Happy New Year! I hope 2018 has been off to a great start for you . . . besides the cold weather. A recent foreclosure case that I successfully resolved is the basis for this blog post: obtaining a loan to avoid foreclosure. This option, while not for everyone, can be an effective means of foreclosure defense.
Foreclosure is the process by which a lender can force the sale of a property to recover the borrower’s owed debt for the property. Massachusetts is a non-judicial foreclosure state: a lender does not need to go to court to foreclose, and performs this process through a series of letters and notices. The most common cause for foreclosure is a borrower’s failure to pay their mortgage loan.
Obtaining a Loan to Avoid Foreclosure
Avoiding foreclosure requires a borrower to resolve the underlining money owed on a home. Foreclosure defense is not about getting a free home and the only permanent solution to foreclosure is addressing the owed debt. This can occur through a loan modification, where a lender agrees to restructure a loan to make the payments more affordable for the borrower.
Another option for some borrowers is obtaining a loan to avoid foreclosure. If a borrower can obtain financing from another lender to pay the owed money on the home, this can be an option for saving one’s home. This new financing, of course, would need to be more affordable for the borrower to make this option worthwhile.
This option is not for every borrower facing foreclosure: many borrowers in these predicaments lack the credit to obtain new financing. This is a more realistic option for those facing foreclosure who are not on the underlining loan. This can occur if a homeowner has inherited a home with a delinquent mortgage loan, or have a partner or spouse whose name alone was on the mortgage debt. In such a scenario, the non-borrower may qualify for a loan to avoid foreclosure, whose terms are more favorable than the delinquent debt.
Obtaining the Assistance of a Foreclosure Defense Attorney
If obtaining a loan to avoid foreclosure is an option for you, a foreclosure defense attorney can be helpful for your case. If the underlining mortgage loan is really behind in payments, the owed debt may be much higher than the property value, making it difficult to find new financing. A lawyer may be helpful in negotiating a more reasonable payoff for the homeowner.
I have had success in such cases, where the homeowner has excellent credit and is facing foreclosure through no fault of their own. In the right circumstances, the lender might agree to accept less than what is owed on the property, with the borrower getting an affordable mortgage loan.
A word of caution on this blog post. I have heard from some potential clients who have considered purposely defaulting on their loan, in hopes of getting a better payoff in the end. This is bad, bad advice. Defaulting on a mortgage loan has serious consequences, and there is never a guarantee that a permanent foreclosure defense can be reached for such a case.
If you find yourself facing foreclosure, contact me for a consultation. The advantages of having an experienced attorney on your side can make all of the difference in attempting to save your home.