I’m Behind on Mortgage Payments and I Don’t Want to File Bankruptcy. What Can I Do to Protect My Home?

Overall, the Sunshine State has one of the highest foreclosure rates in the nation. Hernando, Citrus, Wakulla, Osceola, and Charlotte Counties lead the way.

Failure to timely make mortgage payments is, by far, the leading cause of home foreclosure in Florida. Legally, most banks can begin foreclosure proceedings after a single missed payment. Failure to pay property taxes on inherited property could also cause foreclosure. Some people don’t understand that even if they don’t make mortgage payments, they must still pay property taxes.

Bankruptcy’s Automatic Stay is the best way to stop foreclosure, because it’s, well, automatic. However, if bankruptcy is not an option, for whatever reason, a St. Petersburg asset protection lawyer has other legal alternatives.

Short Sale

Quite simply, the owner sells the home for less than the UPB (unpaid principal balance) on the note, and the bank eats the difference.

If Sam owes $200,000 and he sells his home for $180,000, he’s not liable for the remaining $20,000, if the bank approves the short sale. Banks approve or nix short sales based on a number of factors, mostly the market conditions at the time.

A St. Petersburg asset protection lawyer is a good negotiator as well as a good litigator. So, a lawyer takes care of short sale negotiation duties, increasing the chance that the bank will approve the short sale.

In these situations, lawyers often use the bankruptcy bluff. They imply that if the bank doesn’t make a deal, the owner will file bankruptcy, leaving the lender with next to nothing. The lender doesn’t know that the bankruptcy bluff is an empty threat.

Deed in Lieu of Foreclosure

DILF is basically voluntary foreclosure. The owner agrees to transfer the deed to the lender, saving the lender the bother and expense of going through the legal process to foreclose on the loan.

Like a short sale, a DILF doesn’t look as bad as a foreclosure on a credit report. A DILF or short sale always means the borrower took some action. A foreclosure usually means the borrower simply quit.

Temporary Restraining Order

Florida is a judicial foreclosure state. Banks, counties, and all other entities must go to court to obtain foreclosure orders. This process is tailor made for a TRO application. Usually, this application is based on a violation of the 2012 National Mortgage Settlement, which was reached in the wake of the 2008 financial crisis. Common NMS violations include:

• Dual Tracking: Mortgage banks commonly work what they see as a problem from both ends. They simultaneously offer relief to distressed homeowners, such as a loan modification, while they begin foreclosure procedures. The NMS put an end to this practice, but it continues.
• Failing to Properly Credit Payments: Many mortgage notes change hands multiple times, as banks buy and sell them. Homeowner payments sometimes get lost in the shuffle or delayed in the process. Other times, banks don’t properly apply payments to principal balance reduction and prepaid interest.
• Robo-Signing: This violation made the most headlines during the mortgage crisis. Many affiants claimed they reviewed hundreds or thousands of documents, but in reality, they simply rubber-stamped them. Filing documents out of order is a related violation.

A violation of the statute of limitations, which is usually four years, is an even better argument to include in a TRO.

Foreclosing entities often send acceleration notices before they begin foreclosure proceedings, giving the owner a chance to catch up on payments. Many banks don’t formally reinstate these loans. If they fail to do so and the four years elapse, the bank loses the right to foreclose on the note.

Work with a Thorough Pinellas County Lawyer

If a bank or county threatens foreclosure, several options are available. For a confidential consultation with an experienced asset protection lawyer in St. Petersburg, contact Drude Tomori Law. The sooner you reach out to us, the sooner we start working for you.

Source:

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