Obstacles to Lenders Seeking a Foreclosure Action
There are many obstacles that can cause a lender to have problems with a foreclosure action. One of the key issues is whose name is on the promissory note and whose name is on the title. One recent situation revealed only the wife's name on the note and only the husband's name on the title. This revelation created real problems for the lender trying to seek legal action against the husband. It caused years of delays and then, the lender went after the wife separately taking over another year to finally get the court to take action.
There are many situations that allow someone to delay the foreclosure action and keep the property from the court's selling it at auction.
1.) The most important step during the foreclosure process is to be sure to answer all legal documents timely. By far, the best way to handle these documents is by hiring an experienced attorney. If you choose, you can write to the courts yourself with a response to their claims. A simple paragraph denying the statements they have made or similar could help slow down the process significantly. IT IS IMPERATIVE that you act on these notices and not ignore them or the action will be fast tracked and it may be very difficult to overturn the court's actions. Make sure that any documents you file in defense of your case are filed with the Clerk's office and officially stamped as received. As a practical note, while most of you reading this may not be attorneys, you will be held to the same standard before the court. So, it is imperative that you learn about how things are handled in your jurisdiction.
2.) If you or someone else on the loan is active in the Military - this is a major reason to delay your case and should be stated when responding to the foreclosure filing documents.
3.) Asking for a short sale may also work to postpone the sale date or even the foreclosure actions taken by the lender's attorneys but the best delay is having a short sale offer to present to the lender and getting an approval letter for the sale. Once that is accomplished the courts are more likely to postpone the court sale date beyond the short sale date. In some cases they don't even select a new date for the court sale.
4.) Filing for bankruptcy delays the court sale for a minimum of 6 months and usually can be pushed off even more if requested.
5.) An experienced attorney can usually continue to file motions for production of documents (including the original mortgage documents) that can significantly slow down the lender's attorney's actions.
6.) Requesting meetings with opposing counsel and or mediation can also slow down the action.
7.) Requesting a loan modification can slow down the foreclosure action. Lenders prefer to not foreclose on a property and would rather do a short sale or modification. However the trend is that they seem to promise all kinds of modification programs and in reality very few are successful. Some lenders launch people into these programs and then pull them back after a 6 month trial period even if the payments are made on time. It is a very frustrating scenario that can leave homeowners confused and angry. It has been my experience that over 90% of these programs have been unsuccessful. I have only seen a handful of lenders offer a principal reduction. Most modifications only offer lower payments for a short period of time and then add the balance to the end of the term of the mortgage.