Foreclosure Law in Practice – What it Means for You

In theory, foreclosure sounds like a complete mismatch between a homeowner and an aggressive bank. But in reality, many homeowners are successfully defending their homes against their mortgage lenders.

In order to learn more about foreclosure law in practice, and what it means for you, listed below are a few of the most important foreclosure laws for residents of Ohio.

Truth in Lending Act. This federal law, commonly known as TILA, requires mortgage lenders to fully disclose the terms and conditions of home loans. In the past, lenders often clouded the actual interest rate homeowners were paying, which led to the creation of a law that monitored unscrupulous banks. If your mortgage lender violates TILA, it might provide a defense for your foreclosure case.

Real Estate Settlement and Procedures Act. Another federal law, RESPA, provides further protection for homeowners by requiring mortgage servicers to allow consumers full access to the actual costs of a mortgage settlement. Enforced by the Consumer Protection Financial Bureau, RESPA is another powerful tool to protect Ohio residents against the actions of aggressive lenders.

These three bodies of law provide a tremendous amount of protection for homeowners, but residents of Ohio will need to use other laws to their advantage if they want to fight their foreclosure case successfully.

But foreclosure cases aren’t as simple as reading a few laws. In Ohio, for example, foreclosures take place through the judicial process, which means these cases are subject to all the rules inherent to the Ohio court process.

So, in practice, Ohio foreclosure law is supplemented by a vast body of other procedural rules. What does this mean for you? It means that you should give a call to an Ohio foreclosure attorney who is familiar with the rules and customs of local courts.

Posted in Uncategorized

Bankruptcy Isn’t Always The Best Option for Those Facing Foreclosure

A recent law review article Saving Homes? Bankruptcies and Loan Modifications in the Foreclosure Crisis provides evidence that Bankruptcy may not be the best route for homeowners facing imminent foreclosure, especially in Judicial Foreclosure states like Oregon. Raising defenses in state court foreclosure proceedings and using that legal leverage to negotiate a smart settlement agreement for homeowners remains the best chance for homeowners to save their homes. Many bankruptcy lawyers try to push struggling homeowners into Bankruptcy too soon.  While Bankruptcy remains a valuable tool for lawyers representing homeowners facing foreclosure, its best value may very well be after state court proceedings are close to a finish.

Marc Dann

mdann@dannlaw.com

216-373-0539

Tagged with: , ,
Posted in Uncategorized

Distressed Homeowners Now Have Legal Protection Against Lenders Who Fail to Assist With Loan Modifications, Short Sales, Forbearance Agreements or other Remedies.

             Homeowners who have been abused or ignored in the process of seeking a Loan Modification, Short Sale or other loss mitigation remedy now have the right to take their loan servicer to court under regulations that took effect on January 10, 2014.  Regulations X and Z promulgated by the new Consumer Finance Protection Bureau, created under the Dodd-Frank Act in 2010 establishes standards by which requires lenders to review home owners facing financial difficulty in good faith for modifications of their home loans BEFORE they are allowed to file for foreclosure.

 

            Anyone who has suffered temporary unemployment, or a medical catastrophe or other financial problem and has sought temporary or permanent relief from their home lender can tell you horror stories about being ignored or abused by their loan servicer like being asked for the same documents and forms dozens of times or being forced to deal with a different person every time they call.

 

            The new rules create a private right of action when a lender fails to invite distressed homeowners into the process of being reviewed for a modification of their loan or fails to review documents and forms that are submitted by homeowners in an timely fashion.  It also requires that all loan servicers establish a single point of contact for distressed homeowners and creates a right to appeal an unfavorable decision, to a separate team of underwriters when a homeowner is turned down for a loan modification or a short sale.

 

            If the loan servicer fails to approach a loan modification of short sale in good faith, then a homeowner has a right to sue to recover actual damages, statutory penalties and their attorney’s fees.

 

            The rules also require loan servicers, most of whom do not own the loans they service to share information with homeowners and their lawyers about who the actual owner of their loan is, information about how payments are (or are not being applied), copies of inspection reports and appraisals of a property that will give a homeowner and their lawyers much more of the information necessary.

 

            And, if they don’t give a homeowner the information requested, once again the new rules allow that homeowner the right to sue the loan servicer to force them to do so.

 

           This information will allow lawyers for distressed homeowners to negotiate much better solutions.

 

            The rules also prohibit a foreclosure filing until a homeowner is more than 120 days in default and prevents “dual tracking” a practice by which lenders promise to consider a loan modification while moving forward to takes someone’s home by foreclosure at the same time.  This will allow much more time before a foreclosure is filed to work out a solution.

 

            What this means for homeowners who are in financial distress or who anticipate that they might be is that they should retain a lawyer as soon as possible in the process.

 

            While the new regulations are extremely consumer friendly, they are also fairly complicated and require that the requests for modification or information being put forward in a highly technical and specific way to make sure that one’s right to sue and seek injunctions are protected.

 

            Because of the new protections a homeowner facing a possible foreclosure should retain a lawyer who understands the new regulations as early as possible in the process.

 

            Dan Solar a colleague from the Dann Law Firm and I attended a seminar this weekend that brought together some of the best minds in the country on these new regulations including Max Gardner, who is the nation’s preeminent expert in defending homeowners facing foreclosure, a lawyer from the Consumer Finance Protection Bureau, a former General Counsel for a Large Loan Servicer, and Jay Patterson who is a recognized expert in abuses in the loan servicing industry. 

 

            We have returned enthusiastic about putting these new rules to work to protect homeowners and consumers in Ohio.

 

Marc Dann

mdann@dannlaw.com

216-373-0539

Tagged with: , , , ,
Posted in Uncategorized

Foreclosure Lawyers Can Help You Keep Your Home

Foreclosure mills, the law firms hired to fight foreclosure cases for mortgage lenders, are typically staffed with people who are highly skilled at taking homes. In response, many homeowners choose to seek the aid of their own foreclosure attorney.

By seeking help from a foreclosure attorney, you’ll have more ammunition when you seek to protect your home in court. Here a few of the various ways in which Ohio foreclosure lawyers can help you keep your home:

Fight the foreclosure case. This is the most time-consuming, but potentially most powerful course of action. At worst, your foreclosure lawyer can help you keep your home for a longer period of time as they fight the action in court. At best, your foreclosure lawyer may be able to win the case outright.  

Win the foreclosure case outright. If your foreclosure attorney is able to completely defeat the mortgage lender’s claim, you may ultimately prevail over the bank. If, for example, the lender secured the mortgage in a fraudulent manner, or has taken other actions that defeat its claim to the property, you may be able to walk away from the case with a clear title and keep your home.

Secure a government-sponsored loan modification. Of course, fighting the foreclosure in court isn’t for everyone. If you’ve recently fallen on hard financial times, but you want to keep your home, you may be eligible to apply for the Home Affordable Mortgage Program (HAMP) and the Restoring Stability Program. These programs have allowed many Ohio residents to keep their homes and pay much lower interest rates.

Negotiate directly with the lender. Foreclosure lawyers can help you keep your home by negotiating directly with your mortgage lender. Fighting a foreclosure defense attorney can be expensive for banks; so many lenders instead explore the possibility of refinancing your home loan. If you and the bank agree on a modified loan, it may choose to dismiss the foreclosure case.  

Conducting a short sale. If it appears that you won’t be able to prevent foreclosure, and you don’t want to refinance your loan, you may opt to simply sell the house and give the proceeds to your lender. This process, known as a short sale, requires the approval of your bank, but it can be a cost-effective way to shed an unwanted property. 

Posted in Uncategorized

How Does Foreclosure Work: Q and A

In Ohio, mortgage lenders must follow the rules of the judicial foreclosure process, which simply means that every foreclosure has to go through the county court system. Within this system, though, homeowners have many questions about how foreclosure works. Listed below is a Q and A on the complicated topic:

What does the bank have to do to foreclose? Before filing a foreclosure complaint, your bank has to first jump through several legal hoops. First, it must send you a notice of default telling you that you have missed a mortgage payment. Next, it must give you time to cure the default. If you don’t cure the default, the bank may then file a foreclosure complaint. This, however, simply starts what is typically a long court process.

What do I do after I receive notice of a foreclosure complaint? After you receive notice that your lender is attempting to file for foreclosure in an Ohio court, you have 28 days to file a responsive pleading. This may take the form of an answer, a series of affirmative defenses, or a motion to dismiss. An Ohio foreclosure attorney can help explain how this part of the foreclosure process works.

Is it possible to win a foreclosure case? Yes, there are several ways in which you might win the case. First, the bank may simply drop the case. This often occurs when homeowners refinance their loans. If the bank doesn’t drop the case, you may instead win on the merits. In order to foreclose, your lender must prove it is the holder of the mortgage or note. If it fails to show this, you may be able to defeat the lender’s claim.

How long can I keep my house? This all depends on your unique situation, but in the worst case scenario, it may take up to a year for your mortgage lender to foreclose. More typically, the average foreclosure case takes months to come to completion. Which is to say that you’ll likely be able to stay in your home well after the foreclosure complaint is filed.

What are the options to avoid foreclosure? Instead of fighting the foreclosure, you could seek a short sale (where you sell your house and your lender receives the proceeds), or a deed in lieu of foreclosure (where you simply hand the deed over to your bank in exchange for the forgiveness of your debt). The options, however, come with some risks, and it’s best to first discuss them with a foreclosure attorney to conduct a further Q and A on how foreclosure works.

Tagged with: ,
Posted in Uncategorized

How to Stop Foreclosure in Ohio

It’s a difficult time to own a home in Ohio. While there are court rulings that protect homeowners, simply showing up in court isn’t enough to win your foreclosure case.

The key to saving your home from the grasp of aggressive lenders is to act swiftly, strategically and confidently. Listed below are a few tips on how to stop foreclosure in Ohio:

Promptly file an answer to the foreclosure complaint. When you receive the summons, the official notice that your mortgage lender is seeking a foreclosure, you have 28 days to file a response. This response doesn’t have to be perfect, since Ohio courts allow you to amend your answer, but if you fail to respond, your lender could win the case by default.

Check your eligibility for the Home Affordable Mortgage Program and Restoring Stability. These programs allow homeowners who are struggling to make their mortgage payments to negotiate a more appropriate home loan with their lender. The Home Affordable Mortgage Program is a federally subsidized program that has helped many Ohio residents secure home loans with better interest rates in recent years.

Contact an Ohio foreclosure defense attorney. If you would like the assistance of an attorney with local foreclosure attorney, you might want to contact a foreclosure lawyer. He or she can walk you through the foreclosure defense process.

Challenge securitized notes. In recent years, mortgage lenders have shuffled new mortgages off to companies who gather thousands of home loans into a single investment vehicle. These loans are known as securitized notes, and the process to securitize them is often a mess. If your Ohio foreclosure attorney spots a securitization error, you may be able to stop your foreclosure.

In Ohio, every mortgage lender must file its foreclosure complaint in a court of law. This adds extra protection for homeowners, but it also creates a world of confusion for those unfamiliar with Ohio foreclosure laws.

With the aid of a foreclosure attorney, you’ll be able to start using these foreclosure laws to your advantage, and move one step closer to learning how to stop foreclosure in Ohio.

Tagged with: ,
Posted in Uncategorized

How to Save Your Home from Foreclosure in Ohio

If you’re an Ohio homeowner who recently received notice of a foreclosure summons from your mortgage lender, you may be wondering how in the world you’ll be able to save your home. But you should know that the fight has just begun.

Fighting your mortgage lender in court doesn’t provide a guarantee that you’ll be able to save your home from foreclosure, but it certainly gives you a good chance. To that end, here is how to save your home from foreclosure in Ohio:

  • Don’t miss the 28-day answer deadline. Within 28 days of receiving a court summons (this is the frightening document that says your mortgage lender has officially filed a foreclosure action), you MUST file some sort of answer in court. If you fail to meet this deadline, your lender could obtain a default judgment, which makes it much more difficult to save your home from foreclosure in Ohio. 
  • Contact an Ohio foreclosure attorney. If you’re serious about saving your home from foreclosure, you may need someone with real experience to guide you through the court process. Contact an Ohio foreclosure attorney and ask about their rates, experience, and typical foreclosure defense strategy. 
  • Save all documents you receive from your lender. In their haste to foreclose on homes, mortgage lenders often make a litany of mistakes that could jeopardize their ability to obtain a judgment. By saving everything you receive from your lender, you could preserve proof of any crucial missteps by your mortgage servicer. 
  • Buckle in for the long haul. In Ohio, the typical foreclosure case lasts longer than 360 days. And since most cases are uncontested, this figure probably skews higher for homeowners who choose to fight their foreclosure. On the bright side, this gives homeowners more time to stay in their homes and craft a viable foreclosure defense. But it also requires a great deal of patience. 

During the housing bubble that peaked in 2007, housing prices rose at such a consistent rate that banks started making as many home loans as possible. With the rush to extend millions of loan, banks often neglected to file the proper closing paperwork.

If you and your Ohio foreclosure defense attorney are able to discover fatal flaws in the initial mortgage documents, you may be able to save your home from foreclosure altogether.

Posted in Uncategorized

Dark Cloud in Sliver Lining of Declining Foreclosure Rate

            There is good news over the past few days that the number of foreclosures nationally have declined, but that does not provide much consolation to the thousands of homeowners who remain in the foreclosure process. Even more disturbing for homeowners who have been sued is the news from the Washington Post  that in at least two of the states where our affiliated firms represent homeowners, Ohio and Illinois that those facing foreclosure are deeply under water.

 

            Creating legal leverage to push servicers and investors to to rationalize predatory mortgage loans by reducing principal and interest is more important than ever for homeowners facing foreclosure.

 

            Servicers and Lenders are becoming bolder in try to foreclose on houses where they have a tenuous legal claim based on the failures in the origination, securitization and servicing processes.  This makes it even more critical to at least consult a lawyer before a court can issue a default judgment.  Too often clients come to us with a case that reveals significant legal issues that could be offered in defense of foreclosure, but after a court has issued a default judgment or summary judgment against them.  The barriers remain high to getting a court to look at those legal issues.

 

            At this stage in the foreclosure crisis it is more critical than every to consult with a lawyer experienced in defending foreclosures and suing banks and servicers than ever. The courts operate on strict timelines and a failure to answer could be the difference between keeping a house and losing it.

 

www.dannlaw.com

Tagged with: , ,
Posted in Uncategorized

4 Mistakes to Avoid When Considering Deed in Lieu of Foreclosure

If you’re the target of a home foreclosure action, and simply want to leave your home without the hassle of the foreclosure process, you may be considering a deed in lieu of foreclosure. This strategy is particularly enticing when the bank promises to leave you alone afterwards.

And while this tactic works for some homeowners, there are 4 key mistakes you want to avoid when considering a deed in lieu of foreclosure:

  1. Make sure the decision is mutual. Simply conveying the deed to your mortgage lender will not necessarily absolve you of your debt. In order for a deed in lieu of foreclosure to remove your obligation on the home loan, the lender must agree in writing to the transaction. To avoid future liability, make sure the release of your liability on the debt is an explicit part of the deed in lieu transaction. 
  2. Know the potential tax issues. Every conveyance of property, including a deed in lieu of foreclosure, will involve taxes. In Ohio, the taxes will vary by region, but they tend to be significant regardless of your location. If your lender is willing to pay these transaction taxes, that’s a plus, but if you’ll be on the hook for extra payments, a deed in lieu of foreclosure may be a mistake. 
  3. Consider your alternatives. A deed in lieu of foreclosure may sound enticing, but it will still show up on your credit report as a foreclosure, and it will likely kick you out of your home quicker than other alternatives. Other options include fighting the foreclosure, searching for flaws in the lender’s complaint, or agreeing to a short sale. 
  4. Protect your future. Make sure that the lender waives any claim to a deficiency judgment.

Accepting a deed in lieu of foreclosure without consulting an Ohio attorney may be a mistake. If you choose to fight the foreclosure in court, you may be able to stay in your home for a significantly longer period of time. During this time, you can save money for your next housing transition.

Alternatively, you could explore a short sale, in which you sell the home on behalf of your lender. With a short sale, you may be able to fetch a price that covers your debt entirely, which reduces the risk that your lender will pursue a deficiency judgment.

Posted in Uncategorized

Learn the Top Strategy to Stop Foreclosure in Ohio

There are many potential ways to stop foreclosure, and each case is quite different, depending on the unique nature of your mortgage and the actions of your bank. Nevertheless, there are a number of steps you can take to give yourself the best chance against your lender in a foreclosure action.

And the best foreclosure attorneys in Ohio typically follow a consistent course of action when taking on the nation’s biggest banks. Listed below are just a few of the many steps that may constitute the top strategy to stop foreclosure in Ohio:

  1. Go on the offensive. Since roughly 90 percent of Ohio homeowners don’t fight a home foreclosure action, mortgage lenders are accustomed to having a legal advantage against people who represent themselves. But with the aid of an Ohio foreclosure defense attorney, you can turn the tables on the bank, and force it to explain the legal sufficiency of its action. Banks aren’t used to having to fight, and an immediate attack often catches them by surprise. 
  2. Hunt for holes in the foreclosure complaint. Of course, if you’re going to go after your lender, you’ll need some ammunition. If you’re following the top strategy to stop foreclosure in Ohio, you and your attorney should first examine your lender’s complaint to foreclose the mortgage. Ohio law requires lenders to jump through several procedural hoops before they can foreclose. Banks, through both error and fraud, routinely miss several of these hoops. 
  3. Create a plan of attack. Some foreclosure attorneys may want to throw the kitchen sink at your lender in one fell swoop. This approach, however, is often counterproductive. To build the best strategy to stop your Ohio foreclosure, your attorney will want to create a specific timeline for attacking the underlying foreclosure complaint. 
  4. Don’t bow to pressure. During the foreclosure process, you may receive a flood of frightening letters: Notice letters, demands for payment, and collection warnings are just some of the intimidating notes that may appear in your mailbox. But don’t fret. Simply show these documents promptly to your Ohio foreclosure attorneys, and let them decide whether the letters are important, or simply hollow threats. 

In summary, developing a top strategy to fight foreclosure in Ohio requires a careful examination of your mortgage, promissory note, and initial foreclosure complaint, among other documents.

Posted in Uncategorized
Follow

Get every new post delivered to your Inbox.

Join 1,333 other followers