One of the biggest mistakes you can make in loan mitigation is ignoring the rules. Although your foreclosure attorney does the negotiating, it helps a great deal if you do your homework and arm yourself with the right information. After all, you are dealing with lenders and you still have to play by their rules. Here’s a list of loan mitigation “do’s and don’ts” to help you avoid common pitfalls and best navigate the mortgage mitigation process.
Know your rights:
More than 80% of mortgage contracts violate one or more lending laws (RESPA, TILA, etc.) and most of them go unnoticed. These violations can be your biggest weapon in the mortgage mitigation process. They can give your foreclosure attorney the leverage needed to stop the foreclosure process with a loan modification or foreclosure alternative. Your foreclosure attorney can defend your rights and get the best results possible.
Don’t wait too long:
The foreclosure process is designed so that you have time to get back on your feet and save your home. But that doesn’t mean it’s safe to procrastinate. The longer you wait, the harder it becomes for a foreclosure attorney to assist you with stopping the foreclosure process and resolving your mortgage. With each day, a delinquency becomes more costly to a lender and their willingness to stop the foreclosure process and accept a loan modification or foreclosure alternative diminishes. The moment you foresee difficulties with your mortgage, call a foreclosure attorney, find out your options, and get the process started.
Work with your foreclosure attorney:
Your mortgage mitigation outcome does not rest in the hands of your lender or your loan modification attorney. It is imperative that you do your part and work closely with your foreclosure lawyer. Make sure to submit your paperwork on time, answer questions honestly, and give your foreclosure attorney a clear picture of your financial situation. Many programs have strict deadlines for document submission and missing a deadline can disqualify you from that program.
Many people think that filing for bankruptcy can help them stop a foreclosure. Well it can, but only temporarily. Data from the American Bar Association shows that the vast majority of the people who file bankruptcy end up losing their homes anyway, leaving them with a foreclosure AND a bankruptcy on their records. In some cases, bankruptcy is still a viable option and a useful tool to buy enough time to obtain a loan modification, but don’t make any decisions without first speaking with a foreclosure attorney. Most reputable foreclosure attorneys offer free initial consultations.
Have a backup plan:
Not all people will qualify for a loan modification. Maybe you’ve fallen too far behind, your lender may simply be difficult to work with, or maybe you don’t need it after all. In any case, it is always wise to have a backup plan. Your foreclosure attorney can help you find the best solution, and these days there are many attractive foreclosure alternative programs, such as short sales, deeds-in-lieu and cash for keys. A good foreclosure attorney knows how to keep these options open for you through the negotiation process. Foreclosure alternatives control the damage to your credit by stopping the foreclosure process and creating a smooth transition. You may also be able to prevent a “deficiency judgment” against you that sometimes results from a foreclosure.