“A breakdown in communication”
On May 2, 2011 Chief Justice Jean H. Toal, so ordered a stay on Mortgage Foreclosures as they apply to a homeowners PRIMARY RESIDENCE. This order is the result of what many of us are already well too aware of, NO COMMUNICATION with the Lender.
Many times the different departments within the Lending institutions are unaware that a foreclosure proceeding and a form of Loss Mitigation are going on at the same time. I can’t tell you how many times I have had a Short Sale Approved and the Borrower/Mortgagor is served with “Lis Pendens” paperwork in reference to a Foreclosure proceeding. Lenders could save countless dollars if they could communicate with themselves.
What does this “Order” mean and how does it apply to your situation?
1.This “Order” only applies to a Mortgagor’s Primary Residence*
2.A Foreclosure Intervention Plan must be offered to the Mortgagor
3.Any pending Foreclosures are “stayed” (put on hold NOT dismissed) until the Foreclosure Intervention Plans have been exhausted or offer is declined by Mortgagor
4.All parties must act in good faith to reach an agreement, if not Court can take any action it deems appropriate including assessing attorney fees against the culpable party.
5.If a plan is agreed to it must be in writing and served on all parties. If Borrower complies with agreement, foreclosure must be dismissed within 90 days. If Borrower breaches the agreement, Bank’s attorney files a Notice of Breach and foreclosure continues.
If there is a Pending Foreclosure on your home the Lenders/Bank’s attorney MUST certify the following has occurred in order to proceed with the Foreclosure.
A)All Borrowers are served with notice of right to a Foreclosure Intervention;
B)Bank has received all documents necessary to evaluate the Foreclosure Intervention
C)Borrower has had a “full and fair opportunity” to submit info to Bank
D)If denied, Bank has to notify Borrower and give Borrower 30 days to respond to denial
E)If Borrower fails or refuses to cooperate within 30 days of notice, Bank can proceed to foreclose
Actions filed after 5/9/11: Bank’s attorney must file with Summons & Complaint a notice of right to a Foreclosure Intervention. Before a hearing can be set Bank’s attorney must certify items A-E above. All information has to go through the Bank’s attorney.
As this “certification” process will prove to be very difficult this “Order” is very likely to cause a log jam of Foreclosures. This log jam will force Lenders/Banks to be more accepting of other forms loss mitigation such as Short Sales, Note Modifications, Deed in Lieu, and loan modifications. Since you will still have to have the income to qualify for Loan Mod’s and Note Modifications a Short Sale is typically going to be the better option. The Short Sale process is the best way to prevent further damage to your credit rating, thus assuring a shorter time frame to repair any damage that has occurred.
A short sale in real estate occurs when the outstanding debt (mortgage) against a property is greater than what the property can be sold for. Short Sales are a way for homeowners to avoid bankruptcy or foreclosure proceeding by convincing the bank to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. With a successful short sale you can avoid the public notification of a foreclosure and more importantly keep the foreclosure off of your credit report.
There is absolutely no reason to let your property go to foreclosure. At Coastal REO Solutions one of our asset managers will assist you through the Short Sale process. Through a short sale you still maintain some control and we can negotiate the deficiency (money still owed to Lender after the sale) down and even sometimes away. If you do nothing and let the lender foreclose on your property they will dictate how much money is owed.
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If you are headed towards foreclosure please call or email us!!
We can HELP! 843-839-8046 or info@coastalreosolutions.com.
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