The sad truth is that lenders, their lawyers, and many foreclosure scammers
out to exploit people facing foreclosure, benefit from the fact that most
homeowners usually know nothing about the foreclosure process or what rights
they have. Did you know that almost 95% of Florida homeowners do nothing to
defend their foreclosure suit? Unfortunately, this is the quickest and most
certain way to lose your home or investment property.
You Have Rights
The first and most important thing to know if you are facing foreclosure is
that you have rights, both in and out of the courtroom. Foreclosure in
Florida is a civil lawsuit, and just like any party to any other lawsuit, you
have legal rights meant to protect you. Plus, lenders and their agents must
be licensed, and have to comply with a complex scheme of local, state, and
federal laws and regulations that are designed to protect you, the borrower.
It is quite possible that the protections afforded to you as a litigant and
your rights as a borrower can help you to defend your home. But you must take
action in order to assert those rights.
Lenders Make Mistakes
Lenders make mistakes. Lenders’ attorneys make mistakes. Common mistakes
include:
Missing signatures on important documents
Lost paperwork, including the original note or gaps in assignments (watch out
for “re-establishment” claims in your paperwork, as this is an important clue
that may mean your lender has lost important documents necessary for
foreclosure)
Missed deadlines or failure to file required documents
Incomplete/Inaccurate Truth In Lending Act disclosures (which may even give
you the opportunity to rescind the loan)
Hidden fees or illegal interest rates (usually rare, but it happens!)
Failure to properly credit Borrower payments
Mistakes can prevent the lender from being able to foreclose on your home,
give you a viable counterclaim to assert against the lender, or even allow
you to rescind your loan. And mistakes are not as uncommon as you may think.
In the heyday of lending, many loans were auto-processed then packaged into
securitization pools and sold on the open market. This means loans were
transferred anywhere from 1 up to 8 or 9 times! When you understand the
context in which many of these loans were made, it’s easy to understand how
there are so many missing assignment or lost notes.
In the current foreclosure crisis, lenders’ attorneys handle very large case
loads, often for small flat fees, and are extremely overworked. These
conditions are conducive to missteps, small errors, and larger mistakes that
can have the effect of prolonging the foreclosure processes or stopping the
foreclosure process altogether. When homeowners don’t fight, or don’t know
how to fight back, it makes the lawyers’ jobs much easier. If more and more
homeowners decided to stand up for their legal rights, these lawyers would
have to start working much harder, making it even more difficult to keep up
with the necessary paperwork and deadlines in every case. The current model
works well when most homeowners are unaware of their rights and don’t fight
back. It is in a lender’s best interest to foreclose on your home as quickly
and easily as possible. This will not happen if you fight the foreclosure.
It Takes A Long Time To Foreclose On Your Home If You Defend The Foreclosure
Defending your foreclosure can ease the time pressure you may be feeling
right now. Foreclosure can be a very quick process – from filing to auction
in as little as 45 days – if the homeowner doesn’t bother to contest the
case. But when there are legitimate legal defenses, the court needs time to
figure everything out. The courts are extremely backed up due to all the
foreclosure cases on the docket. It’s common for homeowners to remain in
their homes for a year or more (even up to three years is possible) while
defending the foreclosure. The time it takes to fight your foreclosure can be
all the time you need to refinance, negotiate a work-out or modification, or
sell your home on your own terms to avoid foreclosure altogether. And you
should know, foreclosure attorneys are also often able to negotiate with the
lender to waive deficiency judgments. If nothing else, defending the
foreclosure takes the immediate time pressure off you while you work toward a
solution.
What Your Lender Really Wants
Is money, not your house! Banks aren’t property managers, or in the real
estate ownership business. Plus, they already are stuck with an extremely
large housing inventory that’s difficult to move in the current market. If
you can convince them that you will give them more money than they would get
in a deeply discounted foreclosure auction, then you may be able to keep your
home. Plus, Floridians have what is called a “right of redemption” – which
means you can pay off your loan balance and keep your home at any time before
the foreclosure sale. The time you get by defending your foreclosure may be
enough to allow you to redeem your house, or negotiate a modification.
Many Contested Cases Settle
As I mentioned above, the bank’s primary goal throughout the entire
foreclosure process is to get one thing: money. Owning your home and having
to sell it at a steep discount does not help them reach this goal. Many cases
settle before sale through: negotiation of the terms of the loan
(modification or refinance); finding a qualified buyer, getting lender
approval and moving out on your own terms without deficiency liability (short
sale); negotiation for more time to bring the loan current; or finding a loan
from someone else to bring the loan current. Nothing helps you get a good
settlement more than a willingness to defend your rights.