FAQ

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  • What if I just want to get rid of the property?
    A deed in lieu of foreclosure makes sense if an investor (or homeowner) is upside down and just wants to turn the property over to the bank, but is concerned about the bank getting a deficiency judgment. A short sale is a good alternative if you can get a reasonable offer and the bank agrees to it in settlement of the mortgage obligation. Don’t listen to the bank that tells you it will not accept a “deed in lieu.” Our firm can help you achieve the same result by defending the foreclosure. The bank’s lawyer will usually accept, in settlement of a lawsuit, what the bank cannot.
  • Why should I defend the foreclosure rather than simply walk away or send the keys to the bank?
    If you just allow the bank to go ahead with the foreclosure by default, it may then proceed to get a personal judgment for the deficiency or shortage if the property is upside down. This personal judgment is valid for up to twenty years and may attach to your personal assets, including real estate, personal property or even result in the garnishment of your wages. Unless you have no assets (and never expect to acquire any), it does not make sense to just “shoot craps” and hope for the best.
  • Can the lender go after my other assets?
    If the lender gets a deficiency judgment after the foreclosure, it may be able to seek other non-homesteaded assets to satisfy the judgment. The lender cannot go after other assets without first getting a judgment. This is a risk when the owner simply defaults in the foreclosure action, without hiring an attorney to plan for asset protection, and is unaware of any proceedings that may follow the foreclosure and sale of the property.
  • What if I want to stay in the house?
    If you wish to remain in the home (or keep it as rental property) and cannot afford the payments, the best alternative is to seek a loan modification. Although the owner can do this on his own, working with the loss mitigation division of the bank requires a great deal of patience, to say the least. We are often in a better position to negotiate with the bank and can usually do so from a position of strength when in the context of a foreclosure defense or a court ordered mediation.
  • Can I qualify for a loan modification or should I not even bother?
    This depends upon your income and financial position. Most importantly, do not even bother with a loan modification unless you wish to keep the property and doing so makes good financial sense. Don’t listen to the advice being offered by many loan modification companies whose sole interest is to earn a fee. If the property is upside down or a reduction in your payments would not be a long-term solution, don’t bother! In that case, just get rid of the property!
  • Should I try to do a short sale?
    A short sale is a good alternative if you decide to unload the property. But it requires receiving an offer and then convincing the bank’s loss mitigation department to accept it. Most importantly, make sure the bank agrees to a release of any further liability and to NOT pursue a deficiency judgment – otherwise you have accomplished nothing! Unfortunately, we find that most short sales benefit the realtor more than the owner.
  • How do I get the lender to stop calling my home at all hours?
    Simple. We send a “cease and desist” letter demanding that the bank make no further collection calls. If it does so, it is a violation of federal law and we can seek a penalty and sue for damages.
  • Are you just delaying the foreclosure?
    No. Our strategy is to actively negotiate or fight – not delay. Many of the foreclosure complaints that we see are technically defective from a “pleading” perspective. These technical issues can almost always be fixed by the lender attorney and thus bringing them to the court’s attention usually just delays the eventual finality of the foreclosure. It is like throwing peanut butter in the gears of the lawsuit – it will slow it down but not stop it. Slowing down a case can be good if there is a viable reason to slow it down – like working on a loan modification or short sale or negotiating with the lender to return the deed. But many homeowners just want to get to live in the house for free as long as possible, and some foreclosure defense firms are happy to oblige – for a fee – usually a monthly fee.
  • Will I receive a 1099 and will I have to pay income taxes?
    The lender may issue a 1099 following a short sale or foreclosure, based upon the principles of foregiveness of debt. There are exceptions to including this as income if it is your primary residence or in the event of insolvency (in which case Form 982 must be furnished.) We are also willing to issue a tax opinion letter opining that the transaction is not taxable in certain situations. This is handled on a case by case basis and is dependent upon your facts.