Three Tips for Stopping Foreclosure

If you’ve ever been served with a foreclosure notice, you’re familiar with that pit-of-the-stomach feeling that accompanies it. If you’re not already in the know, foreclosure is the legal process in which your lender repossesses your house because you’ve failed to keep up on your mortgage payments.

Many people think a foreclosure notice is the end of the road, and for good reason: not only will you be evicted from your home, but your credit will take pretty bad beating for years to come, too. But the good news is there are actually a couple ways to stop a foreclosure–here are three of our top picks.

  • File for Bankruptcy

You can stop a foreclosure sale immediately if you file for bankruptcy as late as the day before.  Filing for bankruptcy causes an “automatic stay” to go into effect at once. This stay prevents the bank from foreclosing the house and trying to collect the debt, essentially stopping the process in its tracks.

Of course, a bank will most likely file a motion against this stay so that they can proceed with the process. But even if this motion is granted, it’ll still buy you at least a month or two of time so that you can possibly explore other alternatives.

If you’re looking to keep your house, then you should file for Chapter 13 bankruptcy. If all you want to do is buy some time, though, then look into filing for Chapter 7 bankruptcy.

  • Apply for a Modification of Your Loan

Applying for a loan modification will permanently halt the foreclosure process. This is because your bank may be prohibited from loan tracking, or when the bank proceeds with a foreclosure even when a loss mitigation application is still pending.

There are a number of state and federal laws that prohibit dual tracking. For example, California, Colorado, Minnesota, and Nevada all have passed a Homeowner Bill of Rights that prevents the dual tracking of foreclosures. Banks usually must first approve or deny a loss mitigation application before moving forward with a foreclosure. Similarly, a federal law gives homeowners 37 days to file a loss mitigation application before a foreclosure or foreclosure sale proceeds.

  • File a Lawsuit

It’s possible to stop a foreclosure by filing a lawsuit against your bank. However, this only works if your bank is using a “nonjudicial process” to foreclose your house. This only works with nonjudicial processes, as judicial processes usually give you ample time to bring your case to court before the foreclosure actually goes through.

You’ll need to prove a few things to the court to win your case, though. For example, you could argue that the foreclosure shouldn’t proceed because the foreclosing bank:

  • Didn’t follow all the steps in the foreclosure process
  • Didn’t comply with state mediation requirements
  • Violated a state law
  • Can’t prove that it owns the promissory note

Contact Hedtke Law Group

At Hedtke Law Group, we take pride in fighting for what our clients deserve in court while offering them prudent legal counsel for every step of the way. To schedule your free consultation, call our Upland office at 909-579-2233, or Covina office at 626-521-5488, or our Moreno Valley office at 951-746-1722.