Stopping a foreclosure on your home can be a miracle. For many homeowners facing a foreclosure, being able to save their home is about much more than just a property or asset consideration. Such a ruthless incidence has no personal affect on the lender, but may provide additional and unwanted stress to the homeowners, their family, and their safe-housing future. Some of the many reasons like these are why homeowners are often desperate to stop a foreclosure sale. Unfortunately, some of these scenarios include loyal families falling victim to foreclosure relief scams from unlicensed companies.
While it may not be a pleasant topic, the unfairness is so common, our firm was able to compose a guide in hopes of preventing these wrongful foreclosures. While we can't imagine what it may be like in your shoes, we can help provide as much foreclosure help as possible. The following options are displayed in order of importance -- in other words, most people would probably want to try these options in the order they are listed. Although the following may be great suggestions, not all are a "one size fits all," kind-of solution. Every person's unique situation must be carefully reviewed. If your home does not have a sale date, use the following 5 suggestions as a guide to avoid foreclosure. To fully confirm the decisions or legal actions you take are correct (and won't sabotage your home's condition), consider speaking to a trusted legal professional for further assistance and clarification.
The first step to stopping a foreclosure sale is one that might seem obvious, yet a surprising number of homeowners never even try. In other words, you may try to call your lender and reason with them. If you have genuine, valid excuses for not paying your mortgage, and can provide proof to back up your claims, some lenders will try working with you in good faith to save your home. This may be especially true for those who have a history of paying their dues on time. Homeowners should keep in mind that some lenders and loan providers are easier to work with when attempting to stop your foreclosure sale date. While some are fairly reasonable and open to working with you, others may have no interest in anything besides foreclosing on your property -- and they may even act in bad faith in order to do so quickly.
Although the process of obtaining a loan modification is a lot more involved than simply calling your lender and attempting to negotiate with them, modifying your home's loan may actually be the best solution for homeowners seeking to stop their foreclosure sale date. If your income has decreased and looks to stay that way for the foreseeable future, the original terms of your mortgage may not be realistic anymore. Furthermore, those paying a mortgage should be aware of their homeowner rights when facing foreclosure. A loan modification sets realistic expectations for what you are able to reliably pay moving forward.
One of the most important documents that California homeowners should be familiar with is the California Homeowner's Bill of Rights. Enacted into law in 2013, this landmark piece of legislation was an attempt to beat back overly aggressive lenders and give homeowners more tools, options, and avenues to avoid foreclosure.
Many banks view foreclosures as their best interest and tend to overlook some of the new rules and regulations required of them since the Homeowner's Bill of Rights went into effect. This gives a surprising number of California homeowners the very real option of suing their lender for attempting a bad faith foreclosure. Although the most common violation lenders commit is "dual tracking" (appearing to consider you for a loan modification while simultaneously preparing to foreclose), there are several common violations that give you the proper grounds to file such suit. Pursuing litigation is one of the most effective ways of avoiding foreclosure.
The outcome of a successful lawsuit can include a wide variety of scenarios including monetary damages. Each case is substantially different, therefore speaking to a licensed attorney to determine the strength of your unique case, is incredibly important. Although litigation is not easy and takes an average of six months to come to settlement, the result of successful litigation is a permanent solution that will allow you to keep your home, making the effort worth the time and consideration. Doing so properly may save your home from foreclosure in the future.
The last two options, short sale and bankruptcy, are less desirable than the others. This is because one must choose between their property or their credit. Initiating a short sale or deed in lieu allows you to walk away from your property (and the mortgage), at the cost of impacting your credit. While substantial, such is still less severe than foreclosure itself, or bankruptcy. When considering your final options at this point of importance, it's highly advisable one speaks to a trusted legal professional to learn more about their unique, foreclosure prevention options.
A short sale is the sale of your property for less than the balance owed on the mortgage. While the lender still takes a loss on a short sale, they are usually able to recoup a substantial portion of the property value. Homeowners who have exhausted their other options may find a short sale attractive because of the ability to walk away from an unsustainable financial situation. What's more, there are several government programs in place to provide monetary assistance (in some cases up to $10,000) to aid homeowners in relocating and getting back on their feet after a short sale.
As opposed to a short sale, which entails you lose the property but spare your credit from being totally destroyed -- bankruptcy will allow you to stay in your home for the time being. Although, the price you pay is damaging your credit for quite a long time. When trying to prevent foreclosure, homeowners must consider what option will properly suit them, based on their situation. One should always exhaust each and every option before filing for bankruptcy because of the severe and lasting effect it will have on their financial future.
When you successfully file for bankruptcy, all creditors and debt collectors are immediately halted from attempting to collect on anything you owed, including your mortgage. This means that you successfully stop the foreclosure on your property, but are not simply off the hook for your remaining mortgage. Bankruptcy law will give you time to get back on your feet, and will force your lender or provider to negotiate a realistic repayment plan in good faith. Depending on how determined you are to get back to a stable financial position, and how important staying in your property is to you, bankruptcy can be a viable last option compared to simply allowing foreclosure to happen.
There you have it, the top 5 options for those who are seeking to stop a foreclosure sale in California. Of course, there is no substitute for speaking with a real estate attorney who practices in California so that they can assess your exact situation.
-- Michael Avanesian, Esq. Note: Attorney advertising. Nothing posted on this blog is intended, nor should be construed, as legal advice. Blog postings and hosted comments are available for general educational purposes only and should not be used to assess a specific legal situation. Nor does any comment on a blog post create an attorney-client relationship. The presence of hyperlinks to other third-party websites does not imply that the firm endorses those websites, their contents, or the activities or views of their owners.
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