“… banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered.”  - Thomas Jefferson 1802

Where Do I Even start?

Most people we counsel facing foreclosure do not even know where to begin. The foreclosure notices themselves are written in confusing legalize, they don’t provide any context, and often do not even include a phone number to call to ask questions. This is further assuming that the notices were even mailed to the person facing foreclosure in the first place.  Frequently they are not.

All the confusion can leave distressed homeowners feeling dumbfounded – not knowing what to do, where to turn, or who to trust?

Internet Misinformation & Fraud

To make matters worse there is a great deal of "internet mis-information" and fraud out there.  If you are looking for information on the internet about foreclosures then be careful.  Several loan modification companies have sprouted up in recent months and may charge absurd fees to do what you can do for free, or nothing at all.

Even the banks themselves have been censured by the California Attorney General's office for their failure to follow California law regarding foreclosures.  Be cautious of offers that seem too good to be true and fast talk.  Do not be afraid to ask about the professionals experience dealing with distressed properties and foreclosures, whether they are insured, or have been disciplined before.  This has become a popular area of the law and even some of the big litigation firms are taking on these cases now with no idea how to handle them.

Who We Are?

We are a San Diego based small firm focusing on bankruptcy, foreclosures, and evictions.  The foregoing is a general overview of legal options that many people facing foreclosure are currently dealing with in California and may or may not apply to the specific facts of your case. None of the foregoing is intended as legal advice, which is tailored to the client's specific factual circumstances, but rather as general information only for individuals who are behind on their mortgage and potentially facing foreclosure.

Foreclosure Sale Process - General Overview

The first thing that someone facing foreclosure may need to understand is the general foreclosure sale process.

In many cases, the lender ("bank") is alleging that the homeowner ("borrower") is delinquent under their obligation to make monthly mortgage payments pursuant to the promissory note and deed of trust secured by the property.  These documents are generally signed by borrowers and the lender's representative at closing of escrow and are then recorded at the San Diego County's Recorder's Office.

The lender generally has an 'acceleration' as well as a 'power of sale' clause within the deed of trust which allows them to demand the total amount owed under the mortgage contract.  All the lender has to do is follow California law regarding noticing the borrower of their intent to proceed under the 'power of sale' clause and make a good faith attempt at contacting the borrower regarding a remodification assuming it's an owner occupied residence.  However, lenders make mistakes in many cases.

The lender triggers the foreclosure sale process by properly serving the borrower with the notice of default and recording it at the county clerk's office.  Then they wait for the statutory time period to lapse in order to notice and conduct the trustee sale itself.  Finally, the property goes up for cash-auction on the courthouse steps pursuant to the notice served, and just reverts back to the lender in the vast majority of cases.

It sounds simple enough but lenders often fail to follow the law in this regard.  There is also California State law and federal loan modification programs available that can further assist distressed homeowners.

Where Am I in the Process?

The first thing many homeowners need to do is discover where they are in the process in order to plan ahead.

Many distressed homeowners simply ignore the problem and unwittingly allow it to get worse by failing to take any action at all.  Based on information and belief, the banks know this and count on consumers doing nothing in the majority of cases.  Please consider: have you just missed your first payment, or already received a notice of default, has a trustee sale been scheduled, are you now being evicted after a foreclosure sale, or are you somewhere in between?  It is important to know where you are in the process in order to make an educated decision about how you want to handle what's coming.

Wherever you are in the foreclosure process will effect your available remedies and legal strategy.  The foregoing is in chronological order and is not intended as legal advice, which is tailored to the client's specific factual circumstances, but rather as general information only for individuals facing foreclosure.

In the Beginning: Contacting Your Lender for Assistance

If you are early in the process, or haven't already, then you may want to contact your lender regarding a remodification and requesting an accounting of your mortgage.  In some cases, the banks cannot even produce an accounting or explain the charges in the accounting produced.

Please remember that you may be dealing with a multi-state national bank that has tens of thousands of distressed properties on its books, multiple offices handling different parts of the same claim that may not talk to each other, and can afford to be inefficient because of the gov't bailouts – do not expect them to do a good job managing your file.

You may wish to call the bank at the phone number provided in the mailings that they are legally required to send you regarding a loan remodification for information, or you may visit http://www.makinghomeaffordable.gov/pages/default.aspx.

The bank never sent me any information about a remod?

If your bank is failing to send you important legally required documents then we'd advise you to contact counsel immediately and seek legal advice.

What can I expect?

In most cases, whether you'll actually get a loan re-modification approved, may depend on your ability to demonstrate that you can make monthly mortgage payments at a reasonably reduced level in light of your income.  This doesn't help most people who are facing foreclosure because of a decrease in income and property values, but

Always make note the name of the person that you spoke with, the date/time, and their extension every time you call and speak with the same representative each time if possible.  Confirm that they also noted your account as well before you get off the phone.

Request an account statement. Let them know that you have income (if applicable), that it's your family home (if applicable), and are seeking a loan remodification because you can't handle your current payment (if that's the case).

Ask questions about charges that you do not understand.  Always be sure to get them the information they’re looking for from you promptly and save written proof that you sent it every time.  Be prepared for them to treat you like a number even though you are trying to pay them your money.

In the middle: Remodification Period

If you get a remod approved, or are advised to make payments (in full or in part) pending your re-mod, or cease making payments for a period of time in order to qualify, then be sure to be crystal clear about what you are sending them money for and get written confirmation of the agreement before sending/stopping payments.

Many people think that they are in a remod only to find out that the bank has been accepting partial payments on the delinquent balance in a suspend account, and in order to keep them from immediately recording the Notice of Default while the remod application was never even considered, or rejected.

In the Middle: Federal Government Options

There are a lot of companies providing assistance and there is a ton of fraud out there.  Be careful.

The Government's official website is a great place to start.  Visit the government’s website here http://www.makinghomeaffordable.gov/

The HAMP program discussed in the video above is not the only option out there but is the most widely used and federally funded.  Call them 1-888-995-4673 or you can sign up for a local counselor here: http://www.hud.gov/offices/hsg/sfh/hcc/fc/

Generally speaking, you may not need to hire an attorney or other professional to do this for you if you can competently do it yourself.  If you have questions then Contact Us (619) 794 0460.

Many firms advertise on the radio about these services and charge several thousand dollars to do what you could yourself, by contacting the bank, or thoroughly researching the above.  That said, none of this is intended as legal advice, but rather a general review of the legal principles that apply and in light of large amount of fraud in the industry.

You may need to hire an attorney, or other professional to complete the process for you at some point and do not rely on anything stated herein as legal advice.

Near the Finish: Available Options

If you cannot save your home through a remodification or gov’t assistance you may be wondering what, if any, options you have left?

The foregoing is neither intended as an exhaustive list nor as legal advice; but rather, as a general overview of common resolutions available near the end of the overall California Non Judicial California Foreclosure Process

Short Sale

Some people do not want a foreclosure on their records and try to do a short sale.  A short sale means that the bank agrees to take less money for the house then you owe on it but will release the note against you (i.e. you do not owe them the difference if what they sell the house for is less than what you owed on it).

This is often good for distressed homeowners looking to preserve their credit scores.  The problem is that many banks will not agree to a short sale and will simply move forward with the foreclosure.  It doesn’t hurt to find out if they’re open to it.  If you would like to speak with a realtor then please contact us for a referral.

Injunctions & Stays of Foreclosure without Bankruptcy

In some cases, the foreclosure process is so mismanaged by the bank that the Superior Court will order the foreclosure sale stopped.  Even though California is a non judicial foreclosure state, the lenders must follow the process outlined by the California legislature.  The most common violations are of Civil Code 2923.5 and 2924(g).

Some banks failures under 2923.5 were so bad that it prompted former Attorney General Jerry Brown to contact them demanding compliance.  To which CHASE, Bank of America, and GMAC banks announced temporary foreclosure moratoriums in California in 2010.  It is unclear how long the moratorium will remain in place or how Jerry Brown’s election to governor may influence more helpful litigation in the future for distressed homeowners.

If the bank has violated California law in any of the above capacities, or in any other respect whatsoever, then you may wish to sue them for an injunction to stop the foreclosure sale pending the Court’s determination of your case-in-chief.

To that end, we cannot guarantee that just because we have received this remedy for client's in the past that it in any way indicates that we will succeed in your case in the future.  Your case will depend largely upon your specific facts and circumstances which may be more or less favorable.  Contact Us (619) 794 0460

“Produce the Note” Action

Many people have heard about the “original title theory” or “produce the note” actions.

CNN news story about these cases

There is a great deal of inconsistency in the application of the law behind the theory.  Some courts note that there is a standing problem and enjoin the banks while others won’t even entertain a reasonable argument to that effect.  The general rule of law seems to appear to be a ‘pro-lender.’  This is inconsistent in our opinion and should be addressed by the courts.  Borrowers are required to adhere to the strict letter of the law while the banks apparently do not have to even demonstrate legal standing.  If you would be interested in advocating this position in California court then contact us.

Bankruptcy

You may wish to file bankruptcy in order to stop the trustee sale, or prior to an unlawful detainer trial please see our Chapter 7 or Chapter 13 bankruptcy resources, or Landlord Tenant Law as well.

In the End: Remaining options

Civil Action to Set Aside Sale & Monetary Damages

If the sale has already occurred then you may sue to set aside the trustee sale and sue for money damages.  Generally speaking you will need a legal reason to "invalidate" the foreclosure sale.  Many exist.   Please call now for your free initial consult.

Unlawful Detainer Court

If you have been foreclosed on and are facing an eviction then please contact us regarding Obama's Tenant's in Protection of Foreclosure Act.

Conclusion

No matter where you are in the process and what foreclosure defense path you wish to choose (HAMP, short sale, bankruptcy, pre-foreclosure injunction, post-foreclosure litigation, unlawful detainer court, or a combination thereof) understand that in many cases:

(1) you must have a legitimate and legal reason for not paying your mortgage in full which resulted in the foreclosure, and (2) you may have to pay to stay in your home at some point.

There are a variety of legitimate and legal reasons which may temporarily excuse payment, or at least stop a foreclosure for eligible borrowers and we've successfully worked with several San Diegans in the past in these cases.

You may face an enormous hurdle convincing a judge why your mortgage payment to the bank should be excused, the foreclosure sale enjoined, and the “acceleration” and “foreclosure provision” clauses in your Deed of Trust should not apply to your case, but that doesn't mean you should not inform yourself of the facts and law in order to make the best decision possible.

The ability to stop your foreclosure, or legally stall it as long as possible while you get back on your feet,  will largely depend on the strength of your overall facts and many distressed homeowners may need to employ a combination of the available legal resources in order to save their homes.

Call us now to discuss your case strategy (619) 794 0460.