Foreclosure Follies

Our law office has worked on 4,000 cases of foreclosures at this point, and we have noticed that the borrowers seem to make the same mistakes when facing foreclosure. Here is our list of the top 10 mistakes that our clients make prior to hiring us:

• Failing to answer the foreclosure complaint within 20 days. If a default against you is entered, the Court considers you to have admitted all well-pled allegations and you could lose your house and be subject to a deficiency judgment in the future.
• Believing everything that the service center representatives tells you on the telephone, especially that you don’t need a lawyer. The “customer service representatives,” many of whom have limited experience, have no duty or obligation to watch out for the homeowner’s best interests. They are out for what’s best for the bank.
• Paying up-front money to loan modification companies. It is illegal for a foreclosure consultant to take money from a person in foreclosure before completing the loan modification.
• Failing to pay the association dues.
• Basing one’s foreclosure strategy around rumors heard from friends. “My friend told me” never takes the place of legal advice from a lawyer who knows what he/she is doing.
• Paying credit cards before the mortgage. The basics – food and shelter – should come first.
• Confusing the banks “collections” department with the “loan modification” department. The most common collection technique here is “pay us xxx for three months and then we will consider you for a modification.” After you pay the money, the “customer service representative” tells you that a modification is not possible. Gotcha!! This is a great collection strategy for the bank, but it does nothing to help you save your home.
• Sending money to the bank based on an oral agreement before you receive the terms of that agreement in writing. We have a rule of thumb that has never failed our clients: “If it’s not in writing, it’s not real.”
• Failing to attend a court hearing. If you don’t show up in court for a summary judgment, judges tend to set the home for sale at the next available sales date. If, however, you appear in court they are pretty liberal about granting extended sales dates and ordering you to mediation.

And the worst mistake of all is:

• Doing nothing!! You cannot put your head in the sand and assume that this problem will go away. It will not.