Do You Want Bogus Defenses Or Do You Want Real Defenses To Foreclosures In Alabama?

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You have come to this blog post because you are searching for ways to defend against a foreclosure in Alabama. First let me say if you are not willing to take action . . . to do something . . . then there is no defense that I know of that will help you save your home. Those who are looking for a magic bullet will not like this post and should move on.

But if you are still reading then this shows me that you are interested in taking serious action to defend yourself against the foreclosure that you are facing.

But here’s the catch – many of the defenses that people talk about are not real defenses . . . they don’t really help you the vast majority of the time. So let’s deal with these false defenses first, and then we’ll pick up with legitimate defenses.

What about bankruptcy?
Some think of this as a magic bullet. But let me tell you – its not . . . unless you think paying more than your mortgage payment is a magic bullet . . . and wrecking your credit is a magic bullet. Something like 95% of all people who start a chapter 13 – what bankruptcy lawyers use to “defend” against a foreclosure – fail. . . they can’t make the payments.

What does this mean? You not only have a bankruptcy on your credit report, but now the lender forecloses against you and you have that on your credit report also. You literally just paid an incredibly high price to buy yourself a few months but you still end up losing your home.

OK, but what about these companies that promise a “loan audit” or “Truth In Lending Act (TILA)” analysis?
These companies are notorious for promising to find errors in your loans and then they claim they will be able to intimidate your mortgage company into giving you a great deal out of fear of being sued.

Here’s the problem . . . the mortgage companies know these places are normally scams and they don’t live in fear of these audit companies. Normally all that happens is the audit company tells you to stop paying your house payment. You get further behind. And then as you face foreclosure, the audit place stops taking your calls. Instead of the paradise they promise (lower the amount owed and no foreclosure) – you find yourself out of the several thousand dollars “fee” and with a home being sold at foreclosure next week.

OK, but what about a HAMP modification?
This is the big dream of our government – that all of the servicers and alleged owners of our loans will gladly and voluntarily agree to help you out when you are in a bind on making your mortgage payments. Occasionally we have seen this work but it is rare. I encourage you to try it – because you “never know” – but don’t stop seeking other answers.

Here is my advice – keep a signed copy of everything . . . and I mean everything . . . that you send to the mortgage company. Carefully confirm everything – receipt of the modification package, when a decision will be made, that the foreclosure sale has been postponed (if they promise you this), etc. This is because the mortgage companies are infamous for throwing away your package so they can say you never sent it. They will keep you on hold for an hour at a time to discourage you from calling. You have to protect yourself by documenting all of this.

(This might surprise you) – what about making a deal with the mortgage company?
The mortgage companies hate seeing our name on lawsuits against them. We’ll talk more about this later but trust me when I say I have no love for the mortgage companies. So it might surprise you to find out that I think it is a good idea to talk to your mortgage company to see if you can work out a deal with them.

Often they will promise to work out a deal or promise that you do have a deal. That’s great! Either they will, amazingly, honor their promise – keep their word – or they won’t. If they do, fantastic. You have worked things out and you don’t have to worry about a foreclosure or lawsuit or bankruptcy (if you wanted to dive into that mess). But if the company promises you one thing – the foreclosure sale is canceled – and then does the opposite, you likely can sue the dishonest company….

Final option – suing the mortgage company that is breaking the law….
If you are dealing with a loan made in the last ten years, and if you are dealing with a national bank, then in my experience there will either be fundamental problems with the loan itself and/or with the way that the loan servicer (the company sending you bills, paying escrow, etc) has treated you. If that is correct, then an option to defend against foreclosure or to stop a foreclosure, or to use as a counterclaim in an ejectment action (ejectment is after foreclosure – the lender sues to “eject” or evict you) may be the best choice for you.

We don’t do “loan modifications” . . . but we do sue mortgage companies for wrongful conduct and usually they come to us and ask about settling a case while making modifications to the loan. Rather than some uncaring person in a cubicle who is miserable with his life trying to make you miserable also, we deal with companies who are paying 300-400 an hour to their lawyers and who have an interest in coming up with a fair and reasonable settlement to the case. When a company faces a jury trial, they usually get more serious about resolving a case.

Bottom line – which method is best for you?
You want to rearrange the deck chairs on the Titantic? Then choose bankruptcy. Maybe you’ll be the unusual case where it actually saves your home long term but for most people it does not.

You want to pay some out of state company a thousand bucks or two thousand bucks to give you a bogus “TILA analysis” that is worthless? All the while losing your home to foreclosure?

How about putting your hopes and dreams in a HAMP modification? I hope it works for you and recommend that you try it but I would not let that be my only efforts to save my family’s home.

Talk to your mortgage company about modifying the loan or entering a forebearance or doing something to get you back on track. If they say “No” then you haven’t lost anything. If they say “Yes” then either they will honor it (and obviously you must honor the agreement) or they will break it. Either way you will have stopped foreclosure or you will have a potential lawsuit for breaking the agreement and lying to you.

Finally, on suing – remember we sue when we have a legitimate basis to do so. When we do that, we can create an incentive on the part of the mortgage company to finally do the right thing . . . not out of any concern for you – they don’t care about you – but solely out of concern . . . for themselves. Any settlement will be purely and utterly selfish . . . on the part of the mortgage company.

That’s ok. We don’t care why they suddenly start treating you with respect and dignity . . . as long as they finally do treat you that way.

So, if you are facing foreclosure, carefully explore your options and make the best short and long term decision for you and your family when it comes to your home.

Best wishes . . .

John Watts
PS – If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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