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Getting served with foreclosure papers is probably the most traumatic thing that most
people will ever got through in their life. I've had clients describe it to me as being
hit in the chest with a baseball bat. They just feel like they're emotionally knocked
to the ground and they have visions of having to move out of their house in a few days.
If that's the situation you're in and you've been served with papers in a foreclosure action.
The first piece of advice I would give you is to take a deep breath and calm down.
Foreclosure litigation is lke any other litigation that goes through the court system. it's going
to take a while. I tell clients all the time, if you do absolutely nothing in response to
the foreclosure papers, it will still take probably at least four or five months to complete
the process before you would be moving.
So you don't need to rush down to U-haul to buy a bunch of moving boxes as soon as you
get served with foreclosure papers.
As crowded as the court dockets are today, it's not unusual to take two, three or five
months, 12, 18 or 24 months depending on what defenses can be raised.
One of the things that we can do when we approach a foreclosure defense case is first of all
is to look at the transaction, the original mortgage loan transaction. There's a lot of
federal requirements, a lot of technicalities that have to be met.
Most of you have probably read in the newspapers or seen on the news, stories about ways that
some of the mortgage lenders have tried to speed up the process by having people sign
papers that they don't even know what they're signing. All of these things can come together
to create a defense to a mortgage foreclosure case.
Although extremely rare, we have witin the last couple of years two or three cases where
we were able to come in and show that the mortgage was completely invalid, that there
was no lien on the property at all that could be legally enforced. Now as I said before
it is common for us to come in and find several mistakes, not so fundamental as to cause the
mortgage to be invalid but to certainly create problems for the mortgage lender. That opens
the door then for settlement, because a foreclosure action is just another lawsuit. Like any other
lawsuit, we're looking for ways to settle the lawsuit.
In a foreclosure action settling a lawsuit will typically mean working out some sort
of new arrangement or modification of the mortgage to take into consideration not only
the legal problems that we might find but the economic realities of today.
Because there's one thing we know for sure, while these banks have to file foreclosure
actions, when a loan goes into default, the reality is the last thing on earth they want
is anther vacant house in their inventory. So we have found that in using the same type
of negotiating techniques we use in other types of litigation coupled with a thorough
knowledge of the mortgage industry and what the banks are dealing with, that we can, in
many cases work out an effective relationship. Or new relationship going forward between
the lender and the homeowner such that they stay in the house and have a payment plan
that is affordable and they now have a house where there is not a tremendous amount between
what they owe and what the house is worth.