“I know I’m way behind on my mortgage payments. Now I’m facing foreclosure. So why should I fight the inevitable?”
Mortgage foreclosure is not a foregone conclusion. The process has evolved into a minefield for the mortgage holder seeking to take your home away. While not impossible, the process is regulated by state and federal law that the savvy homeowner can delay–or even avert–the foreclosure by adhering to a few basic principles.
First of all, keep your closing package in a safe and secure place. “But it’s been twenty years since the closing. I can’t remember where I put that thing.” Don’t worry. If you can’t find it, your attorney can get a copy from the lender. Or, the attorney who closed your loan may have a copy.
Second, keep a copy of all correspondence that you have received pertaining to the mortgage or home loan. Offers to refinance may or may not fall into this category, depending on whether you accept the offer. You can decide if it’s relevant later. If you do accept the offer, you may need the offer to refinance to show fraud, for instance. So the rule of thumb is to keep all correspondence.
Third, do not ignore collection efforts by the lender. Return calls and respond to letters by calling the numbers indicated. Lenders are required to give you a loan modification to make the loan more affordable and help you keep your home. But you have to respond to their offer.
Fourth, make a concerted effort to keep paying on the mortgage, even if it’s only a fraction of the normal monthly mortgage payment. If the lender rejects the payment, deposit the payment into a separate bank account. If you have retained an attorney, he can hold these payments in his trust account. The intent is to show good faith when the showdown comes. Pay what you can. And do it monthly.
Fifth, keep copies of any documents send to the lender as part of the mortgage modification process! Rest assured, the mortgage lender will lose them. In South Carolina, our Supreme Court has made it clear that if you’re lender participates in the mortgage modification process (HAMP, HAFA, or otherwise) you must be offered the ability at an attempted modification. So if you weren’t offered any meaningful attempt at modification, you need to be able to prove it!
Finally, get an attorney to represent you. He may be able to find cracks in the foreclosure process that can be used to keep you in your home. At the very lease, he certainly can buy you more time to make plans for the event that you should have to move out.