What To Do When Facing Foreclosure
By Cody McCaughan, Esq.

When faced with a Foreclosure, the worse thing you can do is nothing
Dealing with the prospect of losing your home is terrifying. You are likely way behind on your mortgage payments, cash is tight, you are worried about losing your home, and you are unsure of what to do. But all is not lost. A foreclosure lawsuit can be a unique opportunity to resolve your issues with the bank, get back on your feet, and save your home.
1. Hire a Competent Attorney
After being served, you have 20 days to file a response with the Court. If you choose not to fight the case, the Sheriff may be knocking on your door to kick you out of your home within a couple months. The first thing you should do is hire an attorney. You have a right to represent yourself in Court, however, the process and procedure is extremely complex and when a non-attorney tries to represent themselves, it rarely ends well. As the old saying goes . . . “a lawyer representing himself has a fool for a client.” The cost of retaining a capable foreclosure defense attorney is minimal compared to the amount of money he or she can save you.
2. Buy Time and Consider Your Options
Generally, a competent attorney will, at the very least, get you an additional 4-6 months in your home, and often much longer. This time is crucial because it gives you the opportunity to find a solution to your situation. If you can get back on your feet, your attorney can negotiate with your bank to reinstate the mortgage, and you will go back to making payments as usual.
3. Explore Loan Modification
Loan modification is another option. Banks do not want to foreclose if they can avoid it. Foreclosing on a home is expensive and time consuming, especially when the homeowner is represented by an attorney. This presents an opportunity for you to apply for a loan modification, possibly lowering your payments to something that you can afford. Your attorney can help you get this process started.
4. Consider Selling Your Home
If you are not a viable candidate for a loan modification, an attorney can buy you time to sell your house. A home sold on the open market will sell for far above what the same house will fetch at a foreclosure auction. If you are able to sell your home for more than the amount you owe to your lender, you will likely get to keep the surplus funds. Alternatively, if you owe more to the bank than your home is worth, your attorney may be able to negotiate a short sale whereby the bank agrees to forgive the additional debt you owe in exchange for the proceeds from the sale of the property. This is crucial because if your home is sold at auction, and the sale price is not equal to or greater than the amount owed to the bank, the bank will likely come after you for the remaining debt. Keep in mind that the debt owed to the bank will not only be the principal and interest on the loan, but also attorney’s fees, costs, late fees, and other amounts due to them. With a short sale, you may have to sell your home, but at least that resolve the matter and the bank has no right to come after you for additional funds.
Contact Us
The absolute worst thing you can do after getting served with a foreclosure is to do nothing. We specialize in defending against Foreclosure lawsuits and helping homeowners work out the best solution for themselves and their families. For a no-charge consultation, contact us at (305) 928-4190.