learned.. Mortgage foreclosure defense was never a huge part of my practice, though I am one of the few Indiana lawyers that take such cases, but during the surge of foreclosure filings following the great recession, I handled my share. As I think about it, every foreclosure defense case I've had has been unique, and I think it is because people who find themselves sued for foreclosure are in that position because life has put them in extreme circumstances. Usually the circumstances couldn't have been predicted by the homeowner. When you faced with foreclosure, and you are looking for a foreclosure lawyer, you should look for a lawyer who will take the time to listen to you, and you should take the time to tell the lawyer what your goals and expectations are. You should also listen to the lawyer though, especially if the lawyer believes your goals are not realistic, and may not even be in your best interest.
One lesson that my cases have taught me is that all houses aren't worth saving. If you sign a modification that commits you to paying well more than the house is worth, you should think long and hard about doing it. When you sign a mortgage modification that puts principal balance on the back end of the loan, even if your payment is workable, the added principal balance hurts your net worth. You may be wedded to that home for years because your modified loan is under water. You won't be able to sell the house without defaulting on the loan, and defaulting on the loan may kill your chance of buying another house.
It's normal not to be decided when you are sued for foreclosure whether the house can or should be saved. In that case, hire an attorney and start the modification relief request process. You don't need to make up your mind until there is an offer on the table. In the meantime, contesting the foreclosure and requesting mortgage relief can buy you time that you need to make up your mind and figure out what to do.
I have learned to be careful taking cases from clients who have been employed but have not been making payments on the house for a year or more. If you haven't made any housing payments for over a year, and you are employed, then in that year, absent very extenuating circumstances, you should have saved up a pretty good chunk of money. If you didn't save anything, the odds are not good that you will be able to make your modification payments if the loan is modified. The bottom line is that when you go to see an attorney about foreclosure defense, you need to be ready to explain what you've done with your money since you stopped making mortgage payments. If you can't answer that question, the attorney might not even be doing you a favor if he/she takes your case.
Another lesson I've learned is that different family members may have different ideas concerning whether it is best to take extraordinary measures to save the house versus moving on. You need to have a candid conversation. This is especially true when the assets and income of different family members are needed to modify a mortgage. You should think twice about putting a young adult son or daughter on hook for a modified loan of a home with no equity. Young adults often have to move to find new jobs. When your son or daughter can't move because he/she can't sell the house, it may be be a real career-killer. Similarly, getting cash from retired or soon to be retired parents may not be a good idea, especially when that cash goes to pay arrearage and cost of foreclosure. That money vanishes as soon as you pay it, because it isn't covered by any value in the property.
At least half of the people who have hired me for mortgage defense came to me after spending thousands of dollars on a "paper mill" mortgage relief firm first. Don't hire a mortgage relief firm that says "we have lawyers". You don't care if THEY have lawyers, you want one who represents YOU. No lawyer can represent you and the mortgage relief company too. The National Association of Consumer Advocates can refer you to a NACA member consumer lawyer who can represent YOU. Usually it will be cheaper than hiring one of the paper mill companies. For a referral, go to www.consumeradvocates.org. Every attorney seems to have a different way of getting paid in mortgage defense cases. When I take a foreclosure defense case, I typically charge an attorney fee paid in monthly installments based on what I think a likely modified payment will be. I work against the retainer on an hourly fee bases. When I do cases like this my fees are usually less both up front and total than the mortgage relief scammers, and usually the total fee is less than what a typical 7% real estate agents commission would be to sell the home. When I charge fees in this manner, if the client can't keep up the attorney fee payment, I know the client would have a hard time making the mortgage payment.
A lesson that I already knew is that there's no such thing as a "free house". You'll see all these postings on the internet about "produce the note". They'll tell you that mortgage companies that can't present an original promissory note or assignment can't foreclose on you, and that beating them is a slam dunk. I can't say that it is impossible to win on a present the note case but it is unlikely, and if you win, it will be only after a tough fight and lots and lots of attorney hours, time that you'd have to pay for. I've had lots of people call me because they wanted their mortgage company to produce the note. Not one of them have wanted to pay for the hours necessary to work up that kind of defense.
So i'm ready to answer the question of what makes a successful mortgage foreclosure case. The answer is that it depends upon the client's situation in life. If they client doesn't have the money to pay for the house and the house's upkeep, then you are best working out a deal for enough time in the property for the client to save some money and obtain alternate housing. If the client has enough cash flow to make a reasonable house payment and want's to stay in the house for a long time, then it's usually best to get a modification sufficient for the client to stay in the house at a payment he/she/they can afford. If the client is part of a family with different interests and objectives, it is best to get the entire family to talk about the situation honestly. The delay inherent in the mortgage foreclosure process amounts to a subsidy of many thousands of dollars. If the family can make the most of this, they can usually arrange a soft landing, often in housing that they like better than the original home.
No comments:
Post a Comment