One method to help keep a home is by answering a foreclosure complaint. If a person fails to file an answer the bank will foreclose within 3-6 months. A person will normally be evicted following a default judgment and foreclosure sale.
Filing an answer and discovery will often allow an individual to stay in the home for an extra 6 months to 2 years. Sometimes just filing the answer and discovery will delay the process even longer. Filing an answer to the complaint is almost always your best option. It gives you time to sell the home or complete a mortgage modification.
The Foreclosure Defense Option
Many homeowners are never told defending the foreclosure is an available option. Many people just give up and simply move out of their home. They start paying rent elsewhere as soon as they’re informed that a foreclosure is filed. By staying in the home and fighting back and defending the foreclosure it may save a person years of rental costs. Also if you leave the home someone else may move in or vandalize the property.
If you fail to file an answer to the foreclosure you may not receive notice of future proceedings or even be notified of the foreclosure sale. In extreme cases, debtors have come home to their possessions sitting on the sidewalk by failing to file an answer.
Counterclaims against the mortgage company
If counter-claims can be made, filing an answer to a foreclosure may allow the homeowner to stay in the home for a year or two. During this time you can sell the home or pursue other options. Filing claims back against the mortgage company gives you time to find another home. Fighting the bank will increase attorney fees and bank charges. It can also deduct from your equity. But if there is no equity in the property and you plan filing bankruptcy, fighting in court can be an effective method to stay in your home while you consider other options.
Hamp and many other programs such as the Mortgage Forgiveness Debt Relief Act ended on 12-30-2012. Other programs have replaced Hamp. If there was a deficiency it will be taken as 1099 income for the amount of the deficiency, if you do not file bankruptcy prior to the sale. This can create a situation where you have to pay taxes on a home that has been foreclosed. It is essential to file a bankruptcy before the sale to avoid any deficiency and tax problems. Click on the following link for a timeline of the foreclosure process, which has averaged 630 days nationally in 2012.
If you are facing foreclosure be sure to see us about your options.