Barakat, Jacobs & Associates understands there are many dynamics still changing during this foreclosure crisis. 

• Banks are constantly revising policies and procedures. 
• Bankruptcy Reform may soon threaten Banks who refuse to reduce principal owed or extend payment schedules
• President Obama and the Government Bailout will invest substantial funds to help the homeowner

There will be no help for homeowners that lost their homes to foreclosure. While a borrower that does nothing should expect the worst case scenario, an effective foreclosure defense can create the best case scenario, 

Here are just a few:

If you want to keep your property

• Fight the Foreclosure
  • The Courts are overwhelmed with foreclosures
  • Many bank lawyers are underpaid and overworked
  • Many banks have lost important paperwork
  • You can continue to live in or rent the property without making payments to the bank
• Loan Modification
• Banks that fear a difficult foreclosure may agree to many changes to rewrite your loan, including:
  • Reducing the principal amount owed on the loan 
  • Converting an ARM to a Fixed-rate mortgage 
  • Steep Reductions in the interest rate
  • Extended payments schedules
  • Reduced monthly payments
• Refinance
  • For every need, there is a market.  Aggressive lenders and foreclosure relief laws could jumpstart funding to rescue people in foreclosure. 
  • borrower must be able to make regular monthly payments
  • negotiate for reduction in principal amount owed
  • Borrower must not have lost home to foreclosure
    ? New loan at affordable terms
• Forbearance
  • Many lenders will agree to delay foreclosure proceedings
  • Some will agree to cancel sale dates
  • This allows you more time to decide on best exit strategy

If you don’t want to keep your property

If a borrower doesn’t pay their mortgage the Bank can:

•  issue negative credit reports,
•  take back the home, and
•  collect a deficiency judgment

A formidable foreclosure defense is powerful leverage for a borrower to negotiate from a position of strength.  It may mean the difference in avoiding the full economic hardship of a foreclosure.

• Short sale
  • A bank can agree to accept less than the total amount owed on the loan to release the mortgage
  • Borrower needs to find an investor or buyer willing to make reasonable offer to the bank
  • Depending on the lender some borrowers could have their debt forgiven if the short sale closes
  • Beware of Banks that demand a new promissory note or a deficiency judgment
• Deed-In-Lieu
  • In a deed-in-lieu scenario, the bank avoids litigation and the borrower agrees to sign over title to the property. 
  • Some Lenders will waive their right to a deficiency judgment

The Mortgage Forgiveness Debt Relief Act of 2007

•  established a three year window
•  debt relief not taxable under certain circumstances
•  Please consult your accountant or tax advisor for details

Call Barakat, Jacobs & Associates, P.L. for a consultation or send us an e-mail. We can evaluate your case today.