In Louisville Kentucky, the foreclosure process can move very quickly without an effective foreclosure defense. Some properties are sold within 90 days. The bank has an attorney often being paid hundreds of dollars an hour which is being added to your mortgage balance. That attorney often has years of legal training and experience you don’t have. The banks attorney gives advise to the bank. He is not your friend. The bank is looking to maximize the profit from the mortgage or foreclosure. You should also take a moment to make a financial decision and ask your self “Is it more profitable to keep the home… or to let it go back”.
If the home sells in foreclosure, FHA VA and other programs will prevent you from having another mortgage for 3-7 years. You aren’t defenseless. You have legal defenses you can take to slow the process. Slowing the process can give you more time to find other solutions. But you have to make the right decisions early or you lose these rights and agree to the sale. We help by sitting down with you and finding a strategy. If you want to save the home you can catch up the mortgage in a Chapter 13. But if you wait, the foreclosure expenses mount up and may cut you off from the ability to save the home permanently. By failing to take some defenses or actions you waive your rights to them permanently.
It’s our job to point out the mistakes the lender made during the foreclosure process. There are procedures the lender has to go through closing the loan, processing the mortgage, filing the mortgage, in the pre foreclosure process and during the foreclosure.
- Mortgage servicers and holders must give you a fair chance to correct the loan default
- Mortgage servicers and holders must prosecute the foreclosure in the name of the real lender or holder
- Mortgage servicers and holders must introduce the original documents in the foreclosure proceedings
- Mortgage servicers and holders must bring the foreclosure proceeding in the name of the real mortgage holder
There are many, many different defenses that may be available. You have a right to insist that the lender properly present the evidence in court and follow the proper foreclosure procedures. The will normally slow down proceedings or the mortgage lender may even be forced to dismiss their case and start completely over. The additional time may allow you to, or at least become compliant before the foreclosure can continue. This time may allow you the time to find another home, obtain a mortgage modification, forbearance, or sell the property. In may be necessary to file a bankruptcy to avoid the tax liability, deficiency judgment and filing a bankruptcy will also delay the foreclosure.
A Chapter 7 or 13 Bankruptcy stay stops Foreclosures
At the start of a Chapter 7 or Chapter 13 a temporary court order called a stay goes into effect that prevents collections and seizure of your property. If you properly complete the bankruptcy normally you get a permanent court order at the end which permanently protects you. This filing stops the sale unless you made a mistake in a prior bankruptcy. You have to file correctly and if you do then you may even be able to file a second or a third time and have the benefit of the stay. Every answer, discovery or bankruptcy that is filed normally delays the foreclosure 6 months.
The lifecycle of the foreclosure process is normally:
- Bank files a Foreclosure complaint and within 20 days the Debtor files an answer. Just filing the answer will normally mean that the foreclosure should take about 6 months. A proper answer will require the Lender to respond to the defenses in your answer.
- Within 30-45 days after the Debtor files answer the homeowner should file discovery. By filing a proper discovery the lender will normally be forced to take time to respond to the requests. This will normally add about 6 more months to the process.
- Prior to the sale if a Defendant homeowner files a bankruptcy the process will take an additional 6 months. If a couple owns the home a bankruptcy may be filed in the husbands name and a second bankruptcy can be filed in the wife’s name later when the home again comes up for sale.
The Mortgage company can ask that the stay be set aside but even obtaining that permission will take over 30 days and often the lender will wait until after the Chapter 7 bankruptcy has been discharged and has ended.
A Chapter 13 allows you to catch up the mortgage and permanently save the home. You can take up to 5 years to catch the mortgage up but the earlier you choose this option the cheaper it is and more likely it is that it can save the home. Most people plan a creative combination of these. The earlier you start with me, the more I will be able to help. Call me for a free consultation at 502-625-0905.