You can take steps to avoid foreclosure

January 25, 2011

Know how to fight the potential for foreclosure.

Q: Is there a way a homeowner who's facing foreclosure can find out whether his bank (or other mortgage holder) has taken all the legally required steps before taking back the property?

A: Foreclosure is a legal proceeding brought by a lender to take back your property. You have the right to fight the foreclosure and try to save your property and your financial interests.

Lenders must take specific steps in the appropriate order with accurate timing in order to foreclose on your property. You are not going to know the status of your foreclosure proceeding until you are notified. However, you must act quickly to assert your rights in a foreclosure proceeding once you are notified. At that point you have only 20 days to respond to the summons and complaint in most foreclosure cases. If you do not file an answer, a clerk's default and a default judgment may be entered against you.

More commonly, many lenders responded to the volume of homeowners who had fallen behind on their mortgage payments by allowing lower-level personnel to declare homes as being
in foreclosure.

Some mortgages are a product of predatory lending. If you are a victim of predatory lending, you may be able to assert affirmative claims for damages, even when your mortgage is in default. An attorney should be able to determine whether your lender used unfair or illegal tactics at the time of the mortgage agreement and can help you pursue your claim for damages.

Even if the lender does everything correctly, you still have options for delaying or preventing foreclosure. Depending on your situation and your objectives, you may be able to achieve a more favorable result through a deed in lieu of foreclosure, a short sale, a loan modification, or bankruptcy.

Richard J. St. John, president, St. John & Associates, Inc., Roswell, Georgia.

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