The Top 5 Questions When Facing Foreclosure

By Dania Fernandez, Esq.
The Law Offices of Fernandez & Associates, P.A.

A key aspect to maintaining your house and avoiding foreclosure is to understand the foreclosure process. The last thing any homeowner wants is to lose their home to foreclosure. We are in a tough market and there have been reports and statistic around the United States showing increasing numbers of Foreclosure. Among the top foreclosure states are Nevada, California, Florida, Arizona, Ohio and Michigan.

By understanding the market and the foreclosure process you will be in a better position to solve your problems and avoid foreclosure of your property. Here are the top five questions and their answers that I am faced with daily.

1. Once I get the Complaint for Foreclosure what should I do?
In Florida, you will have 20 days to give a response to the Complaint for Foreclosure. It is very important that you read carefully the first page of the Complaint; it will provide the deadline for filing an answer. The answer to the Complaint must be in writing and must comply with the local court rules.
When you receive the complaint, you should consult with an attorney to properly respond to the Complaint of Foreclosure. Many of my clients come to my office with a recorded hardship letter as their answer to the Complaint. A recorded hardship letter is not an answer to the complaint. Each provision in the complaint should be answered with a Denial or Admit along with your defenses against the Foreclosure Complaint. An Attorney will know the law and will properly form the answer and all the defenses on your behalf.

2. I do not have any money right now what do I do?
First of all, analyze your employment options and start looking for a way to make money. You will have to show some kind of income in order to qualify for any kind of modification or refinance of your existing loan. The Lender will not agree to a work out plan if there is no income to justify your ability to pay the new loan terms.
Therefore, if you have already received court papers from the Lender, invest the little money you do have, in an attorney qualified to handle foreclosure defense cases. After analyzing your case, the attorney will be able to defend your case and may be able to negotiate a better agreement with the bank.
During this time, get organized, find a job, figure out what you are going to do with your life and go for it. You will not be making payments to the Lender while the defense of your case is taking place. Take that opportunity to budget yourself and figure out the next 6 to 12 months of your life. Put your mind into it, focus your energy and get it together.

3. Should I keep my home?
Many clients come to my law office and want for me to just tell them what to do. How easy it would be, if all we had to do was to go to the almighty get a clear yes or no and move on. This is not reality. It was meant for all of us to work through our problems, find solutions and learn from our mistakes. It is times like these that we should all learn from the lesson that are being presented to us. There are several questions like this one that I can only provide a guide and information sufficient enough for the homeowner to make an informed decision.
The following is a list of points to consider when forming your decision in addition to and together with the rest of this article and all the much needed information that can be found online, books, and other publications:
The market value of the property. Do you owe more than what it is worth?
What are the new modification terms the Lender is offering you?
Are they lowering the principal amount of the loan based on the market value of the property?
Are there other properties available similar to yours at a greatly reduced sales price?
Are there any loan programs you would be able to qualify for if you did decide to buy a new home?
Can a family member or other person help you get a loan as a co-signer/co-borrower?

4. Should I leave my home and rent another?
No. If you are in financial hardship and cannot afford the mortgage payments, association payment, taxes, etc., you do not have to leave your home, yet. It is not until there is a foreclosure sale date and the sale has occurred that you will need to leave your home. Hire an attorney to defend your case. You can stay in your home during the defense of your case. During this time you should be working at getting a loan modification with the Lender. This will take a few months.

5. Can anyone get a loan modification?
No. First of all, there must exist a hardship. A hardship can consist of a loss of income, health issue, divorce, etc. Second, there must be proof of income to substantiate the payment of the new modified loan amount. Third, the monthly expense should not be greater than the monthly income. There should be money left over after all monthly expenses are paid.
We are experiencing great results with loan modifications, more so than just one month ago. Some examples are 4%fixed for a term of 40 Years; 3% for 5 years and thereafter fixed at prime; decreases in interest rates from 8.5% to 6%, and more

These are just a few of the most commonly asked question and answers that I am faced with daily. For more information and more questions and answers go to www.daniafernandez.com and download the e-book Foreclosure and Bankruptcy Today: What everyone should know? Written by Dania Fernandez, Esq. and Emmanuel Perez, Esq. For a free initial consultation please call Dania Fernandez at 305-254-4492 or e-mail me at dania@fap-law.com.