Category: Foreclosure Defense Attorney

How Can an Attorney Avoid Foreclosure by Working With Your Lender?

If you have received the 90-day pre-foreclosure notice or expecting it in your mail anytime soon, hiring a foreclosure defense attorney in the early stages can make a big difference. After carefully studying your case, the attorney will be able to present you with more options than in the later stages of the foreclosure process. Not only that, they may also be able to get you a great deal with the lender, allowing you to stay in your home while finding a way to adjust payments to make the situation favorable for both parties.

The following are a few ways in which your foreclosure defense attorney can work with your lender to avoid foreclosure:

1. Loan Modification

A loan modification is a process in which the lender and the borrower enter an agreement with adjusted terms of the loan. Your foreclosure defense attorney can help you with negotiating terms in order to get the best possible deal considering your financial situation. A loan can be modified in three different ways: your lender decreases the original interest rate; your lender extends the loan repayment period to reduce the amount to be paid per month; and your lender reduces the principle balance that is due on you. After you have reached an agreement, your attorney will review the documents with modified terms to ensure there are no illegal or hidden charges.

2. Forbearance

A forbearance agreement gives you a break from payments by suspending or reducing your payments for a short period. In exchange, you will have to make full payment when the agreement expires, along with an extra amount to compensate for the missed payments. Forbearance is the best option for people who have lost their job due to which they are unable to make payments. A forbearance agreement typically spans for three to six months, but can be extended depending on your specific situation.

3. Loss Mitigation Options

Another way to prevent foreclosure is to opt for a loss mitigation option. These are special programs that are a part of Fair Housing Administration loans and make you current with your payments. For example, you may be eligible for a “partial claim” that will bring the remaining amount into good standing. Your attorney will advise you on how to opt for loss mitigation options and ensure that you don’t end up in being in more trouble than you already are with the loan.

4. Foreclosure Mediation

Foreclosure mediation allows you work together with your lender to come up with an alternative to avoid foreclosure. Your attorney will negotiate on your behalf and make sure that the lender considers your situation when setting out new terms for the loan payment.

The thought of losing your home to foreclosure can be frightful, especially when you are alone in the fight. In order to increase your chances of saving your home from the clutches of your lender tenfold, the best way is to hire a foreclosure defense attorney. Contact Covert & Covert, LLP at (630) 717-2783 or online to schedule a free consultation to evaluate your legal options. We have offices in Schaumburg, Warrenville, and Naperville.

Home Loan Modification – Why You Need an Attorney

Loss of income, unemployment, divorce, medical emergency, etc. – these are just some of the reasons why Americans fail to keep up with their mortgage payments and end up defaulting. The worst part is once you start falling behind on your payments, it is very difficult to get back on track. Some people think that chapter 13 bankruptcy is the only option they have to protect themselves from losing their home to the lender, but there is another way.

Since foreclosing a property is a costly process for lenders, they are willing to work with homeowners to find ways to help them make their payments. One solution they offer is home loan modification, also known as mortgage modification. However, there are several potential pitfalls associated with this option, and it is advisable to have a foreclosure defense attorney by your side when considering home loan modification.

How Home Loan Modification Works

It refers to permanent restructuring of your home loan, in which the lender changes the terms of your mortgage to make it easier for you to make regular payments. The lender may agree to make any of the following changes to your mortgage plan:

  • Putting a cap on the monthly payment to a certain household income percentage
  • Waive off some of the principle balance or some penalties
  • Lengthen the term of the loan
  • Reduce or eliminate late fees
  • Reduce the interest rate
  • Mortgage forbearance program

If you want to apply for a home loan modification, you have to submit an application to the lender or mortgage servicer. You will have to attach certain documents with it such as bank statements and recent paystubs.

How a Home Loan Modification can help you

The foremost benefit of opting for home loan modification is that it saves your home from being foreclosed. It works in those situations as well where foreclosure is already scheduled. Moreover, a short sale doesn’t hurt your credit score as much as a foreclosure sale does. A home loan modification makes the mortgage affordable, as the modified payment plan is based on your current financial situation.

Do you need an Attorney for Mortgage Modification?

Here are a few good reasons why hiring an attorney for a home loan modification is a good idea:

  • They can help you get the best loan modification option from the lender with more flexible terms.
  • Some lenders trick homeowners into believing they will get mortgage modification so they stop fighting, but are foreclosed later on. The attorney can avoid this situation altogether.
  • Since there is a lot of paperwork involved in the loan modification process, the attorney can take care of this daunting task for you.
  • An experienced attorney will know how to prevent your loan modification application from being rejected.
  • Lenders are willing to negotiate and show more flexibility in modifying loans for homeowners with legal representation.

If you have received a notice for foreclosure, you need to act fast and talk to a foreclosure defense attorney to help you devise your way forward. Contact the Law Office of Brian Covert at (630) 717-2783 or online to schedule a free consultation. We have offices in several areas of Illinois, including Schaumburg, Warrenville, and Naperville.

Common Mistakes Homeowners Make During Foreclosure

For any homeowner, foreclosure can be a long and daunting process, accompanied by many other potential problems. When you continuously miss your mortgage payments, it leaves your lender with no choice but to foreclose your home. The good news is that there are several ways to protect your home. However, intimidation, anger, fear, and several other emotions lead people to making some mistakes that render foreclosure inevitable. Here are some common mistakes that you, as a homeowner, should avoid during foreclosure:

Avoiding the Lender

When facing a foreclosure, people make the mistake of avoiding calls and messages of their lender. It may be hard for you to rely on the person/entity that has put you in this situation in the first place, but your lender can help you ward off the foreclosure. You may think that they are after your home, but in reality, all they want is you to make the mortgage payments. If your home goes into foreclosure, they will incur a lot of costs in selling your property.

It is highly recommended that you remain in contact with your lender, and let them know your reasons for missing the payments. They may provide you with several options to avoid the foreclosure such as a loan modification, forbearance agreement, or delayed repayment plan.

Damaging or not Taking Care of your Property

Learning about foreclosure can spark anger and aggravation, which may cause people to start doing damage to their home. While it is understandable that you may get frustrated, tearing down walls, breaking the windows, stripping fixtures or pipes, etc., can get you in even more trouble than you already are. Your lender can file a report of vandalism against you, due to which you may have to pay them more money after the foreclosure.

Aside from this, many people also stop taking care of their home, which is a big mistake. When your property is in bad shape, it becomes difficult to attract buyers for a short sale or for the lender to sell your house. Just like damaging your property, the lender can hold you liable for expenses they incurred in making repairs.

Not Looking into Government-Initiated Programs

The Federal Housing Administration (FHA) has setup the FHA Secure Refinancing program for homeowners so that they can avoid foreclosure. It is designed to cater to the needs of homeowners who cannot afford to pay back their mortgage because they have opted for interest-only loans or due to an adjustable-rate mortgage reset. You can find more information about this program at the FHA’s official website.

Not Hiring a Foreclosure Defense Attorney

Most people think that hiring an attorney is just an additional cost, and they may as well use that money for taking care of other important matters. A foreclosure defense attorney is your best option to delay the process, negotiate the terms of your mortgage with your lender, and stop the foreclosure altogether. They also ensure that you don’t make any mistakes that can end you up with more legal problems.

If you want to find workable solutions that can save your home from going into foreclosure, it is imperative that you hire an experienced foreclosure defense attorney. Contact Covert & Covert, LLP at (630) 717-2783 or online to schedule a free consultation to evaluate your legal options. We have several local office including in Schaumburg, Warrenville, and Naperville.

The Foreclosure Defenses That Can Help Save Your Home

The declining economy and the never-ending debt cycle make it difficult for an average American homeowner to keep up with their mortgage and other loan payments. Due to financial hardships, homeowners are constantly worried about the possibility that their home will be foreclosed by banks. If you find yourself in such a situation, but want to fight back to stay in your home, you should turn to an experienced foreclosure defense attorney for help.

While the best course of action varies from case to case, some types of foreclosure defenses are similar and prove to be effective in many cases. The following are some common foreclosure defenses that can save you from giving up your home:

Failure to Follow State Procedures for Foreclosure

Sometimes, the foreclosing party, i.e. the bank or the lender, doesn’t properly follow the state specific foreclosure procedures. For example, the lender didn’t issue a public notice to notify all the parties involved in the proceedings. In such a case, your foreclosure defense attorney can help you challenge the foreclosure. If you win the case, the court will order the foreclosure party to perform the entire procedure again in order to enforce a foreclosure.

Unjust Lending Practices

You can file a claim against the foreclosing party if they have deceived you, failed to provide complete information, or acted unfairly in any way. Under the Truth In Lending Act (TILA), the lenders must disclose payment schedule, annual percentage rate, and other important information regarding the mortgage. If the lender fails to give out this information, the borrower can challenge the foreclosure.

Military Personnel on Active Duty

The Servicemembers Civil Relief Act (SCRA) provides servicemembers special protections against foreclosure. If your home is being foreclosed while you are on active duty, you can ask the court to provide a postponement of the proceeding in writing, which will be of nine months.

Mistakes/Errors in Mortgage Payments

The federal law requires mortgage loan servicers to apply charges and payments to a mortgage loan as per the 12 U.S. Code § 2605. If they fail to comply with this statute, you can file a claim to stop the foreclosure action. Moreover, if a homeowner can prove that the lender violated the rules associated with mortgage loan servicing, they can prevent the foreclosure by arguing the bank estopped from claiming a mortgage’ default payment.
The Lender cannot Prove the Mortgage’s Ownership

Only the owner of the mortgage – the direct owner or someone representing on owner’s behalf – can enforce a foreclosure action. If your mortgage has been sold or bought by several different banks, investors, and lenders, there is a good chance that the last holder of the mortgage cannot prove who it actually belongs to. The court requires the foreclosing party to produce complete documentation of the mortgage’s ownership, which in such a case becomes quite difficult.

If you have received a notice for foreclosure or feel that you are at a risk of losing your home, you should immediately consult your case with a competent foreclosure defense attorney. Contact the Law Office of Brian Covert at (630) 717-2783 or online to schedule a free consultation to evaluate your legal options. We have offices in Schaumburg, Warrenville, and Naperville.