Receiving a foreclosure notice can be a startling wake up call. It is a stark realization that your lender can and will sell your home if you don’t get current on your mortgage immediately. You have a short amount of time to act. If you do nothing, you will lose your home. What can you do? You have two options. You can either get current before your home is sold at foreclosure, or you can utilize the power federal bankruptcy remedy of Chapter 13. If you are facing a foreclosure, the Chapter 13 bankruptcy process allows you to bring your loan current and save your home. This assumes that you qualify for Chapter 13 relief. If you qualify, you can stop a foreclosure even if your mortgage lender has repeatedly denied you a loan modification and refuses to work with you to modify or restructure your loan. Chapter 13 is your federal right. It doesn’t matter if your lender refuses to work with you. The bankruptcy court will force your lender to let you get current over a 3-5 year repayment plan period. As long as your filing is done properly by an experienced bankruptcy lawyer, your lender will have no say in the matter and you will keep your home provided you make your Chapter 13 plan payments. The foreclosure sale will be avoided regardless of whether your lender desires to work with you. What is more, if you have a second mortgage or home equity loan, under appropriate circumstances a foreclosure attorney can permanently eliminate the lien encumbering your property. Our experienced foreclosure lawyer will help you stop foreclosure San Diego and keep your valuable financial investment that you have worked so hard to achieve and maintain.
When you fall behind on your mortgage payments, your lender will begin the foreclosure process. It can all happen very fast. In San Diego, lenders will begin legal proceedings after you have missed 2-3 payments. Your lender then files a Notice of Default against your property. From the moment the Notice of Default is filed, the clock starts ticking: You have 90 days to bring your loan payments current. Otherwise, your lender will file a Notice of Sale and set a foreclosure sale date for an auction sale of your property, where it will be sold to the highest bidder. If you are unable to bring your loan current, a Chapter 13 bankruptcy filing can help you avoid foreclosure. How the process helps is simple: your filing will immediately stop foreclosure sale proceedings and you will then be permitted to repay your missed payments over time, thereby bringing your mortgage current. You will need a foreclosure lawyer who specializes in filing bankruptcy to save homes in order to successfully avail yourself of this legal process and be assured that you will keep your property.
If you have received a Notice of Default, then you need to immediately seek the assistance of an experienced foreclosure lawyer. After receiving the Notice of Default, time is the biggest enemy. Statistically speaking, the more time that goes by, the greater the chance of losing your property. Talk to a foreclosure attorney and discuss your options for proposing a viable repayment plan that the Court will be able to confirm. If you qualify to file bankruptcy and can successfully confirm a repayment plan, then you will be able to save your home and will no longer be facing an auction sale and loss of something you have worked so hard to attain. Even if you have not received a default notice, time is still the biggest enemy. The greater the number of missed payments you have, the more difficult it will be for your attorney to propose a plan that the Court will confirm.
In order to stop sale proceedings through the bankruptcy process you must present a repayment plan (to bring your mortgage loan current) that the court approves. It is true that upon the filing of your case, an automatic bankruptcy stay goes into effect that immediately halts the foreclosure sale. But that is only temporary. To permanently stop the foreclosure sale, you must propose a repayment plan that repays your missed payments and any unpaid property taxes over a 3-5 year period. Because your plan will ultimately result in bringing your home loan current, your lender is being paid in full and therefore is prohibited from being able to foreclosure on your home. You will need a San Diego foreclosure lawyer who is a Chapter 13 specialist because bankruptcy repayment plans have a high rate of dismissal when filed by novice practitioners. Only a lawyer who is a specialist will be able to consistently obtain court approval of a repayment plan and ensure that when you file bankruptcy to avoid foreclosure the proceedings will be handled in the smoothest manner possible to ensure that you save your home.
Depending on your circumstances, you and your attorney may elect not to stop foreclosure of property and let it go to sale, or a sale may have occurred before you met with your foreclosure attorney. If a sale has occurred, you generally cannot get the property back, unless you can show that the sale was wrongful, which is a very difficult standard to meet. Even if you have accepted that you have lost your home, your liability on the mortgage loan may not be over. Depending upon the nature and amount of liens against the property, the lender may be able to sue you for the deficiency amount. Also, if the lender writes off the balance of the debt you owed on the loan, you could incur after foreclosure tax liability, for example, for a home equity loan that was wiped out by the foreclosure. A bankruptcy can eliminate this type of tax liability.
As lenders across the country attempt to clean up their portfolios in order to become more attractive to investors they must increase foreclosure rates on defaulted loans. Federal bailout funds temporarily halted foreclosure rates, however that did not last long. San Diego homeowners are disproportionately affected for two reasons. First, the housing prices are significantly higher than the national average and therefore the loans are higher and pose greater risk to lenders and investors. A defaulted loan in San Diego will therefore pose greater risk and overall exposure. Second, the San Diego local housing market has gone through exceptionally large rises and falls and continues to do so, creating more volatility. When housing prices are up they are up very high and people take out large loans with larger payments that make it more likely they will default on the loans. If you are behind on your mortgage payments and have tried to modify your loan without success, then you know first hand that lenders simply are not modifying most people’s loans. The percentage of homeowners that receive a loan modification is very small. Most people who are behind on their home loan payments and are in need of foreclosure help will file bankruptcy in order to save their home.
The Chapter 13 process offers a unique legal remedy called lien stripping. Through the lien stripping process, if the balance owed on your 1st position mortgage loan exceeds the value of your property, then you may be able to eliminate a 2nd mortgage or home equity loan that encumbers your home. There are other technical rules that apply to the lienstripping process that your lawyer will need to discuss in order to determine whether the remedy is available in your situation.
Contact Bankruptcy Legal Center to set up your free consultation with a San Diego bankruptcy attorney specializing in home foreclosure matters. Learn how you can permanently avoid foreclosure and save your home from a threatened auction sale. Call 619-501-9711.