According to the RealtyTrac's Midyear 2014 U.S. Foreclosure Market Report, foreclosures in America seem to be falling. The report includes data up to June 2014 and indicates that foreclosure activity is the lowest it's been in 10 states (NV,AZ,TN,CO,GA,and TX) since August of 2006, when the housing bubble burst.
However, even though the overall statistics suggest that foreclosures are falling, there were 9 states (NJ,MD,IA,MA,and CT) that showed greater activity since 2013. The U.S. is still on pace for over 500,000 homes to enter the foreclosure process, and 350,000 homes to be repossessed. So there is definitely a foreclosure problem in the U.S.
So with that being said, if you or someone you know is in a foreclosure crisis, then hopefully this article will be able to assist you. There are various ways that you can fight foreclosure and win. Here are some of them.
Negotiate With Your Lender
If you are having financial difficulties, the worst thing that you can do is bury your head in the sand. A lot of people do this because they don't know how or what to do, and they pay the price for it. Even making a "less than the best" move is better than doing nothing. Now, there are various ways that you can negotiate with your lender.
Request a Forbearance
A forbearance is designed for individuals going through short term financial difficulties. It is an agreement between you and your lender to make partial payments (sometimes no payments) for a specified amount of time. Most lenders have a selection of forbearance options.
Modify Your Loan
Because getting something is better than getting nothing, sometimes you may be able to get your lender to change the terms of your loan. These changes include extending the amortization period (e.g. changing your loan from 10-20 years to lower the payments), lowering the interest rate (which will also lower your payments), and switching the rate (e.g. from adjustable to fixed)
Make a Claim
If you are behind on your mortgage, you lender may allow you to make a claim on your loan to bring it current. There are two types of claims you can make. The first is an Advance Claim. This is a loan from your mortgage insurers to to bring your loan current. The second kind is a Partial Claim. This is where you receive an interest free loan from your lender to cover the delinquent payments which will be due when you pay off your mortgage, refinance or sell your home. The second claim is only available to FHA insured loans.
Get a Housing Counselor
A housing counselor can fight on your behalf to negotiate a compromise between you and your lender, and also teach you how to get your finances on track. Housing counselors charge a fee, but it can be a good investment if it helps save your loan. But just remember that no one can guarantee the delay or stoppage of your foreclosure.
There are two types of bankruptcy that you can declare. The first is Chapter 7 (Which will allow you to discharge most of, if not all of your debt in exchange for the seizure of all property that is not exempt from collection. You can delay foreclosure for a couple of months but you won't be able to keep your home. The second is Chapter 13 (in which you agree to pay back most or all of your debt over a period of time). In this case you will be able to keep your home outright.
Use A Foreclosure Defense Strategy
A foreclosure defense strategy is one in which you attempt to prove that your bank does not have legal right to foreclose on you. Many families have used these strategies to fight for their home. In some cases these strategies can be effective.
Make Them Produce The Not
When you receive a mortgage, you sign a mortgage "note." This note states the terms of your loan, and obligates you to pay off the debt to the lender. This note is their "receipt." In order to enforce this debt, by law, they have to produce the note to prove they own it. Using this fight strategy can sometimes slow down and even stop proceedings. Lenders are often careless and "notes" get lost and/or destroyed (and they may not know how to retrieve them). That is, if they even own the note (which brings us to the next strategy).
Question the Chain of Title
In order to foreclose on a homeowner, a lender must prove they own the debt. This can be tricky because many mortgage companies "securitized" their mortgages and traded them in the market. The Mortgage Electronic Registration System (MERS) was set up to track the ownership of mortgages for this reason. But a lot of people (including courts sometimes) do not trust them. If you can successfully question the database and or do a securitization audit that shows bank fraud, you may be able to win in court and keep your home.
Leave Your Home Without Foreclosure
If you don't feel that you can fight and save your home, then there are ways that you can leave without the black mark of foreclosure.
Do a Short Sale
Short selling your house refers to selling your house for less than what you owe the mortgage company and having them to agree to take the "short" payoff. Some lenders will do this. If you can get your lender to agree to report it as "paid in full," it will not negatively affect your credit. If not, then it will.
Try a Deed in Lieu of Foreclosure
This is a last ditch effort strategy and lenders will normally not agree to this unless all other options have been exhausted. A Deed in Lieu is where you voluntarily transfer ownership of your property to your mortgage company in exchange for release from payments. Options are normally available for you to lease your home for up to a year or even stay in the home for up to three years.
Do an Assumption or Lease-Option
This is you sell your house to a third party, and they will assume the loan and allow you to lease the house from them. Your lender can be the buyer in some cases. In most cases the loans are "due on sale" and the borrower must pay in full when the property is transferred unless you can figure out how to get your lender to waive that clause.
Sale and Rent Back Firms
There are private companies that will offer to buy your house and rent it back to you. They are regulated by the FCA (Financial Council Authority). In most cases you will not be able to stay in your house permanently. Using these companies can be dangerous so research the FCA regulations, and make sure that the company is compliant with the FCA rules.
Well hopefully this article has been informative and has given you some insight on how you can fight foreclosure, and win. But remember, you must take action to succeed!