Avoiding Foreclosure
By Kurt O'Keefe, Attorney at Law on Oct 17, 2007 in Chapter 13 Bankruptcy, Michigan
Chapter 13 bankruptcy attorneys hear it all the time.
Desperate people call days before the foreclosure sale, saying they just found out the mortgage company was going ahead with the sale, thought they had been talking about a forbearance agreement, working out a way to make up missed payments.
A big part of the reason loan modifications are hard to come by is the convoluted mortgage market, explained by John Rao in the Credit Slips blog entry linked above.
I have seen a mortgage company outsource their loss mitigation, so another mortgage company was handling it. That was messed up in that they proceeded with foreclosure on the one hand, while the other company made a deal with the woman who owned the house.
She lost her house at the sale.
It does not make sense. The mortgage company pays a lawyer and the costs of foreclosing with the left hand, while negotiating a loan modification with the right hand.
I see no profit to them in this process.
It could be that some of the pooling and servicing agreements, or applicable FNMA or other Federal regulations, require some sort of loss mitigation effort by them before they can foreclose, but that is just a guess.
My clients never have these other agreements or regulations, and it takes time to find out which, if any, are applicable.
If you want to keep your house, consult an experienced bankruptcy attorney before, or when, you get a foreclosure sale notice.
You cannot rely on the verbal representations of someone connected to the mortgage company, that, something will be worked out, other people in your circumstances have made deals, ya da ya da ya da.
It is your house, you have to take action.
The mortgage company people you talk to work for the other side. You need someone on your side.
If you liked that post, then try these...
Why I Hate Pre-Bankruptcy Credit Counseling by Brett Weiss, Maryland Bankruptcy Attorney
Bankruptcy Related Organizations Part 1 – NACTT by Peter Orville, Attorney at Law
How Do I Calculate My Household Size When I File Bankruptcy? by Peter Orville, Attorney at Law
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