For many people, the home where they live is their most valuable asset. They spend three decades paying off their mortgages and accumulating equity. They may also perform labor at the property to improve its value.
Those investments could be at risk if the mortgage lender who financed the purchase forecloses on the property. People who have missed multiple awards are potentially vulnerable to foreclosure. Homeowners who have fallen behind by more than one payment or receive warning letters from their lenders may need to take steps to prevent imminent foreclosure. The three strategies below are among the most common and successful responses to foreclosure attempts.
Identifying technical errors
The law imposes numerous restrictions on foreclosure for the protection of homeowners. If lenders make a mistake when recording payments or communicating with homeowners, they may have to restart the foreclosure process in some cases. Evaluating how the lender has managed the process thus far can help people determine if the homeowner might have grounds for a defense based on a technical violation of the appropriate legal procedure.
Seeking a mortgage modification
The terms of a mortgage might make full repayment more of a challenge than people anticipate when they sign the note. Factors ranging from balloon payments to variable interest rates can complicate the mortgage payment process. Borrowers may be able to cooperate with lenders to make adjustments to their mortgage terms. They could increase the duration of the mortgage, lock in a lower interest rate or move their missed payments to the end of the repayment. Mortgage modifications make it possible for people to more effectively budget and make their minimum monthly payments.
Highlighting predatory lending practices
In some cases, raising questions about the conduct of the mortgage lender could potentially provide a basis for a foreclosure defense. Predatory lending practices and other violations of federal statutes can complicate the foreclosure process. In some cases, the mistakes and misconduct of a mortgage company may impact its legal standing to take action against the property owner. Other times, credible claims of misconduct could inspire the mortgage lender to be more cooperative with a borrower who has fallen behind.
There could be other options available as well, depending on the circumstances. Reviewing mortgage documents and payment history with a skilled legal team can help homeowners look into foreclosure defense strategies. Support from a professional may make it easier for those concerned about foreclosure to protect their most valuable resources.