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Foreclosure Defense

“… 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

I.  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 legal language, they don’t provide any context, and often do not even include a phone number to call to ask questions.  When they do, you get the run around. Frequently these notices are (1) never sent/received, (2) robo-signed, (3) not recorded, (4) do not comply with terms of deed of trust, and/or (5) without the lender making good faith effort to negotiate a remod with the borrower under the California Civil Code.

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

II.  Internet Misinformation & Fraud

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.  Loan Mod companies frequently make false statements playing on distressed homeowner's hopes in exchange for a quick buck.  If you're charged up front fees for a loan modification by a lawyer or realtor then immediately report that person to their corresponding regulatory agency.

Even the banks themselves have been sued by the Federal government and censured by the California Attorney General's office for their failure to follow Federal and California law regarding foreclosures.

Be cautious of offers that seem too good to be true and fast talkers.  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 larger and more reputable litigation firms are taking on these cases now with no real idea how to handle them.

III.  Who We Are?

We advocate for consumers.  We are licensed real estate and bankruptcy attorneys in San Diego, CA and primarily focus on bankruptcy, foreclosures, and evictions. This e-mail address is being protected from spambots. You need JavaScript enabled to view it (619) 794 0460 

IV.  Foreclosure Sale Process - General Overview

NONE OF THE FORGOING IS INTENDED AS LEGAL ADVICE.  WE ARE NOT YOUR ATTORNEY UNLESS YOU RETAIN US

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

In many cases, the bank ("lender") 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 County Recorder's Office where the property is located.

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 if the borrower falls behind in their mortgage payments.

The foreclosure sale is conducted by the trustee, and the beneficiary under the deed of trust receives your home if no one pays cash for it at auction.

All the lender has to do to foreclose on the delinquent borrower is follow California law (CC 2924 et seq.) which details how to notice 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 among other requirements.  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.

V.  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. 

Ask yourself, have you just missed your first payment, or have you failed to make monthly payments for some time, 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 imperative to know where you are in the process in order to make an educated decision about setting up a timetable and handling the foreclosure process.

Wherever you are in the foreclosure process will effect your available remedies and legal strategy. 

VI.  Contacting Your Lender for Assistance

Contact your lender regarding a loan remodification and requesting an accounting of your mortgage in writing.  In some cases, the banks cannot even produce an accounting or explain the charges in the accounting produced.  Stay on top of your application and keep document proof of everything you do.  You may need it later

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 government 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. or nationalmortgagesettlement.com or your banks website for more info.

VII.  Getting a Loan Mod

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 in the first place.  In either event, it is important to try.

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 the bank 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.

Generally speaking, the Banks want to see an income to mortgage payment ratio of 31% or better so submit what you need to prove your income meets the requirements (if applicable).

VIII.  Remod Approval, Trial Payments, Stop Payments

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 the bank 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.

Many people wind up in foreclosure after being advised by the bank to stop making payments before denying the remod request.

Do not take a customer service rep's "word" and always get it in writing.

IX.  Need Help with Your Remod

We are legally and ethically prevented from charging up front fees to assist you with your remod, but we can help advise you within the scope of another related service.  The remodification process is similar to the bankruptcy filing process and we may be able to assist you for little or no money down.  This e-mail address is being protected from spambots. You need JavaScript enabled to view it , 619 794 0460.

X.  The Bank Denied my Remod and I Still Can't Pay My Mortgage.  Now what?

Apply again.  Never give up.

The foregoing is neither intended as an exhaustive list nor as legal advice; but rather, as a general overview of common resolutions available and alternatives to 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 especially if you have a 2nd mortgage as well.  If you would like to speak with a realtor then please contact us for a referral (619) 794 0460

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.

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 depending on the strength of your facts.  Contact Us (619) 794 0460

“Produce the Note” Action

Many people have heard about the “original title theory” or “produce the note” actions and for the most part, they are red-herrings.

 

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 ‘pro-lender.’

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.

Deed in Lieu

This just means that you deed the property back to the bank in lieu of them taking the deed via foreclosure sale and is a little better for your credit than foreclosure.

XI.  Post Foreclosure

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.  This e-mail address is being protected from spambots. You need JavaScript enabled to view it , 619 794 0460

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 and other available post foreclosure eviction defenses.  This e-mail address is being protected from spambots. You need JavaScript enabled to view it , 619 794 0460

Conclusion

No matter where you are in the process and what foreclosure defense path you wish to choose then we may be able to help you save your home, recoup damages, or legally get you more time at the property.

Call us now to discuss your case strategy.  Maximize your benefits.  Do not wait until you are too far gone in the process. (619) 794 0460.