When does the foreclosure process start and how does it work?

What options do I have if I'm in foreclosure?

Foreclosure Rescue Scams - Don’t be a Victim!

“Stop foreclosure now!”  Ever seen a handmade sign bearing these words on the side of the road?  Or perhaps you’ve received an email from someone who promises to work with your bank and keep foreclosure from happening?  Foreclosure defense and “avoid foreclosure now” promises are everywhere, especially in a market that is still struggling.

    

While it is certainly important to seek help when you are facing a foreclosure on your home, knowing who to trust for the right kind of help is crucial.  The wrong kind of help can put you deeper in the financial hole than you were when you started.  Sure, there are a lot of people who say they can help you stop your foreclosure.  But are they legitimate?  Here are scams to watch for:

The "Forensic Audit"

Forensic auditors will attempt to collect an up-front fee from you in order to “look over” and “assess” your mortgage and foreclosure documents.  They will then use their “expertise” to review your mortgage documents and create a report how you can avoid foreclosure.  The funny part is that this process of reviewing the paperwork is just the first step that qualified foreclosure defense attorney will make and it’s an important one, but not enough.  That’s why the “forensic audit” promise is a scam if that’s all they’re offering. 

Rent-to-Buy Schemes

In this scam, a con artist will say that if you give them the title to your house, you can stay there as a renter and buy it back from them later.  They will tell you that when the title is surrendered to them, they can refinance it with their good credit to prevent losing your home.  What they won’t tell you, however, is that these scams often involve impossibly difficult “buy back” arrangements, allowing these new owners to walk away with your house AND your money. They might also raise the “rent” they agreed upon at the beginning and forcing eviction if you can’t pay the higher amount.  

Should I Try a Short Sale if Threatened with Foreclosure?

Should I Try a Short Sale if Threatened With Foreclosure?

If you have been unable to keep up with your monthly payments and are under the threat of losing your home in foreclosure, it might seem like you don’t have a lot of options and are financially cornered.  However, this feeling is normal when we experience stress and life-changing situations, although incorrect in this case.  You have several options if you are faced with a foreclosure and there are professionals who can guide you through them.

If you are being threatened with foreclosure in Miami, Florida, think of it this way: foreclosure is your worst case scenario. Not only will your lender take your house—they will charge you attorney and court fees related to filing the mortgage.  That’s why anything is better than a foreclosure, so it’s important to stop for a moment, take a breath, and find out your options.

One such option is a short sale of your home.  While most lenders aren’t particularly agreeable to the option, it involves you taking the initiative to sell your home for less than the amount of the mortgage.  The lenders will then weigh their options and either take the short sale offer or not.  Talk to anyone who has gone through a short sale in South Florida, and you might hear a different story.  Tales of multiple offers falling through at the last minute, endless “tire-kickers” traipsing through your home.  Sometimes there are better ways of resolving your problem.

A short sale will likely affect your credit somewhat—possibly as much as lowering your score by 200 points.  However, it is important to realize that this is not NEARLY the beating your credit report will take if your home is foreclosed on.  200 points can be fixed with a year or two of responsible credit use, but the after effects of a foreclosure will take longer.  

Still—a short sale will be a better option for you than a foreclosure.  A qualified bankruptcyattorney could lead you through the process and help you connect with a real estate agent who specializes in short sales.  Professionals on your side in situations like these are always an asset—the more, the better.  

Should I just ignore my foreclosure summons and turn my home over to the bank if I can't afford a lawyer?

Ignoring a Foreclosure: Why You Shouldn’t Make it Easy For Them To Take Your Home

Believe it or not, there are worse things the bank can do to you than foreclose on your home.  First, they can convince you to make it easy for them.  Then, they can charge you enormous court and attorney fees for the process they had to go through to take it. 

In fact, they get by with this tactic all the time. A recent study showed that 95% of the foreclosures in this country were foreclosures in which the homeowners didn’t do anything and simply handed over their home without a fight.  They fell for the bank’s bait of “don’t give us any hassle” and walked away from the home and stability they had worked so hard for—it’s such a sad waste.  

Banks are telling homeowners it is okay not to respond because they know that many people can’t afford an attorney, or feel overwhelmed with their financial situation and want to avoid any conflict.  Here’s the truth.  A foreclosure is a lawsuit.  A lawsuit is an adversarial process, it’s you versus them.  Of course they don’t want you to fight back.

A knowledgeable attorney will have an array of tools (including bankruptcy) to help you meet your goals.  There are several bankruptcy attorneys who will provide assistance with your foreclosure pro bono or who will offer payment plans to fit your budget.  You should never let worries of what’s affordable convince you to make it easy for Wall Street to take your home without a fight.  Take our word for it—you need someone to fight in your corner.