When a foreclosure is filed against you, it is the beginning, not the end. Ohio is known as a "judicial foreclosure" state, meaning the mortgage holder must file and win a lawsuit before it can try to sell your home. Sadly, a majority of homeowners are unaware they have options that either permit them to stay in their home or to structure a purposeful departure from their current home to a new one, so they don't answer the foreclosure complaint and lose the lawsuit by default.
If a bank or mortgage servicer has filed foreclosure against you, you have the right to respond. Hiring a foreclosure defense attorney who will review your case can help you raise defenses to the foreclosure, or even counterclaims against the bank or mortgage servicer. Banks and mortgage servicers are regulated by both state and federal laws when it comes to foreclosures and you have the right to demand they follow the law during this process. We have seen banks and mortgage servicers violate the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), the Fair Debt Collection Practices Act (FDCPA), and even the Fair Credit Reporting Act (FCRA).
Many homeowners invested a lot of money into their homes. For average Americans, a home is the largest single investment or purchase they'll ever make. Thus, a good many choose to defend foreclosure lawsuits and try to save their homes. Some home retention options include:
- Loan Modification;
- Loan Refinancing;
- Loan Deferment or Forbearance;
- Loan Reinstatement; or
- Property Redemption.
However, some homeowners don't want to fight a foreclosure or their financial situation or health has changed so drastically they cannot afford the home where they reside. Their are often foreclosure alternatives available to homeowners who qualify:
- Short Sale. Sometimes, the bank will agree to take less than is owed on your note and mortgage if you agree to sell the property. The reason is that if the bank sells the property at a Sheriff's Sale (auction), the selling price beings at two-thirds of the appraised value. The only downside to this is it is often a long process compared to a traditional home sale, involves a lot of paperwork, and it's usually advisable to engage a realtor that has done short sales before to help you navigate the process.
- Deed-in-Lieu of Foreclosure. Many homeowners have heard of situations where a person was facing foreclosure and "just gave the house back to the bank." Deed-in-lieu of foreclosure is the formal process for that, wherein a homeowner agrees to transfer the deed to the property to the bank or mortgage servicer, and in return the bank or mortgage servicer will either forgo filing a foreclosure, or will dismiss an already-filed foreclosure. There are, however, certain requirements for this foreclosure alternative and not everyone may qualify.
- Agreed Judgments. An agreed judgment typically involves the homeowner agreeing the bank or mortgage servicer has the right to foreclose on the property. While this does result in homeowners vacating the property and having a foreclosure on their record, it does permit homeowners to negotiate when they vacate the property. Thus, this option can afford homeowners valuable time to obtain new housing and move their belongings on a schedule that works for them and their families.
Choosing a foreclosure alternative that does not permit you to retain your home may not be the option you initially desire, but it can provide relief from the stress of litigation, provide certainty regarding what the next steps will be, and provide peace of mind.
If you have an issue with foreclosure, or believe you will have an issue with foreclosure soon, let us to see if we can help.
9 East Kossuth Street
Columbus, OH 43206