Viral Socialite

This is the second article in a series examining various general issues of relating to foreclosures and the legal environment. Homeowners often avoid going to the initial foreclosure default hearing, which makes it very easy on the bank to win a case and proceed from foreclosure to eviction. Being aware of some of these legal issues, though, can encourage foreclosure victims to make it to the hearing and present their side of the story, which may result in a better resolution to the problem than a sheriff sale. Although these issues may not be come up at all, or the homeowners will find some solution outside of the courts, being aware of these aspects of the foreclosure process can allow them to put together more backup plans if the bank does pursue the default through the county court system.

The previous article discussed what elements of a case that the lender would need to prove in order to win a judgment against the homeowners. These included proving there was a legally binding contract, the lender performed as agreed under the terms of the contract, the homeowners breached some part of the agreement, and the breach caused the mortgage company to suffer actual damages. The lender must prove all of these elements in order to win; if they can not prove one of them, there is no case. For example, if the bank shows everything else but can not prove that they own the paperwork for the loan, due to it being passed around from lender to lender, sold to hedge funds, investment firms, and then sold to the foreclosing bank, but the loan papers are not clear, there may be no judgment awarded.

Of course, if the homeowners do not show up to the foreclosure hearing, the bank will often be awarded a default judgment, with the judge simply assuming that the bank’s case is sound. If the homeowners are made aware of their right to defend against the lawsuit, and simply waive that right by not answering the complaint or showing up to court, the judge will assume that silence equals consent and the lender will win.

But, for homeowners making their own defense or hiring an attorney of their own to defend them, it is important to be aware of certain techniques that can be used to answer the foreclosure. The first step should be for the homeowners to identify in the lender’s complaint the specific legal claims being made. Obviously, the most common one in a foreclosure lawsuit will be breach of contract, specifically in regards to the mortgage loan. But without reading the complaint, homeowners can not be sure if any other claims are made, or if the bank has failed to make any claim at all. Identifying the claim will help the foreclosure victims begin to understand exactly what they are defending against.

Then, the homeowners may want to figure out the exact elements of each claim made against them. My first article on this subject explains the specific elements that would generally need to be proved in a breach of contract case, although every case will be somewhat unique. But, as stated earlier, the bank will need to show that a legally binding contract existed between it and the homeowners, that the lender did everything as agreed, the homeowners failed to perform as agreed and breached the contract, and the lender suffered actual damages as a result. Although this may seem quite simple in theory, mortgage companies (and all creditors) are notoriously bad at record keeping and attorneys are not always known for competence when their shaky legal claims are challenged. Homeowners who can identify exactly what needs to be proven can often easily poke holes in the case and create a sense of doubt over one or more element, depending on how thorough the bank has been.

The next step may be for the foreclosure victims to identify each fact that the bank may use to prove their case. Some of these items may be the original mortgage paperwork, any assignments of mortgage showing who owns the loan at the present time, mortgage payment records showing the missed payments, and so on. Because the lender is qualified as a debt collector under the Fair Debt Collection Practices Act, it is quite reasonable for homeowners to request specific validation of the debt. If the bank has not kept very clear transfer records, or there is doubt of who exactly owns the loan, there may be no case against the homeowners. For example, suppose the bank can not clearly show the loan was transferred to it. The homeowners may be in danger of being sued by a different lender who actually does own the paperwork, or possibly they have been making on time payments to a different lender who has the right to collect. The bank that can not show it owns the loan can not prove it has the legal right to try and collect payment for the loan.

This is one reason why homeowners may want to put together documents that they have received that can disprove the lender’s claims, as well as evidence that proves the claims the homeowners will make. As long as any one element of the mortgage company’s lawsuit is defeated, there can be no judgment against the homeowners for foreclosure. If the bank’s transfer documents are far different from the foreclosure victims’ own information, there may be doubt that a legally binding contract exists between the bank and owners. Although this may just require more documents to be produced by the bank, rather than the whole case being thrown out, it will show the lender and their attorneys that not every homeowner is willing to be pushed around and intimidated by an unfamiliar court system.

Admittedly, it will be very difficult for homeowners to get the foreclosure lawsuit completely thrown out of court, leaving the bank with no other alternative than to write off the loan or start over and try to prove their case some other way. This happens in only a very small number of cases. But, homeowners with some knowledge of the foreclosure process in the court system, and the general theories of what the bank must do and how it can be defeated, will be in a much stronger position to come to a resolution that does not involve losing the home. Judges can order the parties to consider settlement ideas through mediation or arbitration, but homeowners too fearful even to show up at court will lose their opportunities for such alternatives to foreclosure. Even when homeowners are represented by an attorney, having a background understanding of the legal process will make the experience easier to comprehend.

By: Gary Carlsen

About the Author:

Foreclosure processes are the action taken when you became a defaulter after taking mortgage for your house. Generally foreclosure process gets completed by the auction of the mortgaged house openly and with the eviction of the original house owner from the house. This is a long process taking generally six months. The foreclosure process is initiated when you fail to respond to the repeated notices from the mortgage company to repay your loan amount.

Generally the circumstances lead the borrower to default the mortgage monthly installments. For a mortgage loan the rules are very strict and it is executed such that the lender doe not loose any amount and the interest there on. The owner will not get any humanitarian considerations such as losing job, accidents or other types of inabilities. Mortgage rules are very clear and it provides ample facilities to the lender to recover back the paid amount with interest.

If you make a one time default, then company will send you a notice detailing about the pending premium or EMI. They will remind you to pay the due as early as possible and may give you a time line. If you default again in the next month, the company will be issuing a legal notice asking you to pay the defaulted amounts, penal interests thereon, the legal and postal charges within a stipulated time. This time may be 15 days to one month. If you still do not respond to the notice by paying the amount and renewing the mortgage loan within the time period, they will initiate foreclosure process.

The Mortgage agency will be issuing another notice requesting you to payback full loan amount together with interests, legal charges, penal interests and other expenses within a short duration. Once this period is expired without any action from the original owner, the company will publish a foreclosure notice in dailies, highlighting the various details of the property, amount availed, total amount due to the company and all relevant details. The notice will fix a date for foreclosure and auction of the house. During this time original owner has the right to get back his property by paying full amount due to the company with other expenses accrued by the company.

Any national can participate in the auction process. Generally the auction amount will be more than the total amount due to the company plus other charges like taxes, registration fees and legal expenses. Once the auction is finalized, the amount will be given in a priority order with taxes to the states coming first and the original owner coming last. After paying all the dues, if any money is left in the auction amount, it will go to the owner. Then there is a redemption period by which the original owner can claim back the property by paying suitable amount. Foreclosure process ends with the eviction of the owner from the house legally by the new owner at the end of the redemption period.

The owner can discuss with the company or the new owner in redemption period and come out of the foreclosure process anytime if the owner is ready to pay the full amount at a time and close all activities regarding the mortgage loan.

By: Gary Carlsen

About the Author:

Most foreclosure relief companies offer one, two, or maybe a handful of various options that homeowners can use to stop foreclosure. While receiving an immediate solution to the situation, the homeowners are not confronting the real problem, of which foreclosure is just a symptom. It is just as important that foreclosure victims start putting together a long-term financial plan to prevent the devastating effects of another financial hardship. Here we examine a simple five-step program to completely stop foreclosure and repair their credit and begin a long-term financial plan. This program gives foreclosure victims the resources to pursue every single known way to save their homes. If they end up facing the loss of their homes and have to rebuild, it will not be for lack of trying every method possible. And even if the worst happens, this simple process is designed to clean up their credit and put them back into a house within a year after foreclosure.

The firs step in this process is to reverse the foreclosure process. Homeowners who have not been paying their mortgage need options to stop foreclosure and they need to be working on as many options at once. This may include looking for a private investor, working with the mortgage company to put together a repayment plan or loan modification, or going through our list of foreclosure loan specialists. But the first goal for homeowners is to stop the foreclosure process from running them over before they are out of options and out of time.

Recovery from the devastating affects of foreclosure is the second step for homeowners. This includes putting together a short-term plan to begin an emergency fund and a long-term plan to make sure that any financial emergency can be survived without a disaster. Regardless of being able to stop foreclosure or not, families who have faced the loss of their homes should have a comprehensive financial plan and budget that outlines their spending habits and provides structure to their monthly budget. That way, they may never fall behind on their debts again.

Cleaning up negative information on their credit reports is another important step to repair their finances completely from the foreclosure situation, and is the third step in this process. Homeowners should take the chance to repair their good names and credit histories by using the resources available to them either through self-help resources or by using a reputable company for assistance. This step includes removing negative information from their credit reports, as well as establishing a positive, on-time payment history again, regardless of past history. Within a few months to a year, previous foreclosure victims can raise their credit scores by 50, 100, or more than 100 points, allowing them to qualify for competitive interest rates without relying on confusing Adjustable Rate Mortgages or interest-only loans.

By the end of a year or so, the fourth step in the process will be ready. This involves refinancing the current home or repurchasing a new home. After a year of sticking to a budget, planning for any emergencies, and repairing their credit, the foreclosure victims will be in a situation where they can qualify for some of the best rates for home mortgages. They may end up lowering their payments by several hundred dollars a month, or they may qualify to consolidate all of their monthly debt payments into one cheaper, more manageable mortgage obligation. This is when homeowners transition from the short-term financial recovery phase into the long-term financial independence plan.

The fifth and last step in the process to be rewarded with the feeling of having become financially independent. This may mean having established a significant emergency fund and consolidating all debts into one payment, and it may mean having paid off the house completely and being able to retire early due to a wise retirement plan. But at this point, homeowners will never have to worry about any financial hardship again, as they will have the tools and knowledge that will allow them to survive any emergency. Whether it is a loss of job, medical disability or death, or divorce/separation, the family’s emergency fund will be able to get them through any problem.

Completing these five steps, from the plan to stop foreclosure to the plan to become independently wealthy and financially stable, should be the mission of any homeowner currently facing foreclosure due to a financial hardship. Every single homeowner, whether they are living paycheck-to-paycheck or are financially independent, is currently in need of a comprehensive financial plan to insure against the loss of their homes to foreclosure. From learning how to stop foreclosure, or how credit repair works, or how to retire early and never work another day in their lives, homeowners can come out of their current financial difficulties with a long-term solution and start living the life they have always dreamed of.

By: Gary Carlsen

About the Author: