I have nowhere to go, I haven’t defended my foreclosure, can I save my home?
This is one of the most frustrating scenarios I face in practice on a day-to-day basis. A homeowner that hasn’t defended a foreclosure lawsuit, or didn’t even know they were being sued, and is facing a non-jury trial in the next 3-10 days and meets with me asking “how can I save my home?” This is a question asked to me, everyday, by homeowners throughout the state of Florida that are involved in a foreclosure lawsuit. It used to be a very frustrating situation for me, as I could see the desperation in their eyes, only to be told, “there’s not much you can do.” You see, I’ve been told by my staff, clients, and other attorney’s that I litigate foreclosure cases aggressively. I am not afraid to make the bank prove they have the right to foreclose on property and try to poke as many holes in the evidence that is offered as I can. Usually, the bank overcomes the defense and can foreclose, but at least it had to prove it and meet its burden. My ideal case, however, doesn’t go to trial – it ends in either a loan modification, short sale, or deed-in-lieu. Those cases, where there were 3-10 days prior to trial, usually couldn’t end that way, and my client could have been facing a significant deficiency judgment based merely on when they hired me. But not anymore…
What changed then?
Most foreclosure defense attorney’s in Florida faced the same issues, the state of Florida wants to foreclose on property more efficiently, at great costs to a homeowner’s rights. Home owners finally got some relief, by way of a recent addition to the Real Estate Settlement Proceedures Act. A little know change to this act was a provision that protects homeowners looking for a loss mitigation alternative to foreclosure (e.g., a short sale, loan modification, deed in lieu, or other workout option.) Basically, it requires that loan servicing companies fully review your loss mitigation documentation prior to trying to get a final foreclosure judgment or proceed with a sale of the home. In essence, it gives homeowners another chance at answering the question “can I save my home,” in the affirmative. It also gives a more complete review to short-sale and deed in lieu requests as well, which may be the difference between a deficiency judgment and a deficiency waiver
How does it work?
Basically, the exact requirements vary by the lender, but you are required to submit a full loss mitigation package to the servicing company for your loan. Notice, I said FULL. Not partial. Not most of it. BUT FULL. This process is extremely frustrating and tedious, as it requires specific documents, filled out a certain way, and submitted to a particular department. They also can only be a maximum, for the most part, of sixty (60) days old. If you are trying to do this on your own there is no doubt, it is incredibly frustrating. Even my staff gets frustrated at times with the banks – they lose documents, they request the exact same documents over and over, they don’t have an update when they are called three days after receiving documents, it is always the same story. But when applying for a loan modification under this new law, it is often the last chance for a homeowner to save their home. If a homeowner is doing a short sale negotiation, it is often the last time that they can try to work out something with the bank and hopefully remove any deficiency judgment from the table.
My trial is in X days – what do I do?
If you want to take full advantage of this new law, I recommend consulting with a foreclosure defense attorney, especially if you want to try to save your home. If you are facing foreclosure, and want to try to save your home, this may be the last chance for a loan modification. If you just want to avoid a deficiency judgment, using this change to RESPA may help you get a short-sale approval that waives a claim for a deficiency. It is important that if you retain an attorney, you fully cooperate with him or her in order to comply with this new law and submit all the required documentation. If you have any questions about how this law may help you, please contact my office at 813.252.0239.