A home is a person’s most valuable asset.  It only makes sense that you would want to protect your asset. If you are falling behind in your mortgage payments or facing foreclosure, a loan modification attorney can protect your interests and help you stop foreclosure through loss mitigation.  Loss mitigation is a process that the lender and the federal government have gotten together to help homeowners find other options to keep their homes.

Loss Mitigation Process

Since most homeowners are not familiar with the loss mitigation process, it is extremely important that they hire a real estate attorney who can guide them through the process easily and quickly. You may only get one opportunity at loss mitigation so you want to do it right the first time. An attorney is experienced with negotiating loss mitigation resolutions with lenders and have a greater success rate than a homeowner who attempts to do so on their own.

Loss mitigation involves the following alternatives to foreclosure:

• Reinstatement
• Payment program
• Forbearance
• Deed in Lieu
• Short Sale

A mortgage modification can take 3-6 months to get approved. The attorney will prepare the application, authorization, hardship letter and submit the financial information required by your lender to help you negotiate the best rate and terms for your modification.

Why Choose a Real Estate Attorney to Help?

Real estate foreclosure defense attorneys can help negotiate the right solution for your financial situation by introducing you to programs that can help save your home. They also can represent you in court proceedings, write letters on your behalf and prepare the proper documentation as well as explain all your legal options to save your home from foreclosure.

Can You Afford a Lower Payment?

If you can afford a lower payment, then a mortgage modification is the right choice to save your home. A loan modification attorney has many years of experience negotiating with lenders, and knows how to get your payments lowered to ones that you can afford so you can keep your home.

If you don’t think you can afford a lower payment, the attorney can find another solution for you. A short sale may be the appropriate option in that case. The short sale takes awhile to get approved, but your attorney can negotiate that you just walk away after the closing without owing your lender any more money.  This way you can focus on more important things in your life.

It’s foolish not to at least speak to a foreclosure defense attorney .Many offer free consultations or reduced rates for initial consultations. Why risk losing your home when a foreclosure defense attorney can help you keep it or at the very worst delay the foreclosure proceedings so you can stay in your home and not have to make any payments.

Mistake #1
Do nothing. This is the worst mistake that most homeowners do. They feel helpless, overwhelmed and just do nothing. If you fall behind on your mortgage payments, call you lender and find out your options. Or contact a mortgage modification company or your mortgage broker and consult with them as to what you can do to avoid foreclosure of your home.

Mistake #2
Avoid communicating with their lender. Call and write to your lender and discuss your situation. Find out if you qualify for a mortgage modification plan or whether you qualify to refinance your home.

Mistake #3
Waiting too long. If you are more than 3 months behind in your mortgage payments, your lender could start foreclosure proceedings against you. There is still time to save your home by contacting your lender, a mortgage modification company, your attorney or financial adviser. You have other options. Short sale, selling your house if you have equity, deed in lieu of foreclosure, mortgage modification, and last resort bankruptcy filing.

Mistake #4
Moving out of their home. If you do get a notice of default or some other legal document stating your lender has started foreclosure proceedings against you, do not move out of your home. A mortgage modification company or an attorney can help you negotiate with your lender options for saving your home, giving you more time to stay in our home and sometimes without having to make any mortgage payments while you are negotiating with your lender.

Mistake #5
Falling victim to an unscrupulous criminal who says they can help you save your home. Check out anyone who asks for money upfront and claims to be an expert in handling mortgage modifications or other negotiations to save your home. There are numerous legitimate mortgage modification companies and housing counselors helping homeowners so always check references and credentials before you pay any one to help you save your home from foreclosure. The only person who is legally allowed to charge an upfront fee is an attorney who may charge a retainer for their services.

Mistake #6
Not consulting with a professional advisor and asking for help. Many homeowners are too embarrassed to seek professional help, and as a result they lose their home to foreclosure because they are not properly advised on their options.

Mistake #7
Being in denial and not believing that their lender will foreclose. Lenders are in the business of making money, and if you do not pay your mortgage, they will institute foreclosure proceedings and foreclosure on your home. However, lenders would much rather work with their borrowers and avoid foreclosure. An average foreclosure costs the lender around $50,000.

Mistake #8
No using other assets to save their home. If you have assets, then you may want to consider
selling them to pay your mortgage balance current.

Mistake #9
Not being educated and informed on foreclosure laws. There is a lot of free information available to homeowners on the Internet that they can take advantage of to educate themselves on their rights and remedies with regard to their state’s foreclosure laws.

Mistake #10
Not hiring a foreclosure defense attorney to defend them in a foreclose proceeding. You have rights and remedies to defend yourself in a foreclosure proceeding. A real estate foreclose defense attorney can help defend you and save your home. Seek legal help immediately.

Many times the lender has incorrectly filed foreclosure proceedings, and your attorney will be able to recognize whether they have properly filed the action or not. Also, you may have been a victim of predatory loan practices and be able to rescind your loan. Your attorney will conduct a forensic loan audit to make sure that your lender complied with all Truth and Lending and RESPA disclosure laws. If there is a violation, your attorney can use this as leverage with your lender to get a favorable result for you and save your home from foreclosure.

Step 1
Find out from the lender if the property qualifies for a short sale. Depending on the lender or loan servicer, they will probably need the following documentation to determine if the property qualifies:

• Hardship letter from the seller.
• Authorization letter authorizing a third party to contact and negotiate with the lender.
• Last two paycheck stubs.
• Most recent bank statement.
• 1099 for W’2 forms for the last two years.
• Last two year’s income tax returns.
• Comparative market analysis showing the most recent sales in the area. This can be prepared by a Realtor.

Your attorney, third party negotiator such as a title company or Realtor can submit this information to your lender on your behalf if you sign the authorization letter naming them as your authorized representative.

Step 2
List the property for sale with a local Realtor who will market the property to potential buyers. This is really important because you need the most exposure possible for your home to sell. Be sure to list the home at or slightly below market value so that you will attract a buyer quickly. Another smart tactic is to offer a higher commission than 6% to get the brokers to show the property to their buyers. The lender will have to ultimately approve the commission anyway because they are the one that will be paying it, but it’s a good strategy to get more activity on the property. Your Realtor will advertise in the MLS that the property is a short sale subject to third party lender approval and that the commissions may be reduced so the brokers and the buyers are aware of the short sale, and there is no confusion later on.

Since you owe more on the property than what it is worth, you will not get any proceeds out of the sale anyway so don’t list the property too high. It will just sit on the market, and you will lose valuable time. Your lender will also get a broker price opinion from local Realtors as to what they think the home is worth so most likely the lenders will be reviewing the same comparable sales that you did in determining your list price.

Step 3
Submit your short sale package listed above together with a copy of the purchase and sale agreement and any brokerage listing agreement to the lender for their approval. The lender will pay all the seller’s closing costs, back taxes and HOA or Condo Association dues and the broker’s commission.

Step 4
Follow up with the lender to make sure they received the short sale package, and keep calling every day until a negotiator is assigned. This way you keep reminding them you are out there and you want to sell the house and move on. Today, more than ever lenders want to work with you and avoid a foreclosure if at all possible. Foreclosures on average cost lenders $50,000 per foreclosure.

Step 5
Negotiate the offer with the lender. It may take a few rounds of countering back and forth with the buyer and the lender before the lender and buyer come to terms. Sometimes, short sales fall through because the lender is not willing to accept the buyer’s offer, or the buyer’s get frustrated because the process takes so long and they find another property. It is important that your Realtor explain the short sale process to the buyer thoroughly so they understand that the process can take as long as 90 days or longer. Sometimes it is best to work with an investor on short sales because they are not in a hurry, as they are not intending on living at the property.

Step 6
If the offer is not accepted, then you will need to find another buyer and start the process again. However, by this time your lender will have pre-approved a list price which is acceptable to them so that you can offer the home to sale to the next buyer at the pre-negotiated price. This speeds up the process considerably if you have the short sale pre-approved first before putting the house on the market. Although sometimes the borrower does not have enough time to go through the pre-approval process first and then list the home for sale. That is why it is so important to start the process sooner than later before time runs out, you are in default, and the lender starts foreclosure proceedings against you.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.

The Beginning
The lender will send out written notices letting the homeowner know how much they owe and how far behind they are on their mortgage payment. At this point, the homeowner should contact the lender if they have not done so already and see if they can work out a payment plan such as a mortgage modification or refinance, reinstatement, etc. to catch up on the payments, or sign back the home to the lender with a deed in lieu of foreclosure. In some instances, the homeowner will decide to sell their home in a short sale, asking the lender to take a reduced amount on the mortgage balance. If the homeowner does have equity, then they will be able to sell the home and pay off the mortgage.

Where none of the above solutions can be negotiated, the lender will start foreclosure proceedings by either filing a notice of lis pendens with the court (judicial proceedings), or filing a notice of default (non-judicial proceedings), serving all parties, and publishing the required notices in the newspaper of general circulation in the county where the property is located.

Keep in mind though that lenders would rather resolve the default with the borrower then institute foreclosure proceedings because the average foreclosure costs the lender approximately $50,000.00.

Middle
During the time the proceeding is instituted, the borrower has a statutory period of time to respond and defend themselves against the foreclosure, and/or to redeem the property prior to the sale or reinstate the loan by paying the arrearages and any fees and costs. The redemption periods are based upon state statutory law.

In a judicial proceeding, the court will issue an order for the sale of the property. In a non-judicial proceeding, the trustee will record a notice of sale with the county recorder’s office. The notice of sale in both proceedings will be published in a newspaper of general circulation in the county where the property is located. A notice of the sale will also be posted at the courthouse and at the property with the information about the date of the sale and the contact person or if the sale has been postponed.

End
The last stage of the foreclosure process is the foreclosure auction sale, which is typically conducted at the courthouse steps or some other place designated by the sheriff or trustee. This again depends upon what type of foreclosure action is instituted and the laws of each state.

The highest bidder will be awarded the property. Generally the bidder is required to bring a cashier’s checking representing 10% of the purchase price in order to bid. Some states require the entire amount of the bid to be paid at the end of the auction. Title will then be transferred to the new buyer. The new buyer takes the property in an as is condition and will have to clear any title issues, evict any tenants or owners still remaining on the property, and will not be able to obtain title insurance.

Some states also allow the lender to file a deficiency judgment against the former homeowner/borrower for the difference in the amount the borrower owed on their mortgage and what the property sold for at the foreclosure auction.

If there are no successful bidders at the foreclosure sale auction then the bank acquires the property back and it becomes a bank owned property or real estate owned (REO). At this point, the title and back taxes and liens will be paid off by the bank. The time period between the sale and actually listing the property could be as long as a few months or more until the property is ready to be marketed. Sometimes the bank will make repairs to put the property in a condition that it can be sold, such as repainting and replacing carpet.

The property will then be listed with a Realtor who will market it through the local MLS and other resources to attract buyers to sell the bank owned property. Title insurance will be able to be obtained by the new buyer, and the buyer will be able to conduct an inspection of the property. REO properties are sold in an “as is” condition. Bank owned properties are usually priced at or slightly below market value.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.

Increase in Attendance
National church statistics reaching back to 1968 indicate that with each period of financial trouble in the United States there was a more than 50% increase in church attendance as well. People were seeking the companionship of those who were looking to spirituality for their needs, and also to a community of nurturing and support.

So, with that being said, what can churches do in the current climate? What can they do to help those facing foreclosure? While supporting faith and community, they can also extend any resources that can help meet the needs of those struggling all around. For example, food pantries and soup kitchens are vital resources to many families struggling to make ends meet. Support and discussion groups can help people to really open up and “vent” to others about their anxiety and fear. Additionally, a church can sponsor all kinds of beneficial workshops and discussions about a homeowner’s alternatives.

For example, a church might start a community garden for those who need to save money on food and who don’t mind contributing some “sweat equity” to the process. They could also host a visit from a loan modification expert or company who can review people’s options for loan modification or repayment plans. This is a great way to provide church and community members with no-cost access to the type of professional that can help them avoid foreclosure if at all possible.

True Community Pillars
Loan modification is the process underwritten in the United States government bailout of the banking industry. Roughly $75 billion dollars is available for banks and borrowers who will need to renegotiate their loans and repay any sums which they might owe their lender.

Churches can be true community pillars, particularly in time of national crisis. Right now they can really help people by encouraging them to keep moving forward and finding as many solutions as possible.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.