Foreclosure Defense: An Overview

Most people do not possess enough money to buy a house with cash, thus they opt for a mortgage to purchase a house by making monthly payments over several years. However, over time, there can be a change in circumstances; excessive debt and financial difficulties may render them unable to make their monthly mortgage payments. In such cases, the lending financial institution may decide to initiate foreclosure to recover the balance.

Facts available on Federal Deposit Insurance Corporation’s website shows that 250,000 new families enter into foreclosure every quarter in the United States. The worst decision one can make under such circumstances is to delay the process by ignoring the foreclosure problem i.e. not taking any action. If you are facing foreclosure, you must take proactive steps to avoid foreclosure at any cost.

The first and foremost step should be to initiate negotiations with the lender to offer a lower interest rate, an extension of the loan, or temporary reduction in the monthly payment. If the negotiations do not succeed, your next step should be bringing an experienced foreclosure defense lawyer on board and prepare for a foreclosure battle in the court.

Foreclosure Defenses

There are different defenses available in case a threat of foreclosure is looming over your head. Your lawyer will try to find any mistakes that are made by the lender in the mortgage agreement or foreclosure processes such as calculation mistakes by the mortgage provider, improper notice of default, or failure to adhere to state-required procedures. Though most of the mistakes can be corrected and may not prevent foreclosure, it will buy you enough time to manage your finances and prepare a better defense.

Moreover, a proficient foreclosure defense lawyer is equipped with extensive knowledge related to foreclosure and astute negotiation skills, which will allow them to negotiate with the lender much more effectively during the settlement. Using their sharpened convincing skills, your attorney is likely to help you cut a deal to prevent foreclosure, possibly in the form of favorable mortgage terms that fit your budget.

A seasoned foreclosure defense lawyer may also employ several other techniques to keep your rights as a borrower protected and prevent foreclosure. For instance, they may try to prove that the terms of the mortgage agreement were unconscionable, thus the contract is not binding and consequently, not enforceable.

Some mortgage contracts and trust deeds also include a promissory note, which enables the lender to pursue their payment through your other financial assets. Your lawyer may seek short sale where the lender allows you to sell your home at a lower price than a mortgage or employ bankruptcy defense to ensure that your private assets remain protected.

There are several legal and technical complexities involved pertaining to the foreclosure process, which makes it extremely difficult for an individual to comprehend and come up with a sound strategy. However, a skillful attorney will guide you through the process and help you devise a comprehensive foreclosure defense to mitigate the situation and find an optimal solution.

If you wish to know more about this subject or speak with an experienced foreclosure defense lawyer, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.

Should I Hire A Real Estate Lawyer for a Short Sale?

A short sale is an arrangement where the proceeds obtained from selling the house are lesser than the amount owed to the mortgage lender. Short sales usually take place when a homeowner is delinquent on their mortgage payments and wants to avoid foreclosure against them. Sale proceeds, which are usually lower than the amount owed, go to the mortgage company and in return, the lender lifts their notice of deficiency, releasing homebuyer from any obligation.

If you find yourself in a difficult financial situation and are looking to initiate a short sale, it can be extremely advantageous for you to procure the services of a seasoned short sale lawyer. Here are 3 key reasons that you should opt for legal counsel rather than merely hiring services of a broker or going DIY.

Access to Legal Advice

Short sales can involve legal aspects and real estate issues, along with different legal documents that need careful consideration from a lawyer. Moreover, you may require legal advice on various questions that arise. Therefore, it can be extremely beneficial to acquire services of an experienced real estate lawyer to guide you throughout the process. Remember, brokers or any individual who does not have a practice license cannot provide a legal advice on any matter related to the short sale transaction.

Better Negotiation

In order to initiate a short sale, you will have to ask your lending institution to release their mortgage lien from the house for proceeds in the sale. Most lenders are looking to obtain full payment without incurring any losses. Hence, using their persuasive skills, a competent real estate lawyer can negotiate on your behalf and get a favorable deal by demonstrating that short sale can expedite the recovery process and can benefit both the parties involved in the transaction.

Waiver of Liability for Deficiency

In many instances, the financial institution asks for a promissory note which states that you will pay the part of the unpaid losses, especially if you have a decent revenue stream or other assets to your name. Having a real estate attorney on your side can provide you an upper hand while negotiating a waiver of the deficiency or at least settle for a lower payment as a lending institution will be aware that you will have a foreclosure defense at your disposal if they do not opt for a short sale.

If you wish to know more about this subject or speak with an experienced real estate attorney, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.

Do You Need a Lawyer to Construct a Foreclosure Defense?

Foreclosure is a common occurrence in the United States. A report from Attom Data Solutions revealed 362,275 foreclosure filings of U.S. properties in the first half of 2018. In an environment where homebuyers buy a house on mortgage at a much higher rate than its selling value, foreclosure can severely damage their financial position. Moreover, it can also negatively affect their credit ratings. But, what actually is a foreclosure? And do you need a lawyer to construct a defense? Let’s find out.

What Is a Foreclosure?

Foreclosure is a process that is used by financial institutions against homeowners who are not able to keep up with their mortgage payments. The primary goal of lenders, mostly financial institutions or banks, to initiate a foreclosure process is to recoup their losses by taking control of a mortgaged house and then selling it.

Do You Need a Foreclosure Defense Lawyer?

There are many defenses available against foreclosure, however, it is highly impractical for an individual to properly use them in their favor due to legal technicalities. Therefore, if you are facing a threat of a foreclosure, it can be extremely beneficial for your case to hire an experienced foreclosure defense lawyer. A skillful attorney can help you construct a strong foreclosure defense by using their knowledge and competence pertaining to law and regulations.

Some defenses your foreclosure defense lawyer can construct to favor your case may include unconscionable mortgage terms, which may show that your mortgage terms were unjust and one-sided. Moreover, your attorney can also defend your rights in case of an absence of notice of default, which may demonstrate that lender did not notify you about nonpayment (notice of default is imperative for initiating a foreclosure process).

Other defenses may include bankruptcy defense and perhaps failure to adhering state requirements of foreclosure procedures or mistakes in calculation provided by mortgage provider can be used by your lawyer to remedy the situation. By leveraging discrepancies and irregularities in foreclosure documentation presented by a lender, your lawyer can effectively provide you with an upper hand in foreclosure proceedings.

It is advisable to take a proactive approach and educate yourself in an earlier stage of your case about foreclosure processes and options. However, you should make sure that you hire an attorney with relevant experience and skills in constructing a compelling foreclosure defense. Furthermore, it can be advantageous for your case if your lawyer has experience in short sales, deed in lieu, and other real estate areas, as it will allow them to protect your interests more effectively.

If you wish to know more about this subject or speak with an experienced foreclosure defense lawyer, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.

Why is Short Sale a better option than foreclosure?

In the United States, 65% of homeowners own a mortgage (debt taken to purchase a real estate property) on their house. When a homeowner is under financial stress and unable to pay the mortgage payment of their house, they are presented with mainly two options: short sale and foreclosure. It is imperative to understand the main differences between both of these processes to make a wise decision.

A short sale is a procedure to sell your home when an owner owes a mortgage of a higher amount than the market value of the house. If banks agree to accept a lesser amount than the figure actually owed by the homeowner, then the homeowner liability towards the lender is settled. On the contrary, foreclosure is a legal process initiated by a lender when a homeowner is unable to make the mortgage payment for a significant time period.

Reasons to choose Short Sale over foreclosure

A short sale is considered a better option compared to foreclosure. Unlike a foreclosure, a short sale allows the home sale to be conducted in a respectful and dignified manner as you are in control of the sale instead of getting evicted from your property by the concerned authorities.

Moreover, a short sale has a far less negative impact on your credit rating when compared to foreclosure. As a matter of fact, people who choose short sale are eligible to purchase another house; however, they may face additional difficulty while securing a new mortgage. Whereas in case of a foreclosure, a person may have to wait 5 years to buy another house.

Furthermore, if you are looking to obtain a loan from a bank, you may not be obligated to report a short sale, but details pertaining to foreclosure must be disclosed in the submission form, which may increase likelihood of your loan application to be denied.

However, according to the law prevailing in Illinois, a homeowner can only opt for short sale option if the lender has agreed to this arrangement, otherwise, a borrower may involuntary have to go towards foreclosure. Thus, it can be highly beneficial to get help from a short sale lawyer to represent your case in front of a lender. A skillful attorney may be in a better position to convince your lender to agree to a short sale arrangement.

How can a short sale lawyer help you?

A short sale lawyer can play a significant role in convincing your lender. Vested by their experience, your advocate can build a compelling case in favor of short sale by demonstrating its potential benefits contrasted to foreclosure. For instance, a short sale will allow the lender to get back their money much sooner than foreclosure process. Your attorney will be able to articulate such benefits in a more persuasive way, which may increase the probability of your lender agreeing to a short sale arrangement. Furthermore, your short sale lawyer would also devise a foreclosure defense, which may incline your lender to choose a short sale arrangement as they may not want to engage in a time consuming and tedious litigious process.

If you want to learn more about this subject or speak with an experienced short sale lawyer, it can be helpful to contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a consultation session.

3 Most Common Issues Faced by People When Purchasing Real Estate Properties

Purchasing a house is not an easy feat and you may come across several issues in the process of finding your perfect home. It is imperative that you take measures to find a suitable house, which is financially viable and meets your requirements. There are several issues a person can face while buying a house. Here are 3 most common issues that people experience when looking to buy a house:

Mortgage

The most important thing when you are looking to buy a house is mortgage . You have to ensure that whichever house you choose gets approved by the bank. In some cases, the bank does not approve your application even though your credit rating is good and you have all the relevant documents. Banks perform a due diligence of your chosen house before finalizing the mortgage arrangement. They may not be satisfied with your potential house as the construction might be old or perhaps its condition is deteriorated, which will only leave you the choice to look for another house.

Property Titles

It is vital that there is no dispute over the property title of your potential home. A clear property is not only important to get a mortgage, but it will also play an important part when you will sell your house in future. Reselling a house with a property title that has disputes and legal backlogs can be extremely difficult. Therefore, it is always suggested that you must not include a house with an unclear property title in your portfolio to avoid potential future losses and legal trouble.

Location is in a high-risk area

Location of the house is perhaps the most crucial aspect that you must consider before purchasing a home. There are several elements that come into play when choosing a perfect location for your home. For instance, you must avoid a house with proximity to industries, chemical plants, or a dumping ground. Moreover, you may also give consideration that your house is not in the high-risk geographical area, which has a history of natural disasters like earthquakes, tornados, etc. It may seem like a long stretch; however, prevention is always better than cure.

Finally, you must also consider the potential of appreciation of the value of your house. You can always upgrade and improve your house in order to increase its value, but the prime appreciation heavily depends upon the neighborhood and location of your home.

If you wish to know more about this subject and speak with an experienced real estate lawyer, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.