What Really Is Foreclosure Defense?

It has been four or more months since you last made a full mortgage payment. The phone rings multiple times daily and the caller ID tells you it is the mortgage company calling yet again demanding payment and threatening "legal action." You tell them about your unemployment, under employment, the serious illness or injury that kept you from working or about the huge medical bills you have been trying to manage to keep your family healthy and safe. They really do not seem to care, they just want their money. You know you are in default but you wonder why on earth would they want yet another foreclosed home? You worry about losing your family's future and where you will go, how soon will the eviction occur, and what affect this will have on your children's mental health.

Then it finally happens. The knock on the door and the presence of an off duty Sheriff's officer handing you (or worse handing one of your kids) a summons and complaint to foreclose the mortgage. Panic sets in and you wonder what do I do now? If I only had a few more months I could get this worked out. Why is the mortgage company not willing to work something, anything, else out? Is it not better for them to let me keep the house and make a short payment than to kick us out and have an empty home with no money coming in whatsoever?

Should you hire an attorney to defend the foreclosure?

You go on the internet or look in the yellow pages and sure enough, there is your salvation: Foreclosure Defense.

"We negotiate with your mortgage company to modify your home loans. We also defend you and your family against foreclosure. Our job is to fight against the mortgage companies for you and your home."

(paraphrase of multiple advertisements)

Oftentimes, people hear the words foreclosure defense and believe that there are multiple ways to stop a foreclosure proceeding once you have defaulted on a mortgage. The truth is, if you are actually in default on your mortgage loan, the legal category "foreclosure defense" is a myth. The only true defense to a foreclosure is that you are in fact current on your mortgage obligation and the lender is factually mistaken in its accounting of your payments or that you are not even the person responsible for the mortgage obligation and they are foreclosing against the wrong person, or that you refinanced years ago and the loan they are suing on is in fact paid in full and therefore cannot be in default.

But, you can be proactive and protect your home by engaging in foreclosure offense and executing options that will prevent a foreclosure from occurring. The first thing to do you can do by yourself without any assistance from an attorney:

DO NOT PANIC!

Here is why:

1. DEFAULT. The foreclosure process begins with your default on payments and the lender's decision to take legal action to protect its interest in the property.

2. QUINN LETTER. Once the lender decides to proceed legally against you, the lender must send you a notice through U.S. mail advising that, if you wish, you may seek approved housing counseling. The counseling agency must be approved by the Department of Housing and Urban Development (HUD). The lender may not take any legal action against you during this time. If, within the thirty (30) day period, an approved housing counseling agency provides written notice to the lender that you are seeking approved counseling services, the lender may NOT take any legal action against you for another thirty (30) days.

3. WORKOUT. During the subsequent thirty (30) day period, you and your counselor may prepare a sustainable loan workout plan (a plan that would allow you to make payments on your mortgage). If you and your lender agree to this new plan of payment, the lender may NOT take any legal action against you as long as you, the homeowner, comply with the plan.

4. NO WORKOUT / SUMMONS & COMPLAINT. The lender will file a lawsuit against you (and your property) to foreclose the mortgage. You will be served with a copy of a Summons (a court Order to answer the Complaint within 30 days) and the Complaint.

• "Answering" the Complaint requires you to submit to the court, in writing, an answer, admitting or denying each of the allegations set forth in the Complaint. If you do not formally "answer" then each of the allegations will be deemed to have been "admitted." Be aware that "Answering" the Complaint requires an "entry of appearance" and the payment of a fee for the privilege of doing so and then commits you to appearing at every hearing from there on out.
• The service of the Summons & Complaint initiates the beginning of the "reinstatement period." The reinstatement period runs approximately 90 days and is the time during which you are permitted to pay the lender all of the past due payments and become current. Doing so stops the foreclosure.

5. JUDGMENT OF FORECLOSURE. Unless you have formally filed an answer to the Complaint that sets out genuine issues of disputed facts (you are current on your payments, your loan was paid in full, or you are not the person on the loan) the court will execute a Judgment of Foreclosure.

• The Judgment of Foreclosure ends the "reinstatement" period and begins the "redemption" period; the length of time the law allows you to pay the loan in full and stop the foreclosure; approximately 7 months from the date you were served with the Summons & Complaint.

6. SHERIFF'S SALE. Once the "redemption" period has expired, the lender will file a motion with the court, asking its permission to schedule the home for auction or "sale." This can occur in as little as 45 days but usually takes at least another 90 days, depending on how many other foreclosure sales the Sheriff is managing at the time.

7. CONFIRMATION OF SALE. The lender then must file another motion asking the court to confirm or approve the sale and request an order for possession of the property. Once confirmed, the lender (or successful bidder at the Sheriff's sale) may take physical possession of the property in 30 days.

8. EVICTION. At the end of the thirty (30) days, the homeowner is evicted by the Sheriff and a new deed for the new owner is recorded for the property.

9. SPECIAL REDEMPTION. If the mortgage company is the successful bidder at the Sheriff's sale, you can retain possession and gain title in the property if, within 30 days, you pay the mortgage company the amount it paid at auction, plus any costs it accrued during the foreclosure process.

Other than by workout, reinstatement, redemption or special redemption, the only way to actually "stop" a foreclosure and retain possession of your home is through a Chapter 13 Bankruptcy "save-the-Home" plan.

Derrick B. Hager, P.C., Attorney at Law, is considered a debt relief agency that is here to help people save their homes from foreclosure. Our Aurora foreclosure attorney is here to help you put the power of what happens to your house back in your hands. We are here to help you take control of the situation and work toward saving your home. Contact us today to learn more about how we can help you during a free consultation.

We can help assess your financial situation and goals to structure the best legal plan that helps you the most. Whether this includes aggressively pursuing a home loan modification or pursuing a Chapter 13 bankruptcy filing to structure a repayment plan, we will be by your side to help you every step of the way. You may also be able to discharge some of the deficiency using a Chapter 7 filing.

In some situations, the best thing to do may be to let go of the property and walk away if you are too upside down or underwater on your mortgage. We can help you evaluate if this is the right decision and help you plan for the future and the best way to afford a home once you build a more solid financial foundation. For instance, this may include getting approved for a loan in the future that is based on the lower of two incomes, if you are married, so if one spouse should lose his or her job, you can still afford your house payments.

We understand how connected people feel to their home, but it is important to remember that a home is where your family is and any house can be made into a home. We want families to stay together and live a life free of stress from debt. We will do everything we can to help you keep your home or find a way to afford a new home in the future.

Derrick B. Hager, P.C., Attorney at Law, is considered a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code. This website is an advertisement for legal services. The information presented should not be construed to be legal advice and does not constitute the formation of an attorney-client relationship. Contact us today for bankruptcy assistance and to learn more about our services during a free consultation.