Last week, I got great news that one of my long time clients had obtained a loan modification, permitting him to save his home after eight years of not making payments on the loan, and years of pursuing foreclosure defense. To say this is a success story would be an understatement: this client was in a incredibly tough position when I took his matter on, but now has a real shot of saving his home. Read on about this foreclosure defense success story . . .
A quick background on Massachusetts foreclosure law. Massachusetts is a non-judicial foreclosure state. This means that a lender does not need to go to court to foreclose, but can do so through a series of written notices and a public foreclosure sale. Once completed, a lender obtains title to the subject property. It does not, however, obtain possession. For this, the bank is required to bring an eviction against the homeowners. In such a post-foreclosure eviction case, the homeowner is permitted to challenge the validity of the foreclosure.
In this particular case, I began representing my client following his default in the eviction case brought by the lender. Simply put, this means that the homeowner never came to court on the date of his eviction hearing, allowing the bank to automatically “win” the eviction case.
By the time this client came to me, several weeks had passed since the default. This made the process of lifting the default against my client a particular challenge. Massachusetts evictions are suppose to be “speedy.” Failure to act quickly can cost a party their legal rights. Here, I was able to convince the court to “undo” the default judgment by pointing out an error in one of the initial court documents sent to my client. Reluctantly, the court let my client go forward with defending against the eviction case from the bank.
Following this, I prepared my client’s case based on a defense related to a Federal Housing Administration (“FHA”) loan. An FHA loan generally requires the lender to do a face-to-face meeting prior to foreclosure, and failure to comply with this requirement makes any subsequent foreclosure void. As my client’s lender was unable to prove that it complied with this requirement, my client won his eviction case against the lender.
Loan Modification Application
Winning a post-foreclosure eviction, on its own, will not solve the long-term goal of keeping one’s home. Even if a foreclosure is void, a lender can (and almost always will) foreclose end. To avoid foreclosure, a borrower needs to do something about the outstanding mortgage loan debt, which is most commonly resolved through a loan modification.
After my client’s lender invited him to apply for a loan modification, I helped my client prepare and submit an application. Doing so required several applications to the lender, as the lender denied the first one. While I have written about the horror stories of applying for loan modifications, this process was generally straightforward, with the lender being responsive to my phone calls and submitted documentation.
In the end, all of this work was worth it: my client has qualified for a loan modification, and is on his way to keeping his home for good. I wasn’t the only one surprised by this outcome: the customer service representative I spoke to after getting this decision acknowledge that this outcome, under these circumstances, does not happen very often!
It is important to keep in mind a few things about this case. While my client avoided losing his home, he (appropriately) owes money on his home, and will need to make payments on it for years to come. Foreclosure defense is not about getting a free home, and working out an affordable payment plan is the only real way of avoiding foreclosure long term.
Additionally, although it is possible to save a home after a foreclosure sale, doing so is a much tougher route than avoiding foreclosure in the first place. If you find yourself facing foreclosure, contact a foreclosure defense attorney as soon as possible to learn your options.