Having problems with an upside down mortgage? All is not lost.
Believe it or not but miracles still do happen. Imagine how this New York couple must have felt when a reputable bank instituted foreclosure proceedings against them. How can they win, one might ask? They must have prayed for a miracle. Lo and behold! A miracle did occur. Thanks to a sympathetic judge in New York. Yes, there are still kind people out there who protect the financially challenged and not just the financially gifted. A big question mark though on the use of the word “gifted.” This judge not only canceled the indebtedness but discharged the mortgage as well. It’s almost as if the couple now has a clean bill of financial health and need not worry any further about settling what was once an apparently insurmountable obligation secured by their home.
So how did this couple ever merit this blessing and the heart of the judge? Here are some tips that may be useful to those similarly situated.
Can You Stop Foreclosure & Get Your Debt Canceled?
As the case we discussed has illustrated, it is possible to fight foreclosure and win, even though it may be an uphill battle. Of course, each case is different.
1. First, upon the filing of a lawsuit to foreclose on your property, you must reasonably request the court for a settlement conference. This would show good faith on your part that you intend to settle your obligation and not escape liability.
2. Second, your proposal for settlement must be reasonable. Don’t ask for the moon by demanding a waiver of the indebtedness. No, this just won’t happen. Not even in the movies. Neither should you tinker with the interest (ie. ask for your interest charges to be modified). That’s how banks make money so don’t mess with that. A good start for a reasonable request would be a modification of terms. In other words, this is like admitting that you owe so much but you just need additional time to pay it off. One tried and tested method is to accompany your requested modification with a substantial payment. As the saying goes: “Show me the money!” Banks thrive on money. They need to see the money.
3. The last tip is often the most overlooked and neglected. You need to engage the services of a lawyer to assist you in your requested loan modification. True, lawyers are costly but they cost money because they can save you money or give you the much needed breathing space to settle your debts. Bear in mind that the people you will be dealing with have their own lawyers who themselves prepared the loan and mortgage documents. You need a lawyer to level the playing field.
In the particular foreclosure case in New York, the judge actually considered the social ills that might result if the home were to be foreclosed. Would the foreclosure be “repugnant to the public interest when seen from the point of view of public morality?” Heavy stuff, one might think. The court hastened to add that foreclosed properties are oftentimes boarded up, which in turn leads to vagrancy, dumping, vandalism, litter and the eventual decline of property values in the area.
Is there a glimmer of hope for those facing foreclosure of their homes? The bank referred to has filed an appeal to a higher court. Prudence dictates that we await the decision of the appeals court.
(Disclaimer: This is not intended to be legal advice but purely for informational purposes. The services of a lawyer have to be engaged if legal advice and representation are sought.)
This guest post was written by my dear brother-in-law, Earl Fischer, who is one passionate lawyer.