Charles Jerome Ware, Attorneys & Counsellors, LLC, is a premier boutique Maryland-based nationally respected and highly-regarded law firm. For an initial courtesy consultation, call us at (410) 730-5016 or (410) 720-6129, or email us at charlesjeromeware@msn.com.
The following summary of 15 Tips for Avoiding Foreclosure in Howard County, Maryland are excerpted from Chapter 4 of the best-selling book by Attorney Charles Ware, titled: "Legal Consumer Tips and Secrets: Avoiding Debtors' Prison in the United States," ISBN: 978-1-4620-5182.
Fifteen (15) Tips for Avoiding Foreclosure
Foreclosures and deficiency judgments could
severely affect the consumer’s creditworthiness, and therefore, serious efforts
should be made to avoid foreclosure (see Chapter Three: “Credit Bureaus, Credit Scores and the Credit
Business,” supra). Fifteen (15) tips to avoid foreclosure
follow:
1. Be engaged. Losing your home or other real estate can be
distressing, and even depressing. Do not
ignore this problem. Be engaged. The further behind the consumer gets in his
or her mortgage payments, the more difficult it becomes to reinstate the loan,
and the more likely the consumer will lose the property.
2. Contact the lender promptly upon realizing
that you have a payment problem.
Believe it or not, legitimate lenders do not want your house. What they want is the money they expected to
earn from granting the mortgage to the consumer. Many lenders have options for the consumer to
help them through difficult times.
These options can include, for example:
(a) “The President’s Making Home Affordable Plan;”
(b) Refinancing of the mortgage loan;
(c) Forbearance;
(d) Repayment plans; and
(e) Loan modifications.
3. Do not hide your head in the sand. Open and respond to all mail; e-mails, and
other correspondence from the lender.
Failure to be informed by your lender, and to respond to correspondence,
will not be an excuse in foreclosure proceedings. Usually, the first notices the consumer
receives will provide useful information about foreclosure prevention options
and efforts that may assist the consumer.
Subsequent correspondence may include important and informative notices
of pending legal action.
4. If you cannot afford your home, and
particularly if you are behind in mortgage payments, try to sell it. Or, rent your home. Enough said?
5. Alternative, and/or in conjunction with 4 supra, always try to renegotiate the
mortgage payment. Do not give up on this
effort until the final chapter:
foreclosure and sale. Why
not? All you have to lose is your home.
6. Be knowledgeable. Know your mortgage rights. Keep track of your mortgage loan documents
and study them carefully. Be aware of
your rights under the agreement, and what your lender (mortgagor) can lawfully
do if you cannot make your payments.
Learn about the foreclosure laws,
procedures, and timeframes in your state and locale. Every state has its own foreclosure laws,
procedures, and timeframes. Seek advice
and assistance from competent sources.
7. Make sure you understand the available
foreclosure prevention options.
Another name for foreclosure prevention options is “loss
mitigation.” A good internet site
for this information, among other sources is:
www.fha.gov/foreclosure/index.cfm.
8. Contact a knowledgeable attorney for
advice and consultation. Always a
good practice. A simple telephone call
to a knowledgeable attorney could, in many instances, save the consumer’s home.
9. Telephone or otherwise contact a
HUD-approved housing counselor for consultation and advice. The U.S. Department of Housing and Urban
Development (HUD) funds free or very low cost housing counseling
nationwide. Housing counselors can help
the consumer understand the law and his or her options, organize their finances
and represent them in negotiations with their lender if they need this
assistance. Find a HUD-approved housing
counselor near you or call (800) 569-4287 or TTY (800) 877-8339.
10. Engage in debt and spending management. You are in a financial crisis. Act like it.
Prioritize your spending. After
healthcare, at least for most of us, saving our home should be our first
priority. The consumer should review his
or her finances and determine where they can cut spending in order to make
their mortgage payment. If necessary,
delay payments on credit cards and other “unsecured” debt until you have paid
your mortgage.
Or, of course, try to lawfully increase
your income with full or part-time employment opportunities.
11. Demonstrate to the lender that you are
serious about keeping your home. Use
your assets. Do you have assets—a
second car, jewelry, a whole life insurance policy—that you can sell for cash
to help pay your loan? Can anyone in
your household get an extra job to bring in additional income? Even if these efforts don’t significantly
increase your available cash or your income, they demonstrate to your lender
that you are willing to make sacrifices to keep your home.
12. Remember the words, “produce the note!” If the lender is to proceed successfully to
foreclosure and sale, it must produce the note on the property.
13. Be very careful, and indeed wary, of
so-called foreclosure prevention companies.
Instead, follow the advice given in these fifteen (15) tips. Consult competent legal counsel and/or other
qualified professional assistance that does not require hefty fees and costs.
You don’t need to pay fees for foreclosure
prevention help—use that money to pay the mortgage instead. Many for-profit companies will contact you
promising to negotiate with your lender.
While these may be legitimate businesses, they will charge you a hefty
fee (often two or three month’s mortgage payment) for information and services
your lender or a HUD-approved housing counselor will provide free if you contact
them.
14. Avoid foreclosure recovery scams and schemes. Seek counsel from a competent professional,
such as a lawyer or HUD-approved housing counselor, before hiring a so-called
“foreclosure” expert or firm.
15. Attempt Redemption. See, “Redemption After Foreclosure,” (xvii), supra. The consumer should remember that foreclosure
is a costly and time-consuming process for lenders, thus providing incentives
for the lender to avoid foreclosure.
With effort from the consumer, in
most instances foreclosure can be avoided.
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