There are several options to legally delay a foreclosure, but you must act with urgency in order to get the most from each of these maneuvers.
Last Minute Effort to Stop a Foreclosure
- Bankruptcy: Filing for bankruptcy will grant you a stay, which essentially freezes all bills due including your mortgage. This requires that you hire an attorney and can be costly, and is not always a long-term solution as advertised by many less-than-ethical attorneys. If bankruptcy does seem to be the right solution for you, and you are married with your spouse being co-owner of the property, consider filing bankruptcy individually with you first and your spouse later, stretching out the period of time that a stay is effective.
- Trustee Sale Delays: Trustee sale verification delays are essentially based on challenging the legality of a trustee sale (also known as a foreclosure sale or auction) by asking the trustee to verify any number of items that could reveal the failure to follow the letter of the law as it pertains to the foreclosure process in a non-judicial foreclosure state. After the challenge is submitted, the trustee will delay the sale as it verifies the claims and validates that it has complied with all necessary laws so that it doesn’t run the risk of having their trustee’s license revoked.
Solutions at the Start of the Foreclosure Process
You should contact your lender as soon as you realize that you will have challenges in paying your mortgage. A lender will be able to discuss all available options to prevent foreclosure and it will also relieve some of the pressure for them to aggressively push the foreclosure proceedings forward. Some of the tactics that can delay a foreclosure include:
- Pursue a Forbearance: A forbearance will allow you to postpone payments and catch up on back payments by paying down what’s owed over several months. This could give you time to attempt to sell your home or explore other options.
- Negotiate a Loan Modification: You may be able to convince the bank to modify the terms of your home loan if you can demonstrate that you have the ability to make a lower monthly payment. The bank can add your missed payments to your balance, lower your interest rate, extend the term (the amount of time given to repay the entire loan) of the loan, or possibly forgive a portion of the amount owed.
- Challenge the Lender in Court: California regulations governing foreclosures are very specific. If a bank or lender fails to follow these rules and the associated timelines, you should consult an attorney and file suit in court. Specifically, you should make sure that the lender provided the appropriate amount of notification (usually at least several weeks), and informed you of any right to redeem your property. Review the foreclosure laws in California to reveal any abuse by your lender.
Produce the Note: A tactic to discuss with your attorney if you are filing a suit against the lender for abusive practices is to demand that the bank produce the note proving they are the legal owner of your mortgage. Without a note, the legal document that certifies the legitimate owner of a debt, a bank is not legally authorized to initiate a foreclosure. During the real estate boom, it was common for mortgages to be sold multiple times over through a very sloppy process that allowed for a lot of paperwork to be lost. One statistic estimated that as many as 50% of foreclosed homes had missing notes. So chances are that if you request the court to force the bank to produce the note, they will not be able to comply and at the very minimum, while the bank hunts for the paperwork, will give you additional time in your home. The Consumer Warning Network has produced a “How-To” for this tactic.