Times are very tough economically, and they may get worse- especially in the real estate markets, nationwide. There are literally millions of foreclosures- families losing their homes. The monetary and emotional toll is huge. Here are a few simple, key ideas that any person can think about and use to help them and their families to fight the forclosure process. This article assumes that the lawsuit- the legal forclosure action- has commenced.
1) Remember that a foreclosure, in most states, can and does take time- often a year or more- especially these days because there are tons of foreclosures occuring. But, don't rely on that- because it can also take as little as six months- from the commencement of the lawsuit to the actual foreclosure auction. So, first thing to know is that ACTION is required.
2) If you have a lot of equity in your home- let's say it's worth 500,000 and you owe 200,000, then a new mortgage may very well be possible- there are many "hard money" lenders out there- who might charge 14% and 4 points- but it is worth it to save your home. since your credit is bad- due to the foreclosure, a hard money lender will lend up to 50% of the value of your home. It's expensive, but it will save the remaining, significant equity.
3)Of course, most families don't have that much equity- they just need the home to stay in, to raise their family- in short- to live. It's much more than just a money thing. They may only have maybe 10-20% of an equity stake- but still, keeping the home is priceless to many people. To stop the foreclosure, you can file a bankruptcy- either a chapter 7 or a 13- either one will stop the legal process. But, it is the chapeter 13 that will allow you to KEEP your home in the long run- the chapter 7 will force you to sell your home - in most cases. The chapter 13 makes you pay off the mortgage lender slowly- usually over a three to five year plan- to pay the arrears, while also paying the current mortgage payments. Butm importantly, the forclosure process is halted- completely- even if it is the day of the auction!!!
4) You can hire an attorney to file an "order to show cause"- why the foreclosure should not be stopped- that is, you have some reason that the lender should not have foreclosed in the first place- maybe you did make payments, but they weren't credited properly- mistakes do happen. This mechanism uses the intervention of the state ccourts, whereas bankruptcy is a federal court proceeding. By the way, you can file a chapter 13 (or 7) without an attorney- but an attoney is quite desireable.
5) One of the emerging areas is that of mortgage fraud- maybe you have a "subprime" mortgage- and maybe you didn't understand the mortgage that was issued to you- it is an increasing area of ligitgation- something that you may want to check out- and use, as a mechanism to stop the foreclosure- by way of order to show cause- using the possibly faulty mortgae as an underlying cause to stop the foreclosure- it is something to look into.
