Foreclosure Defense: A Way to Keep Your Home from Getting Foreclosed

According to the America’s Debt Help Organization, about 4.2 million US homeowners lost their homes due to foreclosure between 2007 and 2014. Foreclosure, based on the definition of the U.S. Department of Housing and Urban Development, is a legal process wherein a creditor or mortgage lender puts up loan collateral (most commonly a house) for sale to recover mortgages unpaid by a borrower. The process that leads to foreclosure usually starts after a borrower fails to pay his or her mortgage for three successive months.

Foreclosure has two major types: Judicial and Non-judicial. In Judicial foreclosure, a lender or mortgagee, which is usually a bank, is first required to file and win a lawsuit to have the right to foreclose on a property. While lenders normally do not make a legal move until a debtor has failed to pay the mortgage for three consecutive months, they actually have the legal right to foreclose on a property even with just a single default on payment.

A Judicial foreclosure procedure takes several months or a year to be completed. Currently, this foreclosure process is available in almost all U.S. states except in Michigan, New Hampshire, Tennessee, Utah, West Virginia and the District of Columbia.

In Non-judicial foreclosure, a lender does not need a court order to be able to foreclose on a property. This type of foreclosure, however, is only allowed if a “power-of-sale” clause is included in the deed of trust. The power of sale, whether in a deed of trust or mortgage, indicates the consent or a borrower to the selling of his or her mortgaged property through non-judicial foreclosure in the event that he or she defaults in payment. The lender, however, will first have to notify the owner of the property before his or her property is auctioned off.

The list of states where Non-judicial foreclosure is available includes Alabama, Alaska, Arizona, Arkansas, California, Colorado, Georgia, Hawaii, Idaho, Iowa, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, North Carolina, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, Wyoming and the District of Columbia.

In states where both foreclosure processes are available, non-judicial foreclosure should be the process used if the borrower signed a mortgage that contains a power of sale clause; the judicial foreclosure process should be used, however, if the power of sale clause was not signed.

Foreclosure can be a serious threat, especially to those contending with other debts. This is because other financial concerns can quickly render mortgage payments unaffordable. There are steps, though, as stated in the website, which can be taken to help prevent or delay the foreclosure process. Foreclosure defense is one of these steps which can protect owners from creditors who intend to have their home from being foreclosed.

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Foreclosure Defense Strategies

Losing a home is a stressful event, and it has led to divorce, families separating, and a plethora of psychological problems. But a foreclosure does not happen overnight. Homeowners can avoid a foreclosure given the proper advice.

It is no secret that home foreclosures are widespread in the US, although it is currently on a downward trend. This could partly be due to the aggressive foreclosure defense strategies that homeowners are using to protect the assets that they have accumulated through hard work.

One of the most commonly utilized foreclosure defense strategies is bankruptcy. There are several types of bankruptcy that could apply to a specific individual facing foreclosure. This includes Chapter 13 bankruptcy, which is essentially a restructuring program, and Chapter 7 bankruptcy, which is largely debt forgiveness. A foreclosure defense lawyer can help determine which type of bankruptcy would best suit the circumstances of the debtor, but the priority is to avoid foreclosure of the home.

Another foreclosure defense strategy is mortgage modification. There are federal and state programs which are designed to help distressed homeowners avoid losing their home by motivating lenders to agree to change the terms of the mortgage that will give homeowners a chance to recover.

It may also happen that certain lenders may not have been dealing fairly with their clients to the extent that they are violating some aspect of the Truth in Lending Act. It would be wise to have a foreclosure defense lawyer check out the mortgage agreement for any evidence of this.

The worst thing a homeowner who is facing foreclosure can do is to do nothing until it is too late. There is no profit in wallowing in self-pity; what is needed is positive action. Get a professional to assess your situation and see what you can do to stop foreclosure in its tracks.

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