Do You Have an Adjustable Rate Balloon Loan?
Most of my legal work is done on loans originated between 2004 and 2008 containing an adjustable-rate balloon loan. These types of loans are patently unaffordable, and in Wall Street's race to securitize these loans into profits, paperwork to proper title has been irreparably lost in a large number of cases.
If you have an adjustable-rate balloon loan that was originated between 2004 and 2008, you should contest the foreclosure to ascertain whether the foreclosing party actually "holds" your note as a matter of course. I will preform a document review of your loan documents for $150 to determine whether you have legal defenses to the foreclosure. I also will charge a flat-rate on a foreclosure defense where defenses exist depending on the amount of work anticipated.
Even if a homeowner does not have legitimate "legal defenses" to foreclosure, there are a multitude of free resources available to homeowners that are in arrears but have sufficient income for a modification or other loss-mitigation request with the lender. A modification however far from the end of the story. Most modifications simply re-capitalize arrears on the back-end of the loan or over the next five years. Although a modification gives you some breathing room, it may not solve the problem.
Do Not Pay Anyone Who Promises You A Modification. There are dozens of free HUD certified counsels in your area that act as an intermediary between you and the lender to obtain a modification. I will refer you to these counselors free of charge. If a homeowner desires, I will also pursue a modification simultaneously with a foreclosure defense.
My Lender Has Rejected My Modification Request
At this point, you still have several options depending on what you would like to do with the home.
A Homeowner can take the bankruptcy route. This option is usually best if the homeowner already has high unsecured debts such as credit cards. But homeowners should be aware that Bankruptcy Judges do not have authority to "cram down" a home mortgage to the fair market value of the home. Typically, a Chapter 13 payment plan will actually increase a homeowner's monthly payments on the home to account for past arrears and other fees. Bankruptcy is a good card but should only be used in the last resort. At the Law Office of Benjamin D. Busch, I will give you an honest opinion of whether bankruptcy is the best option.
CONTESTING THE FORECLOSURE PROCEEDINGS
A homeowner can (and in a lot of case should) contest the foreclosure proceedings. This is a non-bankruptcy option. Contesting the foreclosue case may reveal problems with the lender's paperwork. As described above, in cases of adjustable-rate balloon loans, homeowners should contest these foreclosures as a matter of course because too often the lender simply doesn't have the paperwork to be legally entitled to foreclosure.
But even in the more typical case where the lender does have the proper paperwork and a homeowner does not otherwise have equitable defenses to foreclosure, the homeown still possess a procedural due process right to a hearing. Contesting the proceeding will elongate the time before forecosure may legally occur if a homeowner simply desires a non-bankruptcy delay of the proceedings.
ABANDONING THE HOME
Sometimes putting money into an underwater mortgage doesn't make sense anymore. There are options other than foreclosure if the homeowner is ready to walk away from the home. A short-sale or a deed-in-lieu option will be less harmful on a homeowner's credit score than foreclosure . Some lenders will also offer a "cash for keys" arrangement for you to simply surrender your home.