A variety of situations may arise such as an illness, injury, or loss of a job that can lead to financial hardship. This may cause you to default on mortgage payments. When this happens, the mortgage company will begin foreclosure proceedings on the property. Foreclosure is a very stressful, and costly process. A real estate attorney can form a foreclosure defense strategy to avoid foreclosure proceedings before they start or to stall and stop them once they’ve been put into action. Foreclosure defense is a relatively new technique that is being employed more frequently now that foreclosures are on the rise.
Making modifications to your mortgage is the easiest way to avoid a foreclosure. This involves working with lenders to renegotiate the terms of the mortgage to make the payments more affordable for you. A mortgage modification can also include reducing or changing interest rates, eliminating any late fees incurred through non-payment, and reducing the loan’s principal. These steps give you more opportunities to stall or stop mortgage proceedings against you. A real estate attorney can help you with every step of this process because they have experience in dealing with mortgage companies and lenders.
Chain Of Title
An attorney can come up with a variety of foreclosure defense strategies to help you keep your home. One of these approaches involves checking the chain of title to make sure that there is a clear record of ownership from the moment you signed the title to the present. Lapses in the chain of title can be common, causing issues that make it invalid. Banks utilize the services of a privately owned company that tracks the nation’s mortgages, called Mortgage Electronic Registration System (MERS). If MERS detects that a mortgage is approaching, it will designate a party to begin foreclosure proceedings based on the registered owner of the mortgage. This can mean the perfection of the chain of title could be invalid due to the inability to independently verify it.
A promissory note must show a clear chain of title. If any flaws in the chain of title can be identified and proven, this can help establish a valid defense against foreclosure. If a promissory note has been securitized or sold to a different entity, then the promissory and deed are owned by two different parties. This is known as bifurcation. The US Supreme Court has ruled that a promissory note and a deed cannot be separated. If the mortgage is bifurcated it can invalidate the deed of trust, making it unenforceable. An attorney can aid you with services such as obtaining a securitization audit and inspecting the perfection of the chain of title for defects.
Bankruptcy comes in many forms and could provide a line of defense against foreclosure. For instance, a Chapter 7 filing allows you to declare your home an unsecured asset. This means the burden of proof is now on the lender and they must prove a sound chain of assignment. A Chapter 13 bankruptcy permits you to file what’s known as an Adversary Proceeding. This is a process where you file a lawsuit against your lender to force them to demonstrate legal evidence of claim. An attorney can guide you through every step of the various bankruptcy process to ensure that you are aware of all of your options.