Foreclosures usually start during challenging times for borrowers, when their jobs, businesses, finances, health, marital and/or family situations going through difficulty so that the critical payments for housing: the mortgage, real estate tax, homeowners association dues and/or homeowners insurance payment fall into arrears. Usually there is an attempt by the property owner to gain time, understanding and leeway with the situation. However, often the communication with lender, taxing authority, homeowners association and/or other lien holder is less than adequate and through misunderstanding, delay and/or confusion situations that could have been handled “fall over the ledge” and the lender takes steps to foreclosure. The process is not always clear or well documented, however, there are some initial steps that lenders are required to take that could help borrowers know where they stand. If s situation seems to be getting worse seek the counsel of an attorney immediately since not everything prior to a foreclosure starting is intuitive and many aspects of how lenders act can mislead a borrower rather than help resolve their problems.
If you are no more than one or two months in arrears every once in a while, chances are that nothing serious will happen. However, if the arrears persist or if they increase to three months of arrears, or more, your lender may not accept your payments unless you pay the full amount of arrears including late fees. You will first get late notice(s), followed by letters from your lender advising you of potential options such as a modification, short sale or deed-in-lieu of foreclosure.
Under a mortgage modification the lender would end the problem with arrears, that would otherwise cause a foreclosure, by adding the arrears to the principal, and would lower monthly payments by lowering interest and extending the loan term. To the extent that you have regular income you should consider negotiations with your lender. If you are unable to catch up with mortgage payments or to enter into a negotiated agreement with the lender, you will receive after several months a notice of default, which advises you that due to your arrears you are now in default but that you can still cure such default by paying the arrears and late fees.
If you continue to miss mortgage payments and cannot obtain a mortgage modification or other negotiated settlement with your lender, you will eventually be sent by your lender a letter giving you a 90 day notice of foreclosure. This letter indicates to you the amount in arrears and gives you another opportunity to resolve the situation. While a foreclosure proceeding often does not start within 90 days, it may start several months later. The amount of time the lender will wait before it actually starts foreclosure proceedings can vary greatly and other than the above notices the lender will not actually tell you the precise time it will start the proceedings. While modification or other negotiated solutions require the lender’s cooperation, another way of preventing a foreclosure proceeding from starting, which does not need the lender’s consent, is a Chapter 13 bankruptcy case, where one can catch up on their mortgage arrears over a five (5) year plan while resuming regular monthly mortgage payments.
a. What is the Default Notice? –
b. Contractually Driven- Contract specifies the amount and type of notice.
c. Need Detailed Proof – We need detailed proof that a notice of default was sent and that it complied with the 90 Day Notice required
a. What is the 90 Day Notice? Statute.
a. Words Needed
b. History – When passed? Narrow application at first. But then broadened to all residential mortgages; then to reverse mortgages.
c. Who it Applies To – individual, homeowner who resides in the house
d. Languages – x6 if a reason
e. Not Good If Made Payments – voided if made payments as a justification to start with S&Y
f. Not Good if Over 1 Year – If sent a year ago cant justify a f.action and need new notice
g. Proof that it was sent; actual proof; affidavits – needs to validate
h. Separate envelopes – Kessler
i. Can’t Have x2 Borrowers on Same Letter
Our office can maximize your chance of succeeding with such efforts to obtain a modification negotiated resolution, a real estate solution and/or in a bankruptcy case by representing you, as your attorneys, in such matters. Please call us at (631) 271-3737, or e-mail us at email@example.com for a free consultation to discuss such legal options in greater detail.