Is there life after foreclosure service??
Thousands of our friends and neighbors have gone to the front door at dawn to pick up the morning paper, only to be greeted by a process server handing them a foreclosure notice. These people have been compromised by the ongoing failure of our federal and state governments. How? These government entities have failed to partner up with financial institutions and resolve our national housing instability. Without this resolution, every well written summons and every complaint seeking the foreclosure of a mortgage loan will result in a forced, judicial sale of the house. So is there life after being served notice? There can be.
A mortgage plainly states that if you do not pay the monthly payment, keep the house insured and free of violations and a number of other conditions, you will be sued in State or Federal Court and eventually your house will be sold at a foreclosure sale. A homeowner will listen to this at the closing table while signing a thick stack of documents and concentrate on anything but these potential chaotic results.
How federal and state government has failed foreclosed homeowners
There is little doubt that the overwhelming number of mortgage loan defaults do not result in sustainable loan modifications. Over one year ago, a group of 15 Attorneys General, including our New York State Banking Superintendent, joined in a letter dated February 2, 2009 to the Comptroller of the Currency and the Director of Office of Thrift Supervision stating that "the majority of loan modifications in the past year have not led to meaningful payment relief to homeowners. We are concerned that either the institutions supervised by the OCC and OTS have thus far failed to offer homeowners sustainable loan modifications, in contravention to guidance issued by the federal banking agencies...."
Almost one year later, this State Foreclosure Prevention Working Group issued its Data Report No.4, January 2010, and published its findings that the number of homeowners in default continues to grow; loss mitigation efforts are backlogged; principal reductions are rare; and that our lenders and servicers have "not succeeded in turning the corner to reduce the high levels of foreclosure." Newsday, February 11. 2010, Ellen Yan details these striking considerations in her article that the "number of newly started foreclosure cases on Long Island went up last month." Notwithstanding, she writes of some positive trends that are now forthcoming and reports of a successful loan modification for a Nassau county homeowner, even after the lender started a foreclosure proceeding.
Ms Yan described this process in her earlier article that "state law will require settlement conferences for all borrowers in the foreclosure process". She reported that court officials are "hoping to keep these people, more of them, in their homes." Many people who have come face to face with the process server feel no need to reach out for guidance, counsel and assistance. Each foreclosure summons is required to provide phone numbers for counseling agencies and each court house provides a Clerk's Office for homeowners to enter and seek information.
Strategies for life after foreclosure service
Let me provide you with a few positive and success oriented strategies and posture that there is life after service of the foreclosure action. Our law firm has a significant focus on "life after service" and we regularly meet with homeowners who have been served with a foreclosure summons and need counsel and defense to the possible loss of their home. A meeting in our office often gives the security that they seek and enables the confidence that there is a process for solution. The guarantee is that if "you do nothing you will get nothing" so work with an attorney that will help you understand and search out for answers to avoid foreclosure.
The wonderful thing about meeting with us is that the potential to succeed is limitless. I realize that when you greet that process server who explains that he is only doing his job, you most certainly will feel the weight of the world crashing down. You must take action. Look to mentors, neighbors and professionals who have had experience in this area. The statistics are overwhelming--- one out of seven borrowers are behind on their mortgage, according to the Mortgage Bankers Association 3rd Quarter 2009 survey. This absolutely means that you are not alone.
But it also means that someone won't magically appear in your living room to describe what actions you need to consider. To succeed, it means that you must begin the process of rebuilding your financial confidence and recognize, once you begin to search for the solution, that you will be assured of meeting someone who has had a similar problem but has done something to motivate and initiate a process that will defend the foreclosure action, slow it down to the point of engaging your lender in Court at a foreclosure settlement hearing, submitting for a loan modification or if necessary, take all other appropriate actions in the legal process to protect against a foreclosure sale.
The past three years have seen enormous actions from our financial institutions to engage this revolutionary concept of modification rather than foreclosure. There are steps now in process to implement a Treasury Department plan to modify eligible borrowers who have a second mortgage lien. These concepts are bold and innovative and require much on the part of the lender, but also on the part of the homeowner. Remember, that there is life after service and you can head in the direction of a solution.
