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You Can Stop a Mortgage Foreclosure Sale by Filing an Answer to the Lender’s Foreclosure Complaint

Bankruptcy — Wed, 21 Jul 2010 13:41:39 +0000

Yes, you can successfully challenge a bank’s foreclosure complaint, even if you owe substantial arrears that you are unable to pay. Moreover, responding to a foreclosure summons and complaint can be accomplished without hiring a lawyer, and can yield enormously positive results for homeowners who would otherwise suffer the loss of their homes at foreclosure sales. Stopping foreclosure, though not guaranteed, can occur with the filing of a foreclosure answer even in circumstances that initially appear to be hopeless.

Recently, a several court decisions have been issued by judges that strongly condemn the abusive tactics of lenders, and which have relieved homeowners of some or all of their financial obligations. In April, 2010, a judge in Suffolk County, New York, ordered a lender to pay $100,000 to the homeowners as punitive damages for engaging in “deplorable” conduct. The lender’s misconduct included, among other things, requiring the couple to agree never to file for bankruptcy and refusing to engage in good-faith negotiations during settlement conferences that were mandated by 2008 changes to New York’s foreclosure law.

The foregoing decision is just the most recent example of several decisions that have been issued by courts in New York, Florida, Ohio and elsewhere, in which lenders and loan servicers were taken to task for engaging in abuse and failing to engage in good faith discussions regarding alternatives to foreclosure. Increasingly, state legislators and courts throughout the United States have implemented procedural and other obstacles to ensure that banks are forced to enter into good-faith settlement discussions before application is made by the bank for a foreclosure judgment. As shown by the recent decision in New York, failure of a bank to comply with the law can result in a windfall to the homeowner.

The key to success for a homeowner is to file an answer to the lender’s foreclosure complaint. By answering a foreclosure complaint, a homeowner not only delays the foreclosure process, but gets the opportunity to expose any misconduct of the lender to the court. This may be accomplished by including affirmative defenses in the foreclosure answer form. These defenses should include, among other things, defenses based on the lender’s violation of the truth in lending act.

Many homeowners assume that it would be futile or unduly expense to file an answer to foreclosure. In fact, the forms are not only fairly straightforward, but also available online for a reasonable fee.

If you are facing the possibility of losing your home to foreclosure, the professionals at http://www.StopForeclosureForms.com can help. Foreclosure answer forms are available for download from http:///www.StopForeclosureForms.com. We are the leading provider of foreclosure defense forms for all fifty states. We were founded by attorney Marc. A. Rapaport, Esq., an attorney with 15 years of experience in mortgage foreclosure defense and commercial litigation. Do not sit on your rights and lose your property. Download and file a foreclosure answer form to protect your rights!

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You Can Stop a Mortgage Foreclosure Sale by Filing an Answer to the Lender’s Foreclosure Complaint is a post from: Bankruptcy Court Online

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Shadow Inventory – Confusion Reigns

Sean — Wed, 04 Nov 2009 01:29:12 +0000

There is currently no shadow inventory of bank-owned (REO) properties. What’s more, a surge in REO properties is not likely anytime soon.

If this sounds familiar, it’s because I’ve said it before, here and here and other places. However, it still seems to be news (see the recent WSJ article) and despite the fact that the most recent CA Foreclosure Report from ForeclosureRadar.com runs the numbers, some still insist the shadow is there.

Shadow Inventory – Confusion Reigns is a post from: Bankruptcy Court Online

September CA Foreclosure Report – More on the “shadow” inventory

Sean — Thu, 15 Oct 2009 00:09:24 +0000

This month’s report features not only a new look, but an important new statistic - Bank Owned (REO) Inventory. By looking at the number of foreclosures the banks have taken back and subtracting those that have since resold, we are able to show the number of foreclosures the banks have held as inventory over time.

Click here to download the September CA Foreclosure Report.

Check out our new video version:

Short Sales – Time to Take Control

Sean — Wed, 14 Oct 2009 04:45:30 +0000

I mentioned previously (http://www.foreclosuretruth.com/blog/sean/are-foreclosure-sales-simply-h...) that as a society we don’t have the political will to foreclose on every mortgage in default. As a result, we see government interventions including foreclosure moratoriums, troubled asset relief, and new loan modification programs. However, these are at best stop gap measures — each failing to adequately reduce principal balances to address the core problem of negative equity.

It’s time to stop waiting for a government bailout or for the bank to come take the house. Homeowners in default don’t have to choose between the lesser evil of foreclosure or a government solution that leaves them a prisoner of debt. There is another way — a short sale.

Short Sales – Time to Take Control is a post from: Bankruptcy Court Online

Are foreclosure sales simply HAMPered?

Sean — Tue, 15 Sep 2009 07:20:24 +0000

In my last post Waiting to catch a wave? Surge of REO's unlikely, I speculated that foreclosures had dropped primarily because of U.S. Treasury Secretary Henry Paulson's announcment to seek troubled asset relief for banks. The result being that banks are incentivized not to foreclose thanks to mark-to-model accounting changes, and an implied promise that the Fed or taxpayers will take bad loans off their hands at a premium if necessary.

This topic, and shadow inventory, which I also recently posted about, have been hot topics in the blogosphere and in the news. Many have predicted a wave of foreclosures is coming, while others are predicting that foreclosures are being held off the market to manipulate home prices. If you read my recent posts you know I have a different take. A few days ago, Diana Olick of CNBC did what I hoped someone would do and put the question directly to Bank of America. They essentially said that foreclosures had been delayed by the Making Home Affordable program, and would likely increase soon.

Are foreclosure sales simply HAMPered? is a post from: Bankruptcy Court Online

Waiting to catch a wave? Surge of REO listings is unlikely.

Sean — Mon, 10 Aug 2009 06:25:12 +0000

For a number months now I've been telling reporters and others that I didn't think we would see the big wave of foreclosure sales, and subsequent REO listing that some have been predicting. Until recently that was mostly based on a gut level feeling that banks (servicers) simply didn't have the will to complete more foreclosures given the anti-foreclosure backlash. With a little hindsight, things have become clearer.

Waiting to catch a wave? Surge of REO listings is unlikely. is a post from: Bankruptcy Court Online

Is REO inventory hidden in the shadows?

Sean — Mon, 10 Aug 2009 04:37:06 +0000

I'm regularly asked about the so-called "shadow inventory" of bank owned homes that are supposed to flood the market at any moment. First, lets be clear about what shadow inventory is. These are homes that the bank has already foreclosed on, but has not yet listed. It obivously does not inlcude homes the bank has already sold, nor the ones it has listed for sale.

Is REO inventory hidden in the shadows? is a post from: Bankruptcy Court Online

June Foreclosure Report: Moratorium has unexpected impact – may be short lived

Sean — Tue, 14 Jul 2009 16:59:48 +0000

ForeclosureRadar.com released its June 2009 CA Foreclosure Report today. While foreclosures were generally trending upward, Notices of Trustee Sale unexpectedly dropped, apparently due to the new California Prevention Act that went into effect June 16th. Despite the majority of major lenders in the state receiving an exemption from the act, filings dropped by nearly 50 percent as soon as the act went into effect. Filings were climbing back toward previous levels by the end of June so we still expect the law to have little long term impact.

June Foreclosure Report: Moratorium has unexpected impact – may be short lived is a post from: Bankruptcy Court Online

How Bankruptcy Can Help Stop Foreclosure

Bankruptcy — Tue, 16 Jun 2009 00:54:01 +0000

By Timothy McFarlin -

If pre-foreclosure resources have been expended and the lender had formally initiated foreclosure proceedings, bankruptcy is an option to stop foreclosure if a short sale or obtaining a deed in lieu of foreclosure fails. Bankruptcy can stop all debt and is an option if your debt grows too difficult to clear.

Bankruptcy could be preferable to foreclosure since it erases debt and so the borrower can build good credit sooner. A foreclosure will put a large dent in the credit score and but does not cancel the debt so it may take longer to build credit.

Filing a Chapter 13 or Chapter 7 bankruptcy allows the court to issue an “automatic stay” that directs creditors to cease their collection activities. This stop is active for three to four months while bankruptcy proceedings are held. Be warned that a lender could motion to lift the stay and proceed with the foreclosure if you begin proceedings too late.

Chapter 13 Bankruptcy Advantages

Also known as a wage earner’s plan, borrowers can develop a repayment plan to make installments to creditors over three to a maximum of five years. During this time, creditors cannot continue their regular collection efforts. However, borrowers must still make all mortgage payments within the Chapter 13 plan on time. Other secured debts can be rescheduled over time to lower the payments. Borrowers make the payments to a Chapter 13 trustee who then distributes payments to creditors so there is no direct contact between creditors and the debtors.

Chapter 7 Bankruptcy Advantages

Chapter 7 bankruptcy will erase the debt that is secured by a borrower’s home. However, the bankruptcy trustee gathers and liquidates the debtor’s nonexempt assets to pay the creditors. FORECLOSURE IS NOT CANCELED. The borrower’s home will be used as collateral as well.

But during a Chapter 7 bankruptcy, a borrower can live in the home for free during bankruptcy proceedings so the borrower can look for a new place to live during the proceedings.

To be eligible for Chapter 7 bankruptcy, the borrower (1) must have an average gross income six months prior to the proceedings to be less than the state median income and (2) must not be eligible for the Chapter 13 repayment plan.

This article is written by Timothy McFarlin - an experienced loan modification attorney. Tim has over 10 years of loan modification and bankruptcy experience and has helped many corporations and people with securing a better life. You can visit his website at McFarlin and Geurths LPP Law

Article Source: http://EzineArticles.com/?expert=Timothy_McFarlin

How Bankruptcy Can Help Stop Foreclosure is a post from: Bankruptcy Court Online

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Expect little change from new moratorium

Sean — Mon, 15 Jun 2009 21:16:25 +0000

Lots of calls today from folks wanting the scoop on the "new moratorium" here in California. Seems that some have misinterpreted the new law and believe that it may have a big impact.

The new law adds 90 days to the existing 3 months between the filing of a notice of default and a notice of trustee sale, but exempts servicers (lenders) who put in place a loan modification program.

Expect little change from new moratorium is a post from: Bankruptcy Court Online