Foreclosure Defense: Understanding The Options Of Where To Go From Here
By Adam Gurney, Managing Partner
Most of us living in the United States have grown up with a vision of the “American Dream.” While this may look a bit different to many individuals, there tends to be one common element: Homeownership. We work for the majority of our adult lives to give ourselves or our families that dream home – whatever it may look like.
But life takes twists and turns we can’t necessarily plan for. Whether it’s a loss or change of job, childcare or medical expenses, divorce or simply a change in the marketplace, there’s a number of reasons one could fall behind on their mortgage payments. Once that happens, it can be difficult to get back ahead and can result in foreclosure.
It’s unfortunately not uncommon, but it is nerve-racking. As challenging as foreclosure can be, a game plan can help the process run as smoothly as possible, minimizing stress and saving valuable time.
While the ideal scenario would mean staying in your home, there are a number of additional options that can also help you come out of foreclosure with minimal damage.
Get the mortgage back on track
With foreclosure imminent, the simplest way to stop it in its tracks is to make the loan current by paying off any late payments. If the homeowner can manage to get it to that point, the foreclosure process stops and normal mortgage payments resume.
Up until the time the home goes up for sale or auction, most lenders would prefer to work out a compromise with the homeowner to get things back on track, rather than seize the home and carry out the foreclosure.
Obtain more time in the property
If foreclosure is definite, your attorney can help you stay in the property for an average of an additional one to two years while going through the foreclosure process. By working with the banks, requesting and filing the necessary paperwork as well as examining any potential issues with the loan, a homeowner under foreclosure can continue living in their home through the course of the foreclosure.
While this may not change the ultimate outcome, it can buy you some time as you figure out your next steps.
Negotiate a loan modification or updated agreement
If struggling to make mortgage payments, your attorney can assist you in working with your lender to potentially come to a concession on your contract. This can be done using a couple options – either a loan modification or a forbearance.
A loan modification is somewhat of a lifeline for homeowners and can take a number of different forms. For example, your attorney may be able to negotiate a lower interest rate or an extended length of the loan, effectively lowering the monthly payments.
Similarly, with a forbearance, the lender agrees to temporarily suspend your mortgage payments, adding on to the end of your agreement. Particularly in instances of an income change or other life event creating financial hardship, these options can give you the chance to get your finances back on track.
During these negotiations, it is imperative the homeowner can assure the lender that the home loan will be repaid. Your attorney can help you navigate these discussions to give you the best chance of ending the foreclosure and staying in your home.
If repaying your mortgage payments seems unfeasible, even with a loan modification, one final step could be a short sale of the property. Your lender must agree to this approach, and if they do, the proceeds of the sale go to the bank to satisfy your mortgage loan. While this scenario still ends with losing your home, in the end you will walk away without a foreclosure on your record.
No one sets out in homeownership with the intention to default in their loans, but certain life events can cause unexpected financial strain. The threat of foreclosure can seem like a worst-case outcome for certain, but that doesn’t have to be the case. Talk to a foreclosure defense attorney at Miles & Gurney, LLC to understand your options and determine the best approach. Call us at 312.929.0974 for a free consultation today and let’s start giving you the peace of mind that real options in the face of potential foreclosure are well within your grasp.
Adam Gurney focuses primarily on real estate and business law. In real estate, Mr. Gurney has experience representing buyers and sellers, lessors and lessees, in all phases of real estate transactions. He also handles disputes arising under landlord-tenant law, condominium law, foreclosures, and disputes involving the Illinois Mechanics Lien Act.
In business, Mr. Gurney provides counsel to start-up businesses in formation and transactions such as the formation of LLCs, LLPs, and S-Corporations, and the structuring of partnership agreements, employment agreements, and business contracts of all sorts. Mr. Gurney remains directly involved in every case that he handles, and his clients know that they can reach him directly - day or night - whenever they need to.