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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